XVA models for the calculation of CVA, FVA (see for example (Burgard and Kjaer 2013)), KVA(Green, Kenyon, and Dennis 2014), MVA (Green and Kenyon 2014) and TVA (Kenyon and Green 2014a) have frequently been formulated at the counterparty level. However, it is clear that some elements of the...

This article examines the regulatory challenges raised by recent, overlooked changes in insurance markets that have led to a functional convergence between insurance and the broader financial sector.The law literature on financial regulation last addressed the issue of convergence over a decade...

Efforts to control bank risk address the wrong problem in the wrong way. They presume that the financial crisis was caused by CEOs who failed to supervise risk-taking employees. The responses focus on executive pay, believing that executives will bring non-executives into line — using...

As the Financial Crisis and the more recent European sovereign debt crisis illustrated, U.S. financial institutions represent uniquely opaque organizations for investors in capital markets. Although bank regulatory policy has long sought to promote market discipline of banks through enhanced...

This comment letter was recently submitted to the FDIC in response to their Single Point of Entry (SPOE) Strategy for implementing Dodd Frank's Orderly Liquidation Authority (Federal Register/Vol. 78, No. 243).In the comment letter, I describe SPOE as a promising first start, but urge the agency...

In this paper, I suggest that the regulation of the financial system, especially if the aim is to prevent financial crises, should be focused on dealing with the consequences of the crises, not on trying to avoid their causes, although it may seem counterintuitive at first sight. Contrary to the...

The importance of investment advisers to the financial well-being of their clients cannot be overstated. Individuals and institutions entrust trillions of dollars to investment advisers to manage on their behalf. This paper discusses and explains fiduciary principles in investment advice....

This paper characterizes the optimal banking union with endogenous participation in a two-country economy in which domestic bank failures may be contemporaneous to sovereign crises, giving rise to risk-sharing motives to mutualize the funding of bail-outs. Raising public funds to conduct a...

Recent years have seen a rediscovery of the fact that a healthy financial and economic system cannot be based on the lowest common behavioural denominator of what is technically permissible under the black letter of the law. Something more is needed – variously described as ‘sound culture',...

This essay discusses the economic case for regulating shadow banking. Focusing on systemic risk, shadow banking is defined as leveraging on collateral to support liquidity promises. Regulating shadow banking is efficient because of the negative externality stemming from systemic risk. However,...