Does Mandatory Shareholder Voting Prevent Bad Acquisitions?

Paper studies how much power shareholders should delegate to the board of directors.

Wednesday, July 23, 2014

In the United Kingdom, corporate acquisition deals larger than 25% in relative size are subject to a mandatory shareholder vote, while in most of continental Europe there is no vote, and in Delaware voting is largely discretionary. In a new paper by Marco Becht, Professor of Corporate Governance at the Université libre de Bruxelles; Andrea Polo of the Department of Economics and Business at the Universitat Pompeu Fabra and Barcelona GSE; and Stefano Rossi of the Department of Finance ...
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Should Pension Funds Police Corporate Governance?

Tuesday, July 22, 2014

It is often said that good corporate governance helps reduce a company’s investment risk, ensures the effective deployment of shareholder capital, and ultimately contributes to the long-term performance of public companies. . . On the other hand, the absence of a robust corporate governance infrastructure can lead to poor decisions resulting in bad outcomes for the company and its shareholders.  SEC Commissioner Luis A. Aguilar has long been a champion of empowering ...
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SEC Adopts Final Cross-Border Security-Based Swap Rules

Thursday, July 10, 2014

On June 25, 2014, the Securities and Exchange Commission finalized new rules and interpretive guidance addressing the cross-border application of a security-based swap regulatory framework called for under the Dodd-Frank Act.  These final rules are the first of a series of rules and guidance on cross-border security-based swap activities for market participants.  According to the SEC, these new rules will be key to finalizing the remaining outstanding proposals on security-based ...
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BIS Sees the Financial System at a Crossroads

BIS's 84th Annual Report Sees Banks Shying from Risk While Asset Managers fill the Gap

Monday, June 30, 2014

In their 84th Annual Report, the Bank for International Settlements examines the current state of global financial affairs and highlights some trends it sees emerging in the financial framework.  While noting that the overall financial system has has gained some strength since the crisis, banks remain in a rebuilding phase, concentrating  their business models towards traditional banking. Despite their apparent recovery, BIS warns that banks face lingering balance sheet ...
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Italy’s Mediobanca Equity Sell-off and Privatization Spark Renaissance in Corporate Governance

Sunday, June 15, 2014

The Economist reports that Mediobanca, an Italian investment bank formed in 1946 assist in the reconstruction of Italian industry, has commenced a planned sell-off of $2.2 billion in equity holdings as part of an effort to refocus the firm on its core mission of providing medium-term financing in the Italian sector. Mediobanca’s sales of these shares as part of its unwinding of webs of cross-shareholdings and pacts among big shareholders, as well as the privatization of Fincantieri ...
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Blackrock Pushes Back on FSOC Concerns About Securities Lending

Friday, June 06, 2014

In a May 29, 2014 white paper, Blackrock responded strongly to the Financial Stability Oversight Council’s (FSOC) 2014 Annual Report that raised concerns about asset managers and securities lending. In particular, Blackrock’s paper takes issue with FSOC’s assertion that indemnity provided to lending clients by asset managers acting as securities lending agents created extra risk because asset managers do not face the same capital and liquidity requirements as their bank ...
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New York Fed Publishes A Primer on the GCF Repo® Service

Quantifying to what extent dealers pursue various strategies trading GCF Repo.

Monday, June 02, 2014

The Staff of the Federal Reserve Bank of New York has published a "A Primer on the GCF Repo® Service," the overall goal of which is to to quantify to what extent dealers pursue various strategies trading GCF Repo.
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ICGN Proposes Revised Corporate Governance Principles

Wednesday, May 28, 2014

On March 28, 2014, the International Corporate Governance Network (ICGN), an investor-led organization of governance professionals interested in international corporate governance practices, published its a proposed draft revision to its Global Governance Principles. The draft principles take into account the ICGN’s 2009 Global Corporate Governance Principles and other ICGN guidance, together with recent changes in corporate governance regulation and practice. This proposed revision is ...
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FSOC's 2014 Annual Report Addresses Some Securities Lending and Repo Risks

Wednesday, May 21, 2014

The US Financial Stability Oversight Council has published its 2014 Annual Report which highlights, among other things, the activities of the Council, significant financial market and regulatory developments, an assessment of those developments on the stability of the financial system, and potential emerging threats to the financial stability of the United States. The report highlights two forward-looking risks specifically in securities finance and collateral management, and remarks on ...
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Congress Raises More Concerns Regarding SIFI Designation

Congress Calls into Question FSB's Role in SIFI Designation

Tuesday, May 20, 2014

Congress has once again raised concerns about the Fed's plans for non-bank SIFIS.  In a May 9, 2014 letter to Treasury Secretary Jack Lew, Fed Chair Yellen, and SEC Chair Mary Jo White, members of the US House of Representatives Committee on Financial Services questioned the role of the Financial Stability Board, an international body which is an unincorporated Swiss association with no authority or oversight under US law, in the process for designation of G-SIFIs. The authors of letter ...
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