Academic

End of Crisis Regulation Links

By Gordon Smith, Christine, Hurt, Vic Fleischer, Fred Tung, Lisa Fairfax, David Zaring

• The banks will, in fact, be permitted to get out of the TARP next week, the Times reports.  The good governance question turns on how much they will have to pay to do it; Steve Davidoff prices one bank's underpayment via Black-Scholes here.  Which raises the question: if the money is that cheap, is the reason everyone wants out exec comp?  And if so, what does that say about the quality of bank management?
• Regulatory reform is coming, but it might not be the rationalization that Henry Paulson and Paul Volcker asked for in separate reports last year.  Instead, every agency may survive except the OTS.  Slightly incoherent, but Larry Cunningham and I both expected that this would happen, and think there is a case to be made for disaggregated domestic regulation, a la, the race to the top.  Paper here.
• I am convinced, however, that better international cooperation would be a good thing, and contributed a chapter to the Committee on Capital Markets Regulation's reform proposal outlining why.  That is Hal Scott's, John Thornton's and Glenn Hubbard's shop, and you can read the proposal here, international is at the end, and everything else is well worth your consideration.

Full post as published by Conglomerate on June 02, 2009 (boomark / email).