Preface

     This site offers free supplemental materials for Barr, Jackson & Tahyar, Financial Regulation: Law and Policy (Foundation Press, 2d ed., 2018). For the most part, the materials posted here cover important developments since the second edition went to press in the first quarter of 2018.  In a limited number of cases, we also include older documents that some instructors may wish to emphasize in their courses.  We also include a number of HLS Case Studies on Financial Regulation, which are described in  Memorandum on Case Studies for Second Edition of Financial Regulation - April 2018.  The posting of materials follows the structure of the textbook, with case studies posted at the end of the part of the book with which each case study is most closely associated.

     If you have any suggestions about additional materials that should be posted here or problems downloading materials or ideas about the textbook or case studies, please feel free to contact Howell Jackson at hjackson@law.harvard.edu.

     Here’s an errata sheet for the second edition.

     Good luck.

Updated:  August 15, 2018

 

PART I. INTRODUCTION TO FINANCIAL REGULATION

1.1. Finance Today

2017 FSOC Annual Report -- Most recent annual report of FSOC with current assessment of systemic risks in the financial system.

Speech of Federal Reserve Board Governor Daniel K. Tarullo on Pedagogy and Scholarship in a Post-Crisis World (Oct. 21, 2016) -- Perspective of former Fed Governor on pedagogy and scholarship in the field.

Deutsche Bank Chartbook on U.S. Banks (Mar. 2017) -- Deck slides with recent financial data and statistics, focusing primarily on the banking sector.  May also be useful in connection with Chapter 1.5.

1.2. The History of U.S. Financial Regulation: A Thematic Overview

Early in his adminstration, President Trump issued an Executive Order on Core Principles, which led to four Treasury Department Reports focused on different areas of financial regulation.  All but the last of these reports (the one of FinTech and Innovation) are discussed in the second edition, but the full documents are important and may be of interest.

1.3. Regulatory Frameworks

Additional readings on proposals for reforming regulatory strutures in the United States:

Additional cases and commentary addressing the constitutionality of the CFPB (and other single-headed agencies):

1.4. The Regulatory Perimeter

1.5. A Tour of Financial Statements

HLS Case Studies for Part I

HLS Case Study - Federal Preemption of State Consumer Protection - August 2017-- Case study exploring preemption after the Dodd-Frank Act; could be used as an extension of discussion in Chapter 1.4 or in connection with Part V. 

HLS Case Study - Unidentified Financial Institutions - April 2018 -- Exercise on balance sheets and income statements that could be used in connection with Chapter 1.5 to explore basic concepts of accounting.


 

PART II. INSURED DEPOSITORY INSTITUTIONS

2.1. The Impact of Charter Choice

In July of 2018, the Treasury Department issued a report on FinTech and Innovation, prompting a number of related actions and raising questions about legal challenges dismissed previously on procedural grounds.

2.2. Activities Restrictions and the Business of Banking

2.3. Portfolio Diversification and Affiliate Transactions

2.4. Deposit Insurance

2.5. Capital Regulation: An Introduction

2.6. Capital Regulation: Pre-Financial Crisis to Basel II

2.7. Capital Regulation: Basel III and Beyond

On May 24, 2018, President Trump signed into law the "Economic Growth, Regulatory Relief, and Consumer Protection Act," which, among other things provided regulatory relief for smaller and certain regional banking organizations.

HLS Case Studies for Part II

HLS Case Study - OCC’s Legal Authority to Offer National Bank Charters to FinTech Companies - May 2017 -- Case study could be used in connection with Chapter 2.1 to explore the chartering authority of the OCC.

HLS Case Study - Exercise on Alternative Strategies for Depository Institutions  -- Exercise could be used in connection with Chapter 2.2 to explore incentives of bank shareholders with respect to the allocation of bank assets.

 

PART III. INSURANCE

3.1. Introduction to Insurance Regulation

U.S. Department of the Treasury, A Financial System That Creates Economic Opportunities: Asset Management and Insurance (Oct. 2017) -- Treasury Department report with numerous recommendations related to insurance.

3.2. The Protection of Consumers in Insurance Regulation

3.3. The Role of Federal Government in Insurance Regulation

 

HLS Case Studies for Part III

HLS Case Study - Ames’ Auto Insurance Regulations - Racial Disparity - August 2017 -- Case study could be used in connection with Chapter 3.2 to explore racial disparities in automobile insurance rates.

 

PART IV. SECURITIES FIRMS AND CAPITAL MARKETS

4.1. Introduction to the Regulation of Securities Firms

U.S. Department of the Treasury, A Financial System That Creates Economic Opportunities: Capital Markets (Oct. 2017) -- Treasury Department report with numerous recommendations related to securities firms and capital markets.

4.2. Securities Firms and the Retail Investor

The fiduciary duty rule promulgated by the Obama Administration's Department of Labor has been a focus of criticism by the Trump Administration and was eventually invalidated by the Fifth Circuit in Spring of 2018. Shortly thereafter the SEC intervened with a related set of proposals, including a proposed Regulation Best Interest. These postings summarize those developments:

4.3. Securities Firms in Corporate Transactions

4.4. Exchanges and Trading

Recent developments related to SEC Market Reforms:

HLS Case Studies for Part IV

HLS Case Study - Lending Club - August 2017 -- This case study could be used in connection with Chapter 4.1 to explore the definition of securities under federal securities law.

 

PART V. CONSUMER PROTECTION AND THE CFPB

5.1. The Consumer Financial Protection Bureau

Judicial decisions addressing the constitutionality of the CFPB structure:

Recent statements of Acting Director Mulvaney:

5.2. Mortgages

5.3. Consumer Financial Products and Services

NYT - The Student Debt Problem Is Worse Than We Imagined - August 2018 [external]

5.4. Comparing Consumer Protection Models across Sectors

 

HLS Case Studies for Part V

This set of case studies could be used in connection with Chatper 5.1 to explore cost-benefit analysis at the CFPB.

HLS Case Study - Consumer Financial Protection Bureau - Responding to the PHH Litigation - August 2017 -- This case study could be used in connection with Chapter 5.1 to explore the immediate aftermath of the D.C. Circuit's initial decision in the PHH v. CFPB litigation.

 

PART VI. FINANCIAL CONGLOMERATES

6.1. Regulation of Holding Companies

Davis Polk Client Memo, Beyond FinTech: The OCC’s Special Purpose National Bank Charter (Dec. 9, 2017)

FSOC Proposed Decision on ZB, N.A. Appeal (Jul. 17, 2018)

GE De-Designation Decision from the FSOC

6.2. Regulation of Bank Market Structure and Consolidation

6.3. Regulating Systemic Risk

Treasury Report on Financial Stability Oversight Council Designations (Nov. 17. 2017)

Randal Quarles, “The U.S. Economy after the Global Financial Crisis” (Feb. 18, 2018)

Metlife, Inc. v. FSOC, 177 F. Supp.3d 219 (D.D.C. 2016) (overturning Metlife’s designation as a systemically important nonbank financial company)

For more information on FSOC designations and recissions, see https://www.treasury.gov/initiatives/fsoc/designations/Pages/default.aspx

Materials related to the ECRRCP Act of 2018:

Randal Quarles, “Getting It Right: Factors for Tailoring Supervision and Regulation of Large Financial Institutions” (Jul. 18, 2018)

6.4. Foreign Banks in the United States and U.S. Banks Abroad

 

HLS Case Studies for Part VI

HLS Case Study - Wal-Mart and Banking - August 2017 -- Case study could be used in connection with Chapter 6.1 to explore the arguments for and against the separation of banking and commerce.

 

PART VII. PAYMENT SYSTEMS

7.1. Introduction to Payment Systems

7.2. Examining Critical Issues in Payment Systems

Ohio v. American Express Co., 138 S.Ct. 2274 (June 25, 2018)

Jesner et al. v. Arab Bank, 138 S.Ct. 1386 (Apr. 24, 2018)

HLS Case Studies for Part VII

HLS Case Study - Bank Secrecy - August 2017 -- Case study could be used in connection with Chapter 7.2 to explore the potential use of blockchain technology to improve BSA compliance.

 

PART VIII. CORPORATE GOVERNANCE, SUPERVISION, AND ENFORCEMENT

8.1. Corporate Governance

8.2. Supervision and Enforcement

Lucia v. SEC, 138 S. Ct. 2044, 2050 (June 21, 2018) – Supreme Court decision addressing the constitutionality of the SEC’s appointment of ALJs.

Case Studies for Part VIII

HLS Case Study - Wells Fargo Corporate Governance - October 2017 -- Case study could be used in connection with Chapters 8.1 and 8.2 to explore the appropriateness of the Fed's bringing formal enforcement actions against the directors of Wells Fargo.

 

PART IX. LENDER OF LAST RESORT AND RESOLUTION

9.1. Lender of Last Resort

9.2. Traditional Toolkit for Bank Failures

FDIC P&A Agreement on WaMu (Sep. 2008)

Resolution Planning Guidance for Eight Large, Complex U.S. Banking Organizations (Jul. 16, 2018)

9.3. After the Crisis: From Orderly Liquidation to Bail-In

Treasury Department Report on Orderly Liquidiation Authority and Bankruptcy Reform (Feb. 21, 2018)

John C. Dugan, Addressing the Fundamental Banking Policy Problem of Runs: Effectively Subordinating Large Amounts of Long-Term Debt to Short-Term Debt to End "Too-Big-To-Fail", 22 N.C. Banking Inst. 11 (2018).

HLS Case Studies for Part IX

HLS Case Study - Future of Affiliate Transaction Restrictions and Feds Emergency Intervention Authority - October 2017 -- Case study could be used in connection with Chapter 9.3 to explore the authority of federal authorities to intervene in future financial emergencies.  Also useful for exploring the authority of federal authorities to waive restrictions of sections 23A and 23B, discussed earlier in Chapter 2.3.

 

PART X. MUTUAL FUNDS AND OTHER INVESTMENT VEHICLES

10.1. Introduction to Asset Management and Its Regulation

U.S. Department of the Treasury, A Financial System That Creates Economic Opportunities: Asset Management and Insurance (Oct. 2017) -- Treasury Department report with numerous recommendations related to asset management.

10.2. Mutual Funds: Fiduciary Duties and Structural Restraints

SEC Proposed Rule on Exchange-Traded Funds (Jun. 28, 2018)

10.3. Mutual Funds: Disclosure and Its Limitations

10.4. The Regulation of Retirement Savings

John Oliver, "Retirement Plans" - Last Week Tonight 

10.5. The Regulation of Hedge Funds and Other Private Funds

 

HLS Case Studies for Part X

HLS Case Study - Closed-End Fund Regulation - August 2017 -- Case study could be used in connection with Chapter 10.3 to explore the value of disclosures with respect to closed-end funds.

 

PART XI. DERIVATIVES AND RATE MARKETS

11.1. Overview of Derivatives

11.2. Derivatives: Market Infrastructure

11.3. Derivatives: Business Conduct and Market Integrity

HLS Case Studies for Part XI

 

 

PART XII. SHADOW BANKING

12.1. Securitization

12.2. Mortgage Markets and the Government-Sponsored Enterprises

Collins v. Mnuchin, 2018 WL 3430826 (5th Cir. Jul. 16, 2018)

Davis Polk Blog Post, “Fifth Circuit Holds That FHFA is Unconstitutionally Structured” (Jul. 18, 2018)

12.3. Money Market Funds

12.4. Short-Term Wholesale Funding

HLS Case Studies for Part XII

HLS Case Study - Asset Securitization after Madden - August 2017 -- Case study could be used in connection with Chapter 12.1 to explore the implications of the Madden decision on asset securitization.