Wednesday, June 2, 2021

Short Paper: Clearinghouse Shareholders and "No Creditor Worse Off Than in Liquidation" Claims

I thought I'd essentially copy the idea behind co-blogger Joshua Fershee's post from yesterday (thanks, Josh!) and share with readers that my new short article, Clearinghouse Shareholders and "No Creditor Worse Off Than in Liquidation" Claims is now available!  Similarly, my article is a combination of a prior post and my presentation at the fourth annual Business Law Prof Blog Symposium.  Here's its abstract:

Clearinghouses are the centerpiece of global policymakers’ 2009
framework of reforms in the over-the-counter derivative markets in
response to the 2007–08 financial crisis. Dodd-Frank’s Title VII
implemented these reforms in the U.S. More than ten years have now
passed since the establishment of this framework. Yet much work
continues on outstanding issues surrounding the recovery and
resolution of a distressed or insolvent clearinghouse. This Article
examines one of these issues: the possibility of clearinghouse
shareholders raising no creditor worse off than in liquidation claims
in resolution. It argues that such claims are nonsensical and should
be unavailable to clearinghouse shareholders. This would decrease
moral hazard in and promote the rationalization of the global
clearing ecosystem for derivatives.

I also want to encourage BLPB readers to review the perceptive commentary by Professor Thomas E. Plank on my article (here). Finally, I'd like to thank the Transactions law review student editors for their excellent work! 

https://lawprofessors.typepad.com/business_law/2021/06/short-paper-clearinghouse-shareholders-and-no-creditor-worse-off-than-in-liquidiation-claims.html

Colleen Baker, Financial Markets | Permalink

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