UNL: The Common Agency Problem in Banking (Yeutter Institute Lecture)
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9/29/2017
When: Friday, September 29, 2017
12:00 PM - 1:00 PM CT
Where: UNL College of Law
1875 N 42nd St.
Lincoln, Nebraska  68503
United States

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Friday, September 29, 2017
12:00 - 12:30pm (Q&A to follow presentation)

UNL College of Law
McCollum Hall
1875 N. 42nd St.
Lincoln, Nebraska

"The Common Agency Problem in Banking" (Yeutter Institute Lecture) By Yesha Yadav

Following the Financial Crisis, regulation requires banks to fund themselves more fully by issuing equity. When a bank fails, deep equity reserves provide a cushion of capital to pay-off depositors and creditors and stop a bank's collapse from causing wider disruption. In requiring banks to build their equity base, however, policymakers have failed to ask a critical question: who supplies this equity funding in practice? In other words, which shareholders are assuming the default risk of large and complex banking firms and do these shareholders possess the resilience to absorb the risks they take on? This talk aims to respond to this question. It will describe the ownership of the 25 largest U.S. banks, to show that post-Crisis U.S. big bank ownership has come to characterized by an increasing number of blockholders, those holding 5% or more in common equity. In addition, these block stakes are now held, in large part, by the same group of shareholders: BlackRock, Vanguard, Fidelity, State Street Global Advisors and T. Rowe Price - managing funds that represent the retirement and other savings of a swath of Main Street homes and businesses. This talk will discuss what this ownership pattern means for financial regulation. Ultimately, the aim of this talk lies in addressing the political economy of financial failure to determine whether those shareholders who contract to bear the default risk of financial firms, in fact, possess the institutional capacity to do so. In other words, can they provide the much needed buffer to protect the financial system against systemic collapse - or are these shareholders themselves now too big and too important to fail?

Yesha Yadav's research interests lie in the area of financial and securities regulation, notably with respect to the evolving response of regulatory policy to innovations in financial engineering, market microstr Professor Yadav teaches Securities Regulation, Corporate Bankruptcy, International Financial Regulation and Market Microstructure. She was honored in 2015 as a winner of the Hall-Hartman Prize Outstanding Professor Award for excellence in teaching.ucture and globalization. Before joining Vanderbilt's law faculty in 2011, Professor Yadav worked as legal counsel with the World Bank in its finance, private-sector development and infrastructure unit, where she specialized in financial regulation and insolvency and creditor-debtor rights. Before joining the World Bank in 2009, she practiced from 2004-08 in the London and Paris offices of Clifford Chance, in the firm's financial regulation and derivatives group. As part of her work in the area of payments regulation, she was assigned to advise the European Payments Council on the establishment of the Single Euro Payments Area (SEPA), an initiative that seeks to integrate the domestic payments markets legally and operationally across the European Economic Area and Switzerland. Professor Yadav has also served as a senior research associate and interim research director to the Committee on Capital Markets Regulation. Since joining Vanderbilt, Professor Yadav has served as honorary advisor to India's Financial Services Law Reform Commission (FSLRC) and on the Atlantic Council's Task Force on Divergence and the Transatlantic Financial Reform and G-20 Agenda. She earned an M.A. in law and modern languages with First Class honors at the University of Cambridge, after which she earned an LL.M. at Harvard Law School, where she focused on financial and capital markets regulation, payment systems and terrorist financing.

Professor Yadav teaches Securities Regulation, Corporate Bankruptcy, International Financial Regulation and Market Microstructure. She was honored in 2015 as a winner of the Hall-Hartman Prize Outstanding Professor Award for excellence in teaching.

 

Approved for 0.5 CLE cr. hr.

For more information or to register, visit: http://law.unl.edu/alumni-cle/