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Colleen Baker

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PhD (Wharton) Professor Baker is an expert in banking and financial institutions law and regulation, with extensive knowledge of over-the-counter derivatives, clearing, the Dodd-Frank Act, and bankruptcy, in addition to being a mediator and arbitrator.

Previously, she spent time at the U. of Illinois Urbana-Champaign College of Business, the U. of Notre Dame Law School, and Villanova University Law School. She has consulted for the Federal Reserve Bank of Chicago, and for The Volcker Alliance.  Prior to academia, Professor Baker worked as a legal professional and as an information technology associate. She is a member of the State Bars of NY and TX. Read More

Christina Parajon Skinner has published “Central Bank Activism” in the Duke Law Journal.  Below is the abstract.  You can find a draft of the paper on SSRN here.

Today, the Federal Reserve is at a critical juncture in its evolution. Unlike any prior period in U.S. history, the Fed now faces increasing demands to expand its policy objectives to tackle a wide range of social and political problems–including climate change, inequality, and foreign and small business aid.

This Article develops a framework for recognizing and identifying the problems with “central bank activism.” It refers to central bank activism as situations in which immediate public policy problems push the Fed to aggrandize its power beyond the text and purpose of its legal mandates, which Congress has established. To illustrate, this Article provides in-depth exploration of both contemporary and historic episodes of central bank activism, thus clarifying the indicia of central bank activism and drawing out the lessons that past episodes should teach us going forward.

This Article urges that, while activism may be expedient in the near term, there are long-term social costs. Activism undermines the legitimacy of central bank authority, erodes central bank political independence, and ultimately renders a…

The following comes to us from Jeff Smith, Associate Director, Henry G. Manne Program in Law & Economics Studies.

The Law & Economics Center is pleased to announce that we are now accepting applications to the Workshop for Law Professors on Public Choice Economics. This program will be held at the Resort at Squaw Creek in Squaw Valley, California with attendees arriving on Wednesday, January 5 and departing on Sunday, January 9.

The Workshop for Law Professors on Public Choice Economics will help the attending professors enhance their understanding of public choice, including interest group theory, rent-seeking, rent-extraction, agency capture, bureaucracy and constitutional economics, regulatory competition, the political theory of loopholes, Bootleggers and Baptists phenomena, and public choice of the judiciary, among other topics. The workshop will broaden the professor-attendees’ understanding of these concepts and sharpen their analytical tools, allowing them to introduce greater economic sophistication and policy relevance to their academic work. This workshop is aimed at professors interested in teaching and conducting research related to public choice, and it will include a session at the end expressly devoted to group discussion designed to brainstorm about developing research agendas around the topics covered at the Workshop.

The LEC…

Jehan El-Jourbagy has published Impact of Corporate Response to Controversial Presidential Statements or Policies in 18 DePaul Bus. & Com. L.J. 69. Below is an excerpt from the analysis section that may be of interest to BLPB readers. A version of the paper can be found on SSRN here.

With the possible exception of Tesla and Under Armour responding to the Paris Climate Agreement withdrawal, the data demonstrates that statements, both direct and more nuanced, and silence in regard to Presidential communications have little to no impact on share price. Instead, there are more clear markers, such as when a corporation announces layoffs or a new product, that show a clear dip or rise, but the responses to Presidential communications had a minimal impact.

Diversity and inclusivity are generally universal values for corporations and issuing a statement in opposition to the travel ban could be viewed as consistent with those values. The data, however, does not indicate a correlation between a public statement and share price. Moreover, the data does not reveal any marked difference between companies who issued statements and who remained silent, perhaps suggesting that company leaders may feel free to support or oppose the President without…

Bernard Sharfman has posted an interesting op-ed on Insider (here).  Excerpt:

The idea behind ESG’s impact on climate change is that by moving money away from companies that spew fossil fuels, the funds can effectively make it cheaper for “clean” companies to raise money either through debt or equity offerings and more expensive for “dirty” companies. This sounds good in theory, but does not hold up in reality because the major effects of ESG funds are on the secondary market, where securities are traded but no new money is being raised. As explained by Fancy, investing in ESG funds does not provide new funding for those companies that would help mitigate climate change. “Instead, the money goes to the seller of the shares in the public market.” Basically, ESG products are buying stock in companies from other asset managers, not the underlying businesses, so they aren’t directly funding these firms at all….

If ESG funds do not mitigate climate change, what is the motivation for marketing these funds to investors? The simple answer is that the investment industry, which includes large investment advisers, rating agencies, index providers, and consultants, makes a lot more money when investors purchase shares…

Mark Roe has posted “Dodge v. Ford: What Happened and Why?” on SSRN (here). The first half of the abstract is excerpted below. My initial reaction to the abstract (I have not read the paper) is that lying in this context is similar to breaking the law when it comes to the business judgment rule.  IOW, just like a business decision to break the law is not protected by the BJR even if that decision otherwise maximizes shareholder value, so too should deceit be unprotected. This obviously has implications for our current stakeholder governance debate, given that this “noble lie” defense is one of the justifications given for greenwashing / woke-washing.

Behind Henry Ford’s business decisions that led to the widely taught, famous-in-law-school Dodge v. Ford shareholder primacy decision were three relevant industrial organization structures that put Ford in a difficult business position. First, Ford Motor had a highly profitable monopoly. Second, to stymie union organizers and to motivate his new assembly line workers, Henry Ford raised worker pay greatly; Ford could not maintain his monopoly without sufficient worker acquiescence. And, third, if Ford pursued monopoly profit in an obvious and explicit way, the Ford brand would have…

Dear BLPB Readers:

The Department of Business Law at California State University, Northridge, has an open faculty position: 

“The Department of Business Law invites applications for a tenure-track position at the Assistant Professor level. J.D. or J.S.D. from an ABA-accredited law school and admission to the bar at time of appointment required. In addition, previous experience and proven excellence in teaching law, business ethics, or related courses at the university level, a history of scholarly research and publications, experience practicing law, and business experience are preferred. An LL.M., M.B.A. or other graduate degree in business or economics from an accredited college or university, law review membership, and experience as a law clerk at the appellate level are desirable. At time of appointment, the candidate must meet and must continue to maintain current AACSB International “Scholarly Academic” standards of qualification throughout their tenure.”

The complete job posting is here.

I had a chance to read Chapter 7 on Clearinghouses [CCPs] in a recent report by the Task Force on Financial Stability and look forward to reading more of the report soon.  It’s a short chapter with a lot of excellent information.  I particularly appreciated its focus on the issue of clearinghouse ownership (too often left out of clearinghouse discussions), incentive misalignments, and tensions between shareholders and clearing members when CCPs are for-profit, public companies.  There is an especially helpful discussion on externalities in the current clearing ecosystem and a summary table of them accompanied by related recommendations (p.99).  I agreed with several of the chapter’s recommendations (starting on p.96) and with the statement that “Pervasive reforms of derivatives markets following 2008 are, in effect, unfinished business; the systemic risk of CCPs has been exacerbated and left unaddressed” (p.96). 

On p.94, the report mentions that clearing members “complained when, in December 2017, the CBOE and CME listed bitcoin contracts (which have extremely high volatility and which many members were not authorized to transact) and then commingled the contracts with the default fund for other instruments.”  I think the complaints are understandable and pointed out this issue in a previous post…

Dear BLPB Readers:

The Law and Taxation Department at Bentley University invites applicants for a tenure track position to begin fall 2022. The chosen candidate will teach both undergraduate and graduate law courses with a business focus. The standard teaching load for the tenure-track years is 2-2 (two courses per semester), with an expectation of an increased teaching load of 3-3 upon successful achievement of tenure. The chosen candidate will be expected to publish high quality and impactful scholarship in respected academic and/or practitioner journals.

The complete job posting is here.

Dear BLPB Readers,

I’m delighted to share that my recent article written with Professor Kimberly Houser, Sovereign Digital Currencies: Parachute Pants or the Continuing Evolution of Money (forthcoming, NYU Journal of Law & Business) is now posted to SSRN. 

Here’s its abstract:

Facebook’s Diem proposal, the growing interest in cryptocurrencies, and the decreasing use of cash have all raised concerns regarding the government’s ability to enact monetary policy and retain monetary sovereignty. While China has already launched their own sovereign digital currency (SDC), the U.S. Federal Reserve (the Fed) appears to be more concerned with getting an SDC “right rather than quickly.” As money and payment systems keep evolving, and the divergence between money and legal tender becomes greater, there is a need to investigate not only what effect any potential SDC would have on the financial system, including the possible disintermediation of banks, but also its impact on privacy and data security.

In this article we delve into the evolution of money and why the government finds itself at a crossroads with regard to the establishment of an SDC. Although numerous reasons have been given for establishing a SDC, the one aspect that must be acknowledged is…

Dear BLPB Readers:

Assistant Professor for Legal Studies in Business

Department of Management

Spears School of Business

Oklahoma State University – Stillwater, Oklahoma

Tenure-Track Faculty

Position: The Management Department in the Spears School of Business at Oklahoma State University invites applications for one tenure track position in Legal Studies at the assistant professor rank to begin as early as August 2022.

Candidates should demonstrate an interest in and a capacity for both conducting high-quality scholarly research and working with colleagues, as well as a high level of teaching competence. Assistant professors are given minimal service assignments and course preps as well as summer support to allow them to focus on their research programs. Salary and teaching loads are commensurate with a R1 comprehensive research university. Our preference is to hire research active faculty members with a 2:2 teaching load (12 credits).

The complete job posting is here: Download 2022 Fall Job Ad – LSB Asst Prof