Tuesday, January 19, 2016

Rob Weber on Comprehensive Capital Analysis and Review at the CBSB

Rob Weber posted on the Columbia Law School Blue Sky Blog an article titled The Comprehensive Capital Analysis and Review and the New Contingency of Bank Dividends, highlighting his recent paper on the topic.

In both the post, and in greater detail in the paper, Rob highlights three aspects of the CCAR program:

[(1)] the significant practical implications of the CCAR for large U.S.-domiciled banks....[(2)] its reliance on discretionary judgments by regulators concerning a hypothetical, uncertain future... [and (3) the CCAR as a] “risk regulation” regime – a designation developed in the environmental, health, and safety (“EHS”) regulatory context that has been underappreciated, underutilized, and undertheorized in the financial regulatory context.

Focusing on this third aspect, Rob states that:

The risk regulation model ... confronts head-on the necessity of basing regulatory intervention into otherwise private activity on a discretionary assessment of an uncertain, hypothetical, and conjectural harm. It is no objection that the harm has not yet occurred. The uncertainty of the harm is a feature, not a bug, of the system. 

The post is available here, and the full paper is available here.

-Anne Tucker


Anne Tucker, Financial Markets, Research/Scholarhip | Permalink


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