1,721,267 research outputs found
Replication Data for: The Whistleblower Industrial Complex
No full textThis page contains the data necessary to replicate the results of "The Whistleblower Industrial Complex" by Alexander I. Platt, published in the Yale Journal on Regulation (2023)
Stakeholder Capitalism in the Time of COVID: Appendix
No full textThis page contains the appendix to "Stakeholder Capitalism in the Time of COVID" by Lucian A. Bebchuk, Kobi Kastiel, and Roberto Tallarita, published in the Yale Journal on Regulation (2023)
Replication Data for: Privacy for Sale: The Law of Transactions in Consumers’ Private Data
No full textThis page contains the code and instructions necessary to replicate the results of "Privacy for Sale: The Law of Transactions in Consumers’ Private Data" by Christopher G. Bradley, published in the Yale Journal on Regulation (2023)
Methodological Appendix for: In Search of the Public Interest
No full textThis page contains the methodological appendix for "In Search of the Public Interest" by Jodi L. Short, published in the Yale Journal on Regulation (2023)
Replication Data for: Restoring Indian Reservation Status: An Empirical Analysis
No full textThis page contains the code and instructions necessary to replicate the results of "Restoring Indian Reservation Status: An Empirical Analysis" by Michael K. Velchik & Jeffery Y. Zhang, published in the Yale Journal on Regulation (2023)
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The Wages of Failure: Executive Compensation at Bear Stearns and Lehman 2000-2008
Get PDFThe standard narrative of the meltdown of Bear Stearns and Lehman Brothers assumes that the wealth of the top executives of these firms was largely wiped out along with their firms. In the ongoing debate about regulatory responses to the financial crisis, commentators have used this assumed fact as a basis for dismissing both the role of compensation structures in inducing risk-taking and the potential value of reforming such structures. This paper provides a case study of compensation at Bear Stearns and Lehman during 2000-2008 and concludes that this assumed fact is incorrect.
We find that the top-five executive teams of these firms cashed out large amounts of performance-based compensation during the 2000-2008 period. During this period, they were able to cash out large amounts of bonus compensation that was not clawed back when the firms collapsed, as well as to pocket large amounts from selling shares. Overall, we estimate that the top executive teams of Bear Stearns and Lehman Brothers derived cash flows of about 1 billion respectively from cash bonuses and equity sales during 2000-2008. These cash flows substantially exceeded the value of the executives’ initial holdings in the beginning of the period, and the executives’ net payoffs for the period were thus decidedly positive. The divergence between how the top executives and their shareholders fared implies that it is not possible to rule out, as standard narratives suggest, that the executives’ pay arrangements provided them with excessive risk-taking incentives. We discuss the implications of our analysis for understanding the possible role that pay arrangements have played in the run-up to the financial crisis and how they should be reformed going forward.Accepted Manuscrip
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Buying Troubled Assets
No full textThis paper analyzes how government intervention in the market for banks' troubled assets is best designed, and also uses this analysis to evaluate the public-private investment program announced by the U.S. government in March 2009. I begin by presenting the case for using government funds to restart the market for troubled assets. I then discuss the advantages of providing government capital to competing privately managed funds, a strategy I have advocated in past work, and I outline the key elements that such a plan should include.
Based on this analysis, I propose three improvements to the government's current plan:
• Introducing a competitive mechanism that would ensure that the government's subsidy to participating private parties is kept at a minimum;
• Redesigning the plan to provide such private parties with incentives aligned with those of taxpayers rather than highly skewed incentives to overpay for troubled assets; and
• Precluding banks that hold significant amounts of troubled assets from participating as managers or private investors in funds set up under the program.
The proposed changes would address most of the concerns that have been raised by critics of the administration's program. In particular, they would reduce costs to taxpayers, prevent excessive and unnecessary gains by private parties, and produce market prices that can be relied on for valuing assets that remain on banks' books.
The paper builds on and incorporates elements of my September 2008 and February 2009 working papers on using privately managed funds for buying troubled assets, A Plan for Addressing the Financial Crisis (Harvard Law & Econ. Discussion Paper No. 620, 2009), available at http://papers.ssrn.com/abstract =1273241, and How To Make TARP II Work (Harvard Law & Econ. Discussion Paper No. 626, 2009), available at http://papers.ssrn.com/abstract =1341939.Version of Recor
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Lowering the Cost of Bank Recapitalization
No full textEfforts to recapitalize banks in the current crisis have to date been focused on government assistance under the TARP, rather than private investment, and on bank holding companies, rather than banks. We describe three alternative or complementary approaches designed to lower the cost of bank recapitalizations by drawing in funds from the private sector and focusing on banks: rights offerings, debt restructurings, and FDIC-assisted bridge banks. Each approach was used in dealing with problem banks in the 1990s; each can be pursued without additional legislation; and each is worth considering now. We also propose two legal changes that would assist bank recapitalization: (1) the Fed should further modestly relax its rules under the Bank Holding Company Act to eliminate the presumption of "control" by investors at the current threshold of 5%, which would permit more capital to be invested in banks by private equity and other institutional investors; and (2) Congress should consider a new statute to streamline the recapitalization of bank holding companies by moving them outside current bankruptcy laws into a new resolution regime similar to the FDIC regime currently used for banks.Author's Origina
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