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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

Professor Saule T. Omarova at Cornell Law School recently posted (here) a new article to SSRN, Technology v. Technocracy: Fintech as a Regulatory Challenge (forthcoming, Journal of Financial Regulation).  I’m excited to read it.  Omarova’s articles are always excellent and it’s on an important, timely topic.  Here’s the abstract:

Technology is a tool. How to use it, for what purposes and to what effects, is a choice. What does this choice involve in the context of fintech? And how can it be translated into a coherent strategy of fintech regulation? These questions are at the heart of this article. Taking a broad view of fintech as a systemic force disrupting the very enterprise of financial regulation, as opposed to any particular regulatory scheme, the article offers a conceptual framework for the development of a more cohesive and effective public policy response to fintech disruption.

The article argues that the currently dominant technocratic model of financial regulation is inherently limited in its ability to respond to systemic challenges posed by fintech. The existing regulatory model operates primarily through the mechanisms of structural compartmentalization, bureaucratic specialization, and narrow targeting of isolated and well-controlled micro-level phenomena. Fintech, however…

At the University of Michigan’s Center on Finance, Law & Policy, an important project is underway on The Central Bank of the Future.  It’s a great, timely topic.  The project’s website explains that: “In partnership with the Bill and Melinda Gates Foundation, this project explores the mandate and design of central banks to consider whether they might play an even stronger role in promoting financial inclusion, financial health, and a more inclusive economy. More broadly, it creates a vision for what the “central bank of the future” might look like and focuses in particular on how emerging technology could support central banks in their efforts to promote financial inclusion, growth, and development.”

The March 20, 2020, deadline is fast approaching to submit academic papers, policy proposals, and pitches for technology products or services to the Central Bank of the Future Conference (w/ co-host Federal Reserve Bank of San Francisco), November 16-17, 2020.  A link to all of the details of the call for papers is here.

What’s the #1 new release in Banking Law on Amazon?  I’m glad you asked!  It’s Professor David Zaring’s first book, The Globalized Governance of Finance (Cambridge University Press).  In 2008, Zaring joined Wharton’s Legal Studies and Business Ethics Department as an assistant professor.  At the time, I was a PhD student in the Department and also focused on banking law.  So, it was really exciting for me to have a banking law scholar join us and I’m thrilled to now have a chance to highlight his new book.  My copy is on its way from Amazon, so for now, I’ll share Zaring’s description of his book and my own thoughts with BLPB readers soon!

The book pulls together work I’ve done on the regulatory networks – the Basel Committee, IOSCO, IAIS, e.g., – that have become the global taste for harmonizing financial regulation.  I think the regimes, and their relative bindingness (especially Basel), are interesting in their own right, and they are also an interesting way of doing global governance, where the sine qua non is often thought to be a treaty enforced by a tribunal, a la the World Trade Organization. 

But in finance, you see neither of those…

At this point, we’re a bit past the New Year, but you might still be thinking about the conferences you’ll attend in 2020, right?  Here are some great ideas:   

The Academy of Legal Studies in Business has a great annual conference in early August.  This year it’s in Providence, Rhode Island, August 4-8, 2020.  I’ve never been to Providence, but I hear it’s lovely.  I can’t wait! 

The Academy also has a number of regional conferences.  Check out all the options (if I missed one, send me an email)!

Canadian ALSB Annual Conference April 30-May 2, 2020 (Toronto, Canada)

Great Lakes ALSB, Fall 2020 (Grand Rapids area, Michigan – check back for more info)

Mid-Atlantic Academy of Legal Studies in Business, April 23-25, 2020 (Atlantic City, NJ)

Mid-West Academy of Legal Studies in Business, March 26-27, 2020 (Chicago, Illinois)

North Atlantic Regional Business Law Association Annual Conference, April 4, 2020 (Easton, Massachusetts)

North East Academy of Legal Studies in Business, May 1-3, 2020 (Lakeville, Connecticut)

Pacific Northwest Academy of Legal Studies in Business, April 23-25, 2020 (Vancouver, Canada)

Pacific Southwest Academy of Legal Studies in Business, February 13-16, 2020 (Palm Springs, California)…

I promised to check back in after negotiating The House on Elm Street (here).  I’m checking in!  We negotiated this exercise – which contains both legal and ethical issues – in my MBA Business Ethics/Legal course this evening.  It proved to be a great learning experience.  My previous post mentioned that Professor Siedel had made its use easy by creating thorough teaching notes.  And as I suspected, while it might be ideal to have students read a negotiation text or have a full 75 minutes to debrief the exercise, neither proved essential to a valuable learning experience.  It also provided a great segue into agency law, another of tonight’s topics.

During our discussion of ethical issues, I mentioned Professor Clayton M. Christensen’s How Will You Measure Your Life?  This past week, this question became particularly poignant.  Christensen, one of Harvard Business School’s leading lights, passed away at the age of 67.  Several years ago, BYU Law School Dean Professor Gordon Smith and I started “The Business Ethics Book Club for Law Professors.”  The wonders of technology enabled several of us business law professors from all over the country to gather virtually about once a semester…

On January 17, I headed to the University of Florida’s Warrington College of Business to be a discussant at the Huber Hurst Seminar.  A great event!  On the same day, Randal K. Quarles, the Vice Chair for Supervision (a position created by Dodd-Frank) and Governor of the Federal Reserve System gave a speech, Spontaneity and Order: Transparency, Accountability, and Fairness in Bank Supervision, at the 2020 American Bar Association Banking Committee Meeting.  Legal scholars have focused scant attention on bank supervision in the past, but this is starting to change.  It can be a challenging area to work in as Wharton Assistant Professor Peter Conti-Brown explains in The curse of confidential supervisory information.  Indeed, confidential supervisory information is protected from disclosure with criminal penalties.     

Bank regulation (which has received a bit more attention) and bank supervision, though linked concepts, are distinct.  Supervision “implements the regulatory framework.”  An important tension exists in banking supervision.  In his speech, Quarles explains that “We have a public interest in a confidential, tailored, rapid-acting and closely informed system of bank supervision.  And we have a public interest in all governmental processes being fair, predictable, efficient, and accountable.  How…

Wharton Assistant Professor Peter Conti-Brown recently posted another important work about the Federal Reserve System: Restoring the Promise of Federal Reserve Governance (here).  I highly recommend it to all BLPB readers, especially those wanting to quickly learn a lot about the U.S. central bank, one of the most important of U.S. institutions.  Here’s the abstract:  

The US Federal Reserve System (Fed) is famous for its organizational complexity. Overlooked in debates about the costs and benefits of this complexity for the Fed’s legitimacy, independence, and accountability is the congressional vision of what the Fed should be. The central bank is governed by a highly accountable seven-person Board of Governors to manage the rest of the system. Time and experience have eroded this authority as a matter of practice but not as a matter of law. The Fed governors are supposed to supervise the system, a legal aspiration that has increasingly been enervated by institutional drift. Using empirical and historical tools, this paper discusses the erosion of the Board of Governors over the Fed’s century-long history, including the substantial reduction in real compensation for the governors, their diminished participation in Federal Open Market Committee (FOMC) meetings, and the increased…

I’ve previously blogged about using negotiation exercises in my undergraduate and graduate Business Law/Legal Environment courses (here).  I’ve also mentioned that, having taught both business law and negotiation courses in a law school, I know that such exercises would also work well in a law school business law course.   

Last August, at the Annual Conference of the Academy of Legal Studies in Business, I had the good fortune of catching up with Professor Susan Marsnik from the University of St Thomas Business School.  Eventually, our conversation turned to one of my favorite topics: negotiation!  Marsnik mentioned that Professor George Siedel, the Williamson Family Professor of Business Administration Emeritus and the Thurnau Professor of Business Law Emeritus at the University of Michigan, had written some great negotiation materials (here), and they were free!  Obviously, I couldn’t wait to learn more!  And now that I have, via Marsnik’s help, I wanted to pay it forward!  

Siedel’s comprehensive negotiation materials center on the sale of a house, and include Seller/Buyer roles.  He shares that “Over the years, I have developed and tested “The House on Elm Street” exercise in undergraduate and MBA courses and in executive seminars…

I want to get an early start on wishing a HAPPY NEW YEAR to all BLPB readers!  May 2020 be one of your best years yet!  I’m celebrating by going to my very first “Shrimp Drop” with my mom.  Turns out that Fernandina Beach, FL. is the “Birthplace of the Modern Shrimping Industry.”  I do love shrimp!

Other than this, I can’t think of a more exciting way to ring in 2020 than by reading a new, fantastic article on banking!  Fortunately, I didn’t have to look far.  Jeremy C. Kress and Matthew C. Turk recently posted: Too Many to Fail: Against Community Bank Deregulation (here).  Legal scholarship has thus far paid scant attention to community banks.  After reading their work, you’ll understand why this shortfall is unfortunate, and this article so important.  Here’s the abstract:  

Since the 2008 financial crisis, policymakers and scholars have fixated on the problem of “too-big-to-fail” banks. This fixation, however, overlooks the historically dominant pattern in banking crises: the contemporaneous failure of many small institutions. We call this blind spot the “too-many-to-fail” problem, and document how its neglect has skewed the past decade of financial regulation. In particular, we argue…

As a historical matter, the U.S. has twice successfully restructured its finances: “once in the 1790’s under Alexander Hamilton’s debt repayment scheme and again at the start of the New Deal when it abrogated the gold clauses in its debt instruments.” (p.6)  Could the U.S. restructure its debt again?  Would it be constitutional?  Might the U.S. constitutional framework even facilitate this?  These are important, timely issues explored in a fascinating new essay, Restructuring United States Government Debt: Private Rights, Public Values, and the Constitution (here), by Edmund W. Kitch & Julia D. Mahoney.  

ABSTRACT. Mainstream policy discussions take as given that the United States will and must pay its debts in full and on time, and that “restructuring” is legally and politically impossible. In our judgment, this assumption is unwarranted. Far from being unthinkable, under some circumstances restructuring the debt of the United States would merit serious consideration, and these circumstances may well be fast approaching. We diverge from the standard wisdom for two reasons. First, we doubt that payments on treasury obligations will necessarily take precedence over what the electorate sees as more pressing needs, including national security and price stability. In particular, we…