Georgetown Law Center最新文献

{"title":"Skin-in-the-Game: Risk Retention Lessons from Credit Card Securitization","authors":"Adam J. Levitin","doi":"10.2139/ssrn.1898763","DOIUrl":"https://doi.org/10.2139/ssrn.1898763","url":null,"abstract":"The Dodd-Frank Act’s “skin-in-the-game” credit risk retention require- ment is the major reform of the securitization market following the housing bubble. Skin-in-the-game mandates that securitizers retain a 5% interest in their securitizations. The premise behind skin-in-the-game is that it will lessen the moral hazard problem endemic to securitization, in which loan originators and securitizers do not bear the risk on the ultimate performance of the loans. Contractual skin-in-the-game requirements have long existed in credit card securitizations. Their impact, however, has not been previously examined.This Article argues that credit card securitization solves the moral hazard problem not through the limited risk retention of formal skin-in-the-game re- quirements, but through implicit recourse to the issuer’s balance sheet. Absent this implicit recourse, skin-in-the-game actually creates an incentive misalign- ment between card issuers and investors because card issuers have lopsided upside and downside exposure on their securitized card receivables. For- mally, the card issuers bear a small fraction of the downside exposure, but retain 100% of the upside, should the card balance generate more income than is necessary to pay the investors. The risk/reward imbalance should create a distinct problem because the card issuer retains control over the terms of the credit card accounts. Prior to the Credit CARD Act of 2009, the issuer could increase a portfolio’s volatility through rate-jacking: when interest rates and fees are increased, some accounts will pay more and some will default. Per the Black-Scholes option-pricing model, the increased volatility benefits the issuer because of the risk-reward imbalance.Despite the problems posed by the formal risk/reward imbalance, credit card securitization avoided the excesses of mortgage securitization. The ex- planation for this is that credit card securitization features complete implicit recourse. Implicit recourse exists because credit card securitization is not about risk transfer, but instead is about regulatory capital arbitrage and creat- ing a funding and liquidity source for the issuer. The implication is that for- mal skin-in-the-game requirements alone may be insufficient to ensure against moral hazard problems in securitization. Skin-in-the-game’s effectiveness will instead depend on its interaction with other deal features.","PeriodicalId":359023,"journal":{"name":"Georgetown Law Center","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124157788","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":"What Consensus? Ideology, Politics and Elections Still Matter","authors":"S. Salop","doi":"10.2139/ssrn.2255531","DOIUrl":"https://doi.org/10.2139/ssrn.2255531","url":null,"abstract":"This article, which was prepared for an ABA Antitrust Section Panel, discusses the role of ideology and politics in antitrust enforcement and the impact of elections in the last twenty year on enforcement and policy at the federal antitrust agencies. The article explains the differences in antitrust ideologies and their impact on policy preferences. The article then uses a database of civil non-merger complaints by the DOJ and FTC over the last three Presidential administrations to analyze changes in the number, type and other characteristics of antitrust enforcement. It also discusses change in vertical merger enforcement and other antirust policies such as amicus briefs, reports and guidelines. The article concludes that elections do matter and that the impact of elections on the DOJ and FTC has differed significantly.","PeriodicalId":359023,"journal":{"name":"Georgetown Law Center","volume":"145 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-04-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115278436","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 Dodd-Frank Act and Housing Finance: Can It Restore Private Risk Capital to the Securitization Market?","authors":"Adam J. Levitin, Andrey Pavlov, Susan M. Wachter","doi":"10.2139/ssrn.1970288","DOIUrl":"https://doi.org/10.2139/ssrn.1970288","url":null,"abstract":"Private risk capital has virtually disappeared from the U.S. housing finance market since the market’s collapse in 2008. This Article argues that private risk capital is unlikely to return on any scale until the informational problems in housing finance are resolved so that investors can accurately gauge and price the risks they assume. The Dodd-Frank Act represents a first step in reforming the U.S. housing finance. It takes a multi-layered approach, regulating both loan origination and securitization. Dodd-Frank’s reforms, however, fail to adequately address the opacity of credit risk information in mortgage markets and thus are insufficient for the restoration of private risk capital. The Article argues that Dodd-Frank reforms like “skin-in-the-game” credit risk retention fail to solve the informational problems in the housing finance market, as they merely replace one informational opacity with another. Instead, the Article argues, it is necessary to institute structural changes in the housing finance market, particularly the standardization of mortgage securitization, that force the production of information necessary for accurate risk-pricing.","PeriodicalId":359023,"journal":{"name":"Georgetown Law Center","volume":"43 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-12-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127856140","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":"Pari Passu and a Distressed Sovereign's Rational Choices","authors":"W. Bratton","doi":"10.2139/ssrn.505942","DOIUrl":"https://doi.org/10.2139/ssrn.505942","url":null,"abstract":"This Article interrogates the possibility that pari passu clauses in sovereign debt contracts legitimately can be read broadly so as to require pro rata payments to foreign creditors by sovereigns in default and forbid payments to favored classes of creditors. Many subscribe to a narrow interpretation, under which the clauses cover only contractual and legal priorities and do not regulate payments. The narrow interpretation makes sovereign debt compositions easier to conclude by depriving holdout creditors of a disruptive enforcement tool, arguably benefiting the bondholders as a group. This Article highlights benefits for the bondholders as a group under the broad reading, shifting to an ex ante time perspective and situating the clause in the economic context of sovereign lending. Debt contracts benefit sovereign bondholders in three ways when they create frictions that retard later compositions. First, the contracts diminish the likelihood of default by opportunistic sovereigns seeking to externalize the effects of economic reverses. Second, assuming severe financial distress, they make it less likely that the defaulting sovereign will attempt to impose the burden of restructuring on the particular class of bonds. Third, assuming a restructuring, they improve the bondholders' bargaining position. More generally, the pari passu clause, read broadly, constrains the distressed sovereign's range of choices, enhancing the enforcement power of the bonds, and arguably lowering the long run cost of sovereign debt capital. The Article depicts sovereign debt as a world of tradeoffs and contradictions, where a contract that makes the bondholders better off means one thing on the day it is executed and delivered and another thing in the event of severe distress later on. With private debt, such contradictions are surmounted through the intervention of the bankruptcy regime. With sovereign debt there is no bankruptcy, forcing the parties to paper over the tensions between ex ante and ex post by drafting vaguely. Intractable questions of interpretation arise in consequence. From this perspective, judicial attachment of the broad reading can be justified without being dictated and without the narrow reading being rendered implausible or illegitimate. The interpreting court must choose between the readings under uncertainty.","PeriodicalId":359023,"journal":{"name":"Georgetown Law Center","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-08-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129368629","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 Inherent Jurisdiction of WTO Tribunals: The Select Application of Public International Law Required by the Judicial Function","authors":"A. Mitchell, D. Heaton","doi":"10.2139/ssrn.1433616","DOIUrl":"https://doi.org/10.2139/ssrn.1433616","url":null,"abstract":"Many important issues confronting WTO law - the capacity of regional trade agreements (‘RTAs’) to prevent a claim from being adjudicated before the WTO, the ability of a Member to hold another Member to a representation, and the extent to which WTO Panels and the Appellate Body can control the procedure of complaints - depend for their resolution almost entirely on the degree that rules of international law are applicable in WTO dispute settlement. Given the increasing proliferation of RTAs, the likelihood of WTO Panels having to deal with conflicting international obligations is increasing - indeed, it may be required in the impending US - Tuna/Dolphin (Mexico) dispute. This paper argues that a principled (if sophisticated) approach to international law in WTO dispute settlement is necessary to provide ‘security and predictability to the multilateral trading system’. This approach is based on recognizing that WTO Panels and the Appellate Body (‘WTO Tribunals’) have an inherent jurisdiction that allows them to apply select international law (outside the WTO Agreements) where three criteria are satisfied. Specifically: the application of international law must be necessary for the WTO Tribunal to properly discharge its function; the relevant international law must have no substantive content of its own; and the application of international law must not be inconsistent or incompatible with the provisions of the Dispute Settlement Understanding (‘DSU’) as well as with the objects and purposes of the covered Agreements. Given this framework, this paper examines several procedural and good-faith based principles of international law that may be relevant to WTO disputes, as well as the conceptual difficulties that they cause.","PeriodicalId":359023,"journal":{"name":"Georgetown Law Center","volume":"61 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-07-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121224266","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":"Team Production in Business Organizations: An Introduction","authors":"Margaret M. Blair, Lynn A. Stout","doi":"10.2139/ssrn.180991","DOIUrl":"https://doi.org/10.2139/ssrn.180991","url":null,"abstract":"For the past two decades, legal and economic scholarship has tended to assume that the central economic problem addressed by corporation law is getting managers and directors to act as faithful agents for shareholders. There are other important economic problems faced by business firms, however. This article introduces a Symposium that explores one of those alternate economic problems: the problem of \"team production\". Team production problems can arise whenever three conditions are met: (1) economic production requires the combined inputs of two or more individuals; (2) at least some of these inputs are \"team-specific,\" meaning they have a significantly higher value when used in the team than in their next best use; and (3) the gains resulting from team production are nonseparable, making it difficult to attribute any particular portion to any single team member's contribution. In such situations, it can be difficult or impossible for team members to draft explicit contracts that protect their team-specific investments from other team members' opportunism. Thus the nine articles in the Symposium explore the implications of team production analysis for a wide variety of business organizations, including public corporations, private companies, multinational firms, and venture capital firms.","PeriodicalId":359023,"journal":{"name":"Georgetown Law Center","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1999-09-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131481183","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":"Patent Damages and Real Options: How Judicial Characterization of Non-Infringing Alternatives Reduces Incentives to Innovate","authors":"J. Hausman, Gregory K. Leonard, J. Sidak","doi":"10.15779/Z38Q112","DOIUrl":"https://doi.org/10.15779/Z38Q112","url":null,"abstract":"The legal framework under which patent damages are calculated changed substantially after the Federal Circuit decided Grain Processing Corp. v. American Maize-Products Co. in 1999. Perhaps the most important question in the typical lost profits analysis is determining the fraction of the infringing sales that constitute lost sales to the patent holder. The answer to this question usually depends on the set of non-infringing substitute products to which the customers of the infringing product could have turned in the but-for world where the infringing product was not available to them. Before Grain Processing, the case law as a legal matter generally restricted the set of non-infringing substitute products to include only products that were actually sold in the marketplace. For example, an infringer could claim that it would have continued to sell a non-infringing product that it had actually been selling and that this product would have captured some of the infringing sales, which would tend to limit the patent holder's lost sales. However, the infringer could not claim that it would have developed and introduced some new non-infringing product in the but-for world and that this product would have captured some of the infringing sales. Grain Processing eased this restriction on the set of non-infringing substitutes available in the but-for world by allowing an infringer to claim that it would have offered a non-infringing product that, although not actually sold in the marketplace, was technically feasible at the time and could have been made commercially available relatively quickly. The Grain Processing decision then went further and concluded that, in the particular case at issue, the plaintiff was not entitled to lost profits because the infringer's non-infringing product would have been identical from the point of view of customers (though more costly to the infringer). Damages were therefore calculated on a reasonable royalty basis only. Although Grain Processing has generated much scholarly commentary, we are unaware of any article considering the factor that we see as the decision's most important economic ramification: the grant of a free option to the infringer. Although it is widely appreciated how Grain Processing has made it more difficult for patent holders to claim lost profits damages, it is less well understood how Grain Processing has affected the incentives of companies to risk litigation by using patented technology (without a license) rather than to avoid infringement by using an economically inferior non-infringing technology. Whether the patent is valid and infringed is not known until the litigation takes place. A patent only provides the patent holder with the right to sue for infringement. A court decides whether the patent is valid and infringed. We find that the grant of a free option is contrary to the basic framework of the patent system in the United States. If a firm chooses to risk litigation and use the patented ","PeriodicalId":359023,"journal":{"name":"Georgetown Law Center","volume":"38 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133506825","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 Movies of Others - Tension between Culture and Trade: The Example of the Audiovisual Co-Production Agreement between South Africa and Germany","authors":"Franziska Sucker","doi":"10.2139/SSRN.2271210","DOIUrl":"https://doi.org/10.2139/SSRN.2271210","url":null,"abstract":"Commitments towards cultural diversity reflect attempts at creating a balance between trade and culture. The aims of such commitments are to avoid the loss of identity of cultural goods through the process of homogenisation and commercialization. Rapid increases in digital technology underscore the necessity of this discussion, as technology accelerates the trade of all products, including products derived from a multitude of cultures. While this certainly represents an opportunity for economic growth, it also has the very real effect of creating an unrestrained, increasingly digitalized market. A market, if dominated by the West, is feared would lead to cultural homogenisation and thus the loss of cultural identity, clearly illustrated through the film industry.Against this background, for most African countries co-production agreements are the key for local content productions; and thereby enforce cultural identity and contribute to cultural diversity and economic growth. The example of the Agreement on Audiovisual Co-productions between South Africa and Germany illustrates the tension and conflict these agreements cause. South Africa and Germany have, according to the UNESCO Diversity Convention, on the one hand the right to conclude such a Co-production Agreement and have even the obligation to endeavour to do so. On the other hand the Agreement violates the Most-Favoured-Nation-principle of the WTO-law; for South Africa in regards to goods and services and for Germany at least in regards to goods because I suggest that Germany’s MFN-exemption has not expired after ten years. Moreover, it potentially violates the SCM-Agreement.Based on this analysis, I will point out some consequences of this legal situation for South Africa and illustrate that local African content is jeopardised. Moreover, the outcome will underline the importance of the reformation of the WTO to make it more culturally sensitive and show how trade commitments can influence a government’s leeway in other fields of politics.","PeriodicalId":359023,"journal":{"name":"Georgetown Law Center","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133230278","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}