Cornell Law Review Volume 97 Issue 5

Credit Card Pricing: The Card Act and Beyond

We take a fresh look at the concerns about credit card pricing and  empirically investigate whether the Credit CARD Act of 2009 (the CARD  Act) has been successful in addressing those concerns. The rational choice theory of credit card pricing, which posits that issuers use back-end fees to adjust the price of credit to reflect […]

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The Political Economy of Dodd-Frank: Why Financial Reform Tends to Be Frustrated and Systemic Risk Perpetuated

A good crisis should never go to waste. In the world of financial regulation, experience has shown—since at least the time of the South Sea Bubble three hundred years ago—that only after a catastrophic market collapse can legislators and regulators overcome the resistance of the financial community and adopt comprehensive “reform” legislation. U.S. financial history both confirms and […]

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The Limits of “Name-and-Shame” in International Financial Regulation

The fiscal crisis of 2008 revealed manifold weaknesses in national financial regulatory frameworks. Many jurisdictions have made legislative efforts to address these flaws, with varying degrees of promise and success. The United States has been through this process before, most recently in the wake of the savings and loan crisis of the 1980s, and before that, in the aftermath of […]

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The Consumer Financial Protection Bureau: Financial Regulation for the 21st Century

After existing regulatory systems failed to prevent the recent financial crisis, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, a sweeping reform designed to alleviate the crisis and prevent its recurrence. Out of this Act, the Consumer Financial Protection Bureau was born. This new agency is charged with making markets for consumer financial products and services work […]

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Uncertainty, Dangerous Optimism, and Speculation: An Inquiry into Some Limits of Democratic Governance

People are often optimistic. Nearly fifty percent of marriages end in divorce, but one survey found that 100 percent of individuals planning to get married believed they would never get divorced. Most people think they drive better than the average driver, and at one university, ninety-four percent of professors placed themselves in the top fifty percent in terms of teaching […]

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Dodd-Frank’s Say on Pay: Will It Lead to a Greater Role for Shareholders in Corporate Governance?

“Say on pay” gives shareholders an advisory vote on a company’s pay practices for its top executives. Beginning in 2011, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) mandated such votes at public companies. The first year of say on pay under the new legislation reflects a change in the dialogue and give-and-take in the shareholder–management […]

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The Goldilocks Approach: Financial Risk and Staged Regulation

Financial firms engage in a wide range of private conduct. New rules that address financial risk can regulate elements of that conduct, but not all conduct or all the factors that affect conduct. There is, therefore, a real concern that new regulation will have unanticipated consequences, particularly in a system as complex as the financial markets. The result […]

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