Bonded Bankers

An op-ed by Mark Roe. Since the global financial crisis, regulators have worked hard to make the world’s big banks safer. The fundamental problem is well known: major banks have significant incentives to take on excessive risk. If their risky bets pay off, their stockholders benefit considerably, as do the banks’ CEOs and senior managers, who are heavily compensated in bank stock. If they do not pay off and the bank fails, the government will probably pick up the tab. This confluence of economic incentives to take on risk makes bank managers poor guardians of financial safety. They surely do not want their bank to fail; but, if the potential upside is large enough, it is a risk they may find worth taking.

Is Dodd-Frank sapping US ECM mojo?

The Committee on Capital Markets Regulation recently issued a rather odd and in my view nakedly self-serving report, decrying its contention that the competitiveness of the US equity capital markets is showing continued signs of weakness, and concluding that measures of aversion to US public equity markets are at levels not seen since the global financial crisis. “The competitive landscape of US equity capital markets has started 2014 with a thud,” said CCMR director Hal Scott, Nomura Professor and Director of the Program on International Financial Systems at Harvard Law School. “Foreign companies are choosing to raise capital outside US public markets at rates not seen since the financial crisis.”

After Horton case, Massachusetts fell behind on criminal justice

An op-ed by Nancy Gertner. Anyone of a certain age remembers Willie Horton. Furloughed in 1986 from a life sentence for murder, Horton, who is black, raped a white woman and assaulted her fiancé. But Horton’s legacy extends beyond the horrific crime he committed. Many have blamed Governor Michael Dukakis’s failed presidential bid that year on publicity surrounding the case. Less often discussed is how far Horton’s crime set back criminal justice reform in Massachusetts — and still does to this day.

The Man Who Made Libertarians Wrong About the Constitution

A book review by Cass R. Sunstein. When I joined the faculty of the University of Chicago Law School in 1981, there were two defining figures: Richard Posner and Richard Epstein. Posner was the world’s most important voice in the emerging field of “law and economics.” At the time he believed that courts should “maximize wealth.” Epstein, a defender of personal autonomy with strong libertarian inclinations, was Posner’s most vocal critic. At the University of Chicago Law School lunch table, where the faculty ate four times each week, the two had some fierce struggles. Tempers flared. No one who was there will forget those lunches, which sometimes seemed like a form of combat.

An H-1B cap hike would mean a grim future for workers

If Congress approves comprehensive immigration reform, it will likely more than double the cap on H-1B visas. What would happen then?…Those predictions came from a group that included Ron Hira, assistant professor of public policy at the Rochester Institute of Technology; Hal Salzman, professor of planning and public policy at Rutgers; Michael Teitelbaum, a senior research associate at Harvard Law School; and Norm Matloff, a professor of computer science at University of California at Davis.

Koh receives 2014 Great Negotiator Award (video)

Ambassador Tommy Koh LL.M. ’64 of Singapore was recently presented with the 2014 Great Negotiator Award by the Program on Negotiation at Harvard Law School and the Harvard Kennedy School’s Future of Diplomacy Project at the Belfer Center for Science and International Affairs.