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spring 2023 archive

Week 15: Class on Monday April 24
This will be our last class of the semester and we will use it as a review session.

I plan to discuss the Spring 2022 exam.

We can also discuss any questions you may have.

I will be available to answer questions by email/zoom until the evening of April 27th at 9pm (although the zoom option is until about 5pm that day).

Have a good weekend.

Week 14

Class on Monday April 17th I have decided to focus on Brexit and relations with the EU post-Brexit on Monday. This allows us to think about the idea of regulatory equivalence, an idea that came up in the FinTech context. I am assigning:
Christy Ann Petit & Thorsten Beck, Recent trends in UK financial sector regulation and possible implications for the EU, including its approach to equivalence (Feb. 2023)

Optional Additional Reading: Scott James, Hussein Kassim & Thomas Warren, From Big Bang to Brexit: The City of London and the Discursive Power of Finance, 70(3) Political Studies 719 (2022)

Class on Wednesday April 19th
We have seen through the semester examples of courts taking note of the interests of other jurisdictions, and examples of attempts at harmonization of principles of financial regulation in some different areas. We have also seen in the context of Fintech that there are times when states see themselves as competing with other states and times when they cooperate. We also saw some similar issues relating to enforcement and compliance. Sometimes enforcement action is carried out by 1 state and at other times there is cooperation in enforcement. In thinking about EU initiatives and the EU and UK after Brexit we can also see the issues of competition and cooperation, and the concept of equivalence is useful in this context.
Having noticed a number of examples of the FSB and other actors noting risks to financial stability and arguing for concerted action by the global community to address financial stability I want to finish up by focusing on a short paper from the IMF that looks at the future of multilateralism:
Aiyar et al, Geoeconomic Fragmentation and the Future of Multilateralism, IMF Staff Discussion Notes No. 2023/001 (Jan. 15, 2023).
At the end of this class session I will set aside some time for course evaluation.

Week 13: More Fintech
Class on Monday April 10: EU Regulation of Crypto-Assets
Tina van der Linden & Tina Shirazi, Markets in crypto-assets regulation: Does it provide legal certainty and increase adoption of crypto-assets? 9 Financial Innovation Article number: 22 (2023)
European Parliament Briefing, Markets in crypto-assets (MiCA) (Nov. 29, 2022)
EU Commission, Proposal for a Regulation on on Markets in Crypto-assets, COM/2020/593 final (Sep. 24, 2020) pp 1-14.

Class on Wednesday April 12: AI, Regtech (and Suptech), Bigtech
Fengzi Li, Artificial Intelligence in Finance: A Change in Direction, BNY Mellon Insight (Sep. 2022)
El Bachir Boukherouaa et al, Powering the Digital Economy: Opportunities and Risks of Artificial Intelligence in Finance, IMF Departmental Paper, DP/2021/024 (Oct 2021)
Parma Bains, Nobuyasu Sugimoto & Christopher Wilson, BigTech in Financial Services: Regulatory Approaches and Architecture, IMF FinTech Notes No 2022/002 (Jan. 24, 2022)

Some examples of regtech:
Sam Daley, 17 Regtech Companies Reshaping Finance (Jan. 25, 2023)
Deloitte, Regtech Universe 2023

April 7: on April 6, 2023, the Treasury Released a 2023 DeFi Illicit Finance Risk Assessment:

Actors like the Democratic People’s Republic of Korea (DPRK), cybercriminals, ransomware attackers, thieves, and scammers are using DeFi services to transfer and launder their illicit proceeds. They are able to exploit vulnerabilities, including the fact that many DeFi services that have anti-money laundering and countering the financing of terrorism (AML/CFT) obligations fail to implement them.

Week 12: Fintech again
Class on Monday April 3: The CFTC and the SEC
CFTC v Binance, Complaint (Mar. 27, 2023)
SEC v Terraform Labs, Complaint (Feb. 2023)

Class on Wednesday April 5: CBDCs
Bank of England and HM Treasury, The Digital Pound: a New Form of Money for Households and Businesses? Consultation Paper (Feb. 2023)
Appendino et al, Crypto Assets and CBDCs in Latin America and the Caribbean: Opportunities and Risks, IMF Working Paper (Feb. 2023)

Additional (not required) Reading:
Federal Reserve, Money and Payments: The U.S. Dollar in the Age of Digital Transformation (Jan. 2022)
BIS, Project mBridge: Connecting economies through CBDC (Nov. 2022)

Week 11
Class on Monday March 27:Defi (Decentralized Finance) (and financial stability)
This is the first Fintech topic we will look at, and provides a way of thinking about financial stability concerns in a context other than the current issues in banking.
Financial Stability Board, The Financial Stability Risks of Decentralised Finance (Feb. 16, 2023)
Francesca Carapella, Edward Dumas, Jacob Gerszten, Nathan Swem, Larry Wall, Decentralized Finance (DeFi): Transformative Potential & Associated Risks, Federal Reserve Finance and Economics Discussion Series (Aug. 2022)

An additional paper with lots of technical details if this is a particular area of interest for you (not required):
OECD, Why Decentralised Finance (DeFi) Matters and the Policy Implications (2022)

Class on Wednesday March 29 Innovation and regulation
Financial Stability Board, International Regulation of Crypto-asset Activities. A proposed framework – questions for consultation (Nov. 2022)
Cristie L. Ford & Quinn Ashkenazy, The Legal Innovation Sandbox (September 12, 2022). American Journal of Comparative Law (Forthcoming 2023), Available at SSRN: https://ssrn.com/abstract=4099190 or http://dx.doi.org/10.2139/ssrn.4099190

Week 10 (after Spring Break)
Here are the readings for the week after Spring Break. We will start with sanctions and then move on to think about issues relating to compliance.
Noah Berman and Anshu Siripurapu, One Year of War in Ukraine: Are Sanctions Against Russia Making a Difference?, Council on Foreign Relations (Feb. 21, 2023)
International Finance Materials 2023: Sanctions 2
The Treasury 2021 Sanctions Review
US v David Rivera (Indictment)
Unicredit Bank Non-Prosecution Agreement (Apr. 15, 2019)

As it relates to issues of compliance (discussing how firms can set up governance to achieve regulatory objectives) I will also discuss (on Wednesday)
Financial Conduct Authority, Finance for positive sustainable change, DP 23/1 (Feb. 2023).

Week 8
We will focus on economic sanctions measures. Next week we will look at some of the more general issues in this area and then after Spring Break we will look at some specific sanctions measures which will give us a better sense of some of the difficulties of compliance.
The reading materials for next week are International Finance Materials 2023 Chapter 4a: Sanctions 1

Class on Monday March 6 Please read to page 28.

Class on Wednesday March 8 Please read to the end of the document.

Here is a link to information on eligible collateral in the Federal Reserve System (a question that came up in class on March 1).

As I mentioned in class on February 27, the FATF suspended Russia’s membership because of Russian actions in Ukraine: ““The Russian Federation’s actions unacceptably run counter to the FATF core principles aiming to promote security, safety, and the integrity of the global financial system. They also represent a gross violation of the commitment to international cooperation and mutual respect upon which FATF Members have agreed to implement and support the FATF Standards. Considering the above, the FATF has decided to suspend the membership of the Russian Federation. The Russian Federation remains accountable for its obligation to implement the FATF Standards. The Russian Federation must continue to meet its financial obligations.”

Week 7
Class on Monday February 27
On Monday we will begin with the Libyan Arab Foreign Bank case in International Finance Materials 2023 Chapter 3c: Sovereigns 3.

The next topic for the class is Issues in Transnational Financial Regulation and these are the relevant reading materials:
Federal Reserve Policy on Payment System Risk (as amended Feb. 2023)(Note Principles for FMIs in the Appendix)
Hilary J. Allen, Payments Failure, 62 Boston College Law Review 453 (2021)
Tanai Khiaonarong & Terry Goh, Fintech and Payments Regulation: Analytical Framework, IMF Working Paper WP/20/75 (May 29, 2020)
Alina Iancu et al, Reserve Currencies in an Evolving International Monetary System, IMF Strategy, Policy, & Review Department & Statistics Department Paper 20/02 (Nov. 17, 2020)
Carl White, Fed Adopts Guidelines for Master Account Access to Its Payment Services, Federal Reserve Bank of St Louis Blog (Sep. 6. 2022).

Please read the first of these documents for Monday’s class.

Class on Wednesday March 1 Please read the rest of the Transnational Financial Regulation documents for class on Wednesday.

As I mentioned in class on February 27, the FATF suspended Russia’s membership because of Russian actions in Ukraine: ““The Russian Federation’s actions unacceptably run counter to the FATF core principles aiming to promote security, safety, and the integrity of the global financial system. They also represent a gross violation of the commitment to international cooperation and mutual respect upon which FATF Members have agreed to implement and support the FATF Standards. Considering the above, the FATF has decided to suspend the membership of the Russian Federation. The Russian Federation remains accountable for its obligation to implement the FATF Standards. The Russian Federation must continue to meet its financial obligations.”

Week 6
Class on Monday February 20
We will spend some time considering Collective Action Clauses and in particular will focus on
ICMA, New York and English Law Standard CACs, Pari Passu and Creditor Engagement Provisions (May 2015)
ICMA, Guidance and Explanatory Note relating to new specimen clauses for inclusion in Commercial Loan Agreements for Sovereign Borrowers (Nov. 2022)

I will also refer to the materials in the appendix to International Finance Materials 2023 Chapter 3b: Sovereigns 2

I think that will likely not take the entire class so I am also asking you to read pages 1-19 in International Finance Materials 2023 Chapter 3c: Sovereigns 3.

Class on Wednesday February 22 Please read pages 19-80 in Chapter 3c.

Week 5
Class on Monday February 13: We will finish discussing the material in International Finance Materials 2023 Chapter 3a: Sovereigns 1.

Please also read pages 1-21 of International Finance Materials 2023 Chapter 3b: Sovereigns 2 for Monday’s class.

For Class on Wednesday February 15 please read the rest of Chapter 3b and also:

ICMA, New York and English Law Standard CACs, Pari Passu and Creditor Engagement Provisions (May 2015)
ICMA, Guidance and Explanatory Note relating to new specimen clauses for inclusion in Commercial Loan Agreements for Sovereign Borrowers (Nov. 2022)

Week 4
Class on Monday February 6: We will finish discussing International Finance 2023 Chapter 2: Securities, starting with the Toshiba case. If we have time we can begin to think about sovereign debt.

Here is International Finance Materials 2023 Chapter 3a: Sovereigns 1. Please read pages 1-20 for Monday.

Class on Wednesday February 8: Please read pages 21-73 of Chapter 3a.

Week 3
Class on Monday January 30: We will continue looking at issues raised in International Finance Materials 2023 Chapter 1: Introduction beginning with remittance transactions and regulation, and then thinking about competition vs co-ordination or harmonization of regulation. We will then begin to look at issues involving transnational investment in securities.

Here is the next Chapter of materials for class: International Finance 2023 Chapter 2: Securities. I am not sure how far we will get with this material on Monday but recommend reading to page 33 for Monday’s class.

Class on Wednesday February 1: Please read the rest of Chapter 2 for Wednesday’s class.

Week 2
I have moved the week 1 assignment to the archive page. Here are the readings for next week. Have a good rest of the week and weekend!

Class on Monday January 23: Readings on Foreign Corrupt Practices Act
Mike Koehler, The Story of the Foreign Corrupt Practices Act, 73 Ohio State Law Journal 929-1013 (2012)
Mike Koehler, Has the FCPA Been Successful in Achieving Its Objectives?, 2019 University of Illinois Law Review 1267
SEC Cease and Desist Order against Credit Suisse (Oct. 2021)
SEC Cease and Desist Order against VTB (Oct. 2021)

Class on Wednesday January 25:International Finance Materials 2023 Chapter 1: Introduction

Week 1: Class on January 18
In the first class of the semester we will focus on issues relating to corruption, which often involves the investment of money in a country different from the one where the corrupt activity occurs.
Assigned reading:
The White House, United States Strategy on Countering Corruption (Dec. 2021)
FinCEN, Advisory on Kleptocracy and Foreign Public Corruption (Apr. 14, 2022)
John Heathershaw, Alexander Cooley, Tom Mayne, Casey Michel, Tena Prelec, Jason Sharman and Ricardo Soares de Oliveira, The UK’s Kleptocracy Problem: How Servicing Post-soviet Elites Weakens the Rule of Law, Chatham House Research Paper (Dec. 2021)

Additional resources:
Todd D Robinson, Recognizing the 2022 Anti-Corruption Champions (Dec. 9, 2022)
OECD, Anti-corruption Compliance in Times of Crisis (Dec. 14, 2022)

Here are the Class Policies