Regulation of Financial Institutions eJournal最新文献

{"title":"Technology Adoption and Leapfrogging: Racing for Mobile Payments","authors":"Pengfei Han, Zhu Wang","doi":"10.2139/ssrn.3818168","DOIUrl":"https://doi.org/10.2139/ssrn.3818168","url":null,"abstract":"Paying with a mobile phone is a cutting-edge innovation transforming the global payments industry. However, some advanced economies like the U.S. are lagging behind in mobile payment adoption. We construct a dynamic model with sequential payment innovations to explain this puzzle, which uncovers how advanced economies’ past success in adopting card-payment technology holds them back in the mobile-payment race. Our calibrated model matches the cross-country adoption patterns of card and mobile payments and also explains why advanced and developing countries favor different mobile payment solutions. Based on the model, we conduct several quantitative exercises for welfare and policy analyses.","PeriodicalId":20999,"journal":{"name":"Regulation of Financial Institutions eJournal","volume":"4 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72691268","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Examining the Power of Commission Chairs through the Financial Regulatory Agencies","authors":"Todd Phillips","doi":"10.2139/SSRN.3794911","DOIUrl":"https://doi.org/10.2139/SSRN.3794911","url":null,"abstract":"Though Congress originally intended for multimember, independent regulatory agencies (“commissions”) to be bodies of equals, it has inadvertently strengthened the authority of commission chairs to such an extent that a majority of members cannot enact their preferred policies if the chair does not agree. Commission chairs’ authority to direct staff was originally granted to improve agencies’ efficiencies while still permitting a majority of commissioners to govern, but has instead resulted in a weakening of associate members such that they cannot effectively “check” the chair’s actions. For example, if a commission’s majority wants to enact a policy but the chair does not direct staff to draft a regulation, the majority largely has no recourse and the policy will not be enacted.<br><br>This essay discusses how the laws controlling commission governance have affected the interactions between chairs and associate commissioners. It also examines the specific statutes and regulations governing five commissions that regulate banking and financial services to understand the particular provisions that give the financial regulatory commission chairs power, as well as those provisions that (to some extent) allow associate commissioners to check the chairs’ powers, focusing on four areas: the powers of chairs, agenda-setting authority and quorums, rights of individual associate members, and prohibitions on delegating authority. Finally, it offers several changes that, if made by Congress or the agencies themselves, could give associate members more control and supervisory authority over the agencies, returning chairs to their original role as an official who simply keeps the agency operating efficiently.<br>","PeriodicalId":20999,"journal":{"name":"Regulation of Financial Institutions eJournal","volume":"25 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76080791","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Rules vs. Discretion in Market Surveillance of `Overvalued' stocks: Evidence From India","authors":"Nidhi Aggarwal, Surbhi Bhatia, Bhargavi Zaveri","doi":"10.2139/ssrn.3691093","DOIUrl":"https://doi.org/10.2139/ssrn.3691093","url":null,"abstract":"The recent episode of unusually high trading activity in stocks with weak fundamentals, such as those of GameStop Corp and AMC Entertainment, has re-focused the spotlight on stocks whose returns are not commensurate with the financial health of the firm. Regulators and stock exchanges have experimented with various surveillance tools to identify such stocks and alert investors of the risks of trading in them. In 2017, the Indian stock exchanges, in collaboration with the securities market regulator, enacted a new surveillance measure designed to identify `overvalued' stocks on the basis of a pre-specified criteria. Such stocks are then subjected to trading restrictions of varying intensity. Using a hand compiled data-set of all the securities that were placed under this surveillance action, we examine the manner of implementation of the mechanism, and its impact on the returns and liquidity of the stocks. We find that nearly a third of such securities did not satisfy the pre-specified criteria. There is considerable ambiguity in the implementation of the measure which raises critical questions about its effectiveness. Using a matched sample approach and difference-in-differences framework, we find that securities subjected to the surveillance measure, experience a decline in stock prices and liquidity. The paper contributes to a growing line of literature on the discretion applied by exchanges in surveillance practices and the quality of enforcement of rules.<br>","PeriodicalId":20999,"journal":{"name":"Regulation of Financial Institutions eJournal","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-02-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87835168","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Money laundering in a CBDC World: A Game of Cats and Mice","authors":"Daniel Dupuis","doi":"10.2139/ssrn.3793713","DOIUrl":"https://doi.org/10.2139/ssrn.3793713","url":null,"abstract":"Purpose\u0000The purpose of this study is to describe the present taxonomy of money, summarize potential central bank digital currency (CBDC) regimes that central banks worldwide could adopt and explore the implications of the introduction of each of these CDBC regimes for money laundering through the lens of the regulatory dialectic theory.\u0000\u0000\u0000Design/methodology/approach\u0000The methodology used in the analysis of significant recent events regarding the progress of central banks in establishing a CBDC and the implications for money laundering under a CBDC regime. This paper also reviews the literature regarding the Regulatory Dialectic to highlight potential innovative responses of money launderers to circumvent the controls generated through the implementation of a CBDC.\u0000\u0000\u0000Findings\u0000This study examines the impact of Kane’s regulatory dialectic paradigm on the feasibility of money laundering under a CBDC regime and identifies potential avenues that would be available for those seeking to launder money, based on the form a CBDC would take.\u0000\u0000\u0000Research limitations/implications\u0000This paper is unable as of yet to empirically evaluate anti-money laundering (AML) tactics under a CBDC regime as it has not yet been fully implemented.\u0000\u0000\u0000Practical implications\u0000Many central banks worldwide are evaluating the structure of and introduction of a CBDC. There are a number of forms that a CBDC could take, each of which has implications for individual privacy and for entities involved in AML efforts within financial institutions and the regulatory community. The paper has implications for AML experts who are considering how AML procedures would change under a CBDC regime.\u0000\u0000\u0000Social implications\u0000The regulatory dialectic predicts that regulatory response reactive, rather than proactive when it comes to socially undesirable phenomena. As central banks and governments seek to divert economic activity away from the laundering of the proceeds of illicit activity, there are tradeoffs in terms of a loss of privacy. The regulatory dialectic predicts a corresponding innovative response of those who wish to undermine the controls generated through the establishment of a CBDC.\u0000\u0000\u0000Originality/value\u0000To the authors’ knowledge, this is the first paper to explore the impact of a potential CBDC on money laundering and the potential innovative circumventions within the paradigm of the Regulatory Dialectic.","PeriodicalId":20999,"journal":{"name":"Regulation of Financial Institutions eJournal","volume":"352 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-02-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84870326","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Securities Regulation as Class Warfare","authors":"J. Macey","doi":"10.2139/SSRN.3789706","DOIUrl":"https://doi.org/10.2139/SSRN.3789706","url":null,"abstract":"This Article examines the regulatory goals of creating \"fair, orderly, and efficient\" securities markets in light of the recent issues involving trading in the shares of GameStop Corp. (GME) through the broker-dealer firm Robinhood Financial LLC. The GameStop/Robinhood saga casts significant doubt on the notion that the SEC is achieving its “tripartite purpose to maintain fair, orderly, and efficient markets, and facilitating capital formation.” Moreover, the saga provides further support for the view that market forces tend to make markets fairer, where fairness is defined as investors “getting what they pay for,” rather than as investors “beating the market,”” by earning abnormal returns. Further, market process tend to make markets more efficient, while regulation tends to make markets less efficient. Finally, it appears that regulation tends to further the interests of Wall Street elites over the interests of ordinary investors.","PeriodicalId":20999,"journal":{"name":"Regulation of Financial Institutions eJournal","volume":"38 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-02-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77902485","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Rise of FinTech: Promises, Perils, and Challenges","authors":"Moran Ofir, I. Sadeh","doi":"10.2139/ssrn.3788168","DOIUrl":"https://doi.org/10.2139/ssrn.3788168","url":null,"abstract":"FinTech innovations have transformed a variety of financial activities and have reshaped the structure of the financial market. This chapter provides a high-level overview of these transformations and examines their impacts on the financial market. It starts by identifying the key features of the current FinTech ecosystem: (1) massive processes of digitization and digitalization; (2) increasing use of Artificial Intelligence (AI) techniques; (3) increasing use of big data techniques; (4) and disintermediation. These features distinguish the current FinTech ecosystem from early applications of technologies to finance and form a framework through which the chapter proceeds to analyze the potential promises, perils, and regulatory challenges associated with the rise of FinTech.","PeriodicalId":20999,"journal":{"name":"Regulation of Financial Institutions eJournal","volume":"28 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-02-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77559669","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The European Central Bank’s Pandemic Bazooka: Mandate Fulfilment in Extraordinary Times","authors":"R. Smits","doi":"10.2139/ssrn.3824740","DOIUrl":"https://doi.org/10.2139/ssrn.3824740","url":null,"abstract":"An EU legal analysis of the European Central Bank's Pandemic Emergency Purchase Programme (PEPP), originally published in March 2020 in EULawLive, updated to include more references to the ECB's pandemic responses (prudential, monetary policy) and the EU's NextGenerationEU Recovery and Resilience Facility, and to the Bundesverfassungsgericht's decision on the Public Sector Purchasing Programme (PSPP) and the Court of Justice of the European Union's judgment on the subject (Weiss).","PeriodicalId":20999,"journal":{"name":"Regulation of Financial Institutions eJournal","volume":"211 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-02-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77510860","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Banks, Shadow Banks, and Business Cycles","authors":"Yvan Bécard, D. Gauthier","doi":"10.2139/ssrn.3785559","DOIUrl":"https://doi.org/10.2139/ssrn.3785559","url":null,"abstract":"Credit spreads on household and business loans move in lockstep and spike in every recession. We propose a theory as to why banks tighten their lending standards following a drop in market sentiment. The key feature is a procyclical shadow banking sector that shifts risk from traditional banks to investors through securitisation. We fit the model to euro‑area data and find that market sentiment shocks are the main driver of business and financial cycles over the past two decades.","PeriodicalId":20999,"journal":{"name":"Regulation of Financial Institutions eJournal","volume":"49 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-02-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75810173","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Higher Purpose, Banking and Stability","authors":"C. Mücke, L. Pelizzon, Vincenzo Pezone, A. Thakor","doi":"10.2139/ssrn.3791285","DOIUrl":"https://doi.org/10.2139/ssrn.3791285","url":null,"abstract":"This paper provides survey evidence on higher purpose for individuals and organizations and develops a theoretical model consistent with the evidence. The survey of 1,019 individuals in the U.S. sought to learn about their commitment to and perceived value from personal and organizational higher purpose. One striking finding from the survey is that when an organization has a written statement of higher purpose, its employees tend to trust their leaders to not only be socially responsible, but also to make better business decisions, i.e. corporate governance is perceived to be better by the employees. We then develop a simple theoretical model that provides an economic rationale for this finding. In the model, an investment in higher purpose credibly signals the firm owner’s ability/marginal productivity and elicits higher employee effort. When put in a banking context, the model shows that optimal contracting within a bank that pursues a higher purpose leads to higher wages for employees, higher monitoring effort and a lower probability of bank failure when the bank has more equity capital, even though the bank’s capital does not affect the bank’s higher purpose investment. Even absent a signaling motivation for investing in higher purpose, these results are qualitatively sustained if the bank’s employees care about its purpose. Additionally, in this case, banks that invest more in higher purpose pay lower wages, elicit higher employee effort and have lower failure probabilities for any given capital ratio. Banks with higher capital ratios still pay higher wages, but the effect of capital on wages becomes weaker as the bank’s higher purpose investment increases. The decrease in the exposure of the deposit insurer due to higher capital goes beyond the direct impact of capital on the bank’s probability of failure.","PeriodicalId":20999,"journal":{"name":"Regulation of Financial Institutions eJournal","volume":"53 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-02-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81157063","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Persuading Large Investors","authors":"Ricardo Alonso, K. Zachariadis","doi":"10.2139/ssrn.3781499","DOIUrl":"https://doi.org/10.2139/ssrn.3781499","url":null,"abstract":"A regulator who designs a public stress test to elicit private investment in a distressed bank must account for large investors' private information on the bank's state. We provide conditions for crowding-in (crowding-out) so that the regulator offers more (less) information to better-informed investors. Crowding-in obtains if investors' private information is not too discriminating of the state. We show that the region of the common prior is consequential: if crowding-in occurs for ex-ante optimistic investors then crowding-out follows if they were instead pessimistic. Investors' value from more precise private signals may come from the effect on the public test's precision.","PeriodicalId":20999,"journal":{"name":"Regulation of Financial Institutions eJournal","volume":"6 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-02-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75169382","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}