Regulating Complexity in Financial Markets

Steven L. Schwarcz
As the financial crisis has tragically illustrated, the complexities of modern financial markets and investment securities can trigger systemic market failures. Addressing these complexities, this Article maintains, is perhaps the greatest financial-market challenge of the future. The Article first examines and explains the nature of these complexities. It then analyzes the regulatory and other steps that should be considered to reduce the potential for failure. Because complex financial markets resemble…

Is There a Law Instinct?

The widely held view is that legal systems develop in response to purposeful efforts to achieve economic, political, or social objectives. An alternative view is that reliance on legal systems to organize social activity is an integral part of human nature, just as language and morality now appear to be directly shaped by innate predispositions. This Article formalizes and presents evidence in support of the claim that humans innately turn…

Shades of the American Dream

Federal tax policies such as the mortgage interest deduction do not generally encourage anyone to become a homeowner, yet they do increase the cost of housing. Low-income homeowners regardless of race are least likely to be able to take advantage of the mortgage interest deduction. They pay for a benefit that they cannot receive. Middle- and upper-income black homeowners are less likely than middle- and upper-income white homeowners to benefit…

Elderly Drivers: Balancing Public Safety with Permanent Personal Mobility

Garrick F. D. Aplin

Criminal Liability for Internet Culprits: The Need for Updated State Laws Covering the Full Spectrum of Cyber Victimization

Kate E. Schwartz

Bailouts, Bonuses, and the Return of Unjust Gains

Tracy A. Thomas
In March 2009, ailing insurance giant American International Group (AIG) triggered a national outcry when it paid out $165 million in government bailout funds for employee bonus incentives. President Obama called the bonus payments an “outrage” and promised that his administration would “pursue every single legal avenue to block these bonuses and make the taxpayers whole.” He chastised the firm for its audacity of using borrowed taxpayer monies to reward…