Pub Date : 2014-06-06DOI: 10.1093/ACPROF:OSO/9780199971541.003.0017
A. Rechtschaffen
This chapter begins with a synthesis of key themes, covering derivatives, debt instruments, and structured notes. It considers the case study Securities and Exchange Commission v. Goldman, Sachs & Co. & Fabrice Tourre. It then describes the Erlanger “cotton” bonds issued by the Confederate States of America to raise money during the Civil War. This is followed by discussions on range notes, internal leverage and market risk, and risks (interest rate risk, liquidity risk, reinvestment risk). The chapter concludes by describing the bulletin issued by the Office of the Comptroller of the Currency on May 22, 2002, to all national bank CEOs and all federal branches and agencies in regard to risky “yield-chasing” strategies that were returning to the markets.
{"title":"Synthesis and Conclusion","authors":"A. Rechtschaffen","doi":"10.1093/ACPROF:OSO/9780199971541.003.0017","DOIUrl":"https://doi.org/10.1093/ACPROF:OSO/9780199971541.003.0017","url":null,"abstract":"This chapter begins with a synthesis of key themes, covering derivatives, debt instruments, and structured notes. It considers the case study Securities and Exchange Commission v. Goldman, Sachs & Co. & Fabrice Tourre. It then describes the Erlanger “cotton” bonds issued by the Confederate States of America to raise money during the Civil War. This is followed by discussions on range notes, internal leverage and market risk, and risks (interest rate risk, liquidity risk, reinvestment risk). The chapter concludes by describing the bulletin issued by the Office of the Comptroller of the Currency on May 22, 2002, to all national bank CEOs and all federal branches and agencies in regard to risky “yield-chasing” strategies that were returning to the markets.","PeriodicalId":416217,"journal":{"name":"Capital Markets, Derivatives, and the Law","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-06-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129112766","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2014-06-06DOI: 10.1093/acprof:oso/9780199971541.003.0014
A. Rechtschaffen
The Commodity Futures Trading Commission (CFTC) is an independent agency with exclusive jurisdiction over futures trading in all commodities. The Commodity Exchange Act of 1936 (CEA) set forth the first federal regulatory framework for futures trading in agricultural commodities. In 1974, Congress passed the Commodity Futures Trading Commission Act, overhauling the CEA and establishing the CFTC. When President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law, the CFTC was a natural regulatory authority for the implementation of Dodd-Frank because of its historical role in regulating a remote corner of the derivatives market place (i.e., futures). This chapter discusses the role of the CFTC, its structure, disciplinary action, and its regulatory background.
{"title":"The History of the CFTC","authors":"A. Rechtschaffen","doi":"10.1093/acprof:oso/9780199971541.003.0014","DOIUrl":"https://doi.org/10.1093/acprof:oso/9780199971541.003.0014","url":null,"abstract":"The Commodity Futures Trading Commission (CFTC) is an independent agency with exclusive jurisdiction over futures trading in all commodities. The Commodity Exchange Act of 1936 (CEA) set forth the first federal regulatory framework for futures trading in agricultural commodities. In 1974, Congress passed the Commodity Futures Trading Commission Act, overhauling the CEA and establishing the CFTC. When President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law, the CFTC was a natural regulatory authority for the implementation of Dodd-Frank because of its historical role in regulating a remote corner of the derivatives market place (i.e., futures). This chapter discusses the role of the CFTC, its structure, disciplinary action, and its regulatory background.","PeriodicalId":416217,"journal":{"name":"Capital Markets, Derivatives, and the Law","volume":"49 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-06-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132409853","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2014-06-06DOI: 10.1093/acprof:oso/9780199971541.003.0003
A. Rechtschaffen
Capital markets provide enterprises with the opportunity to access capital to maintain their level of business activity. Therefore, ensuring the stability of the capital markets and preventing systemic failure are paramount concerns of the Federal Reserve and other financial market regulators. Access to capital markets is facilitated through the use of financial instruments that allow risk to be negotiated among market participants. When using financial instruments to achieve goals, a corporation must be aware of several considerations: the value of the asset underlying the financial instrument, duties or obligations the corporation owes to the other party to the contract, the implications and “worst case scenario” of the performance of the financial instrument, the risk of the transaction, and how the specific transaction can achieve the corporation's goals. This chapter discusses goal-oriented investing, achieving investment goals, and managing risk.
{"title":"Using Financial Instruments","authors":"A. Rechtschaffen","doi":"10.1093/acprof:oso/9780199971541.003.0003","DOIUrl":"https://doi.org/10.1093/acprof:oso/9780199971541.003.0003","url":null,"abstract":"Capital markets provide enterprises with the opportunity to access capital to maintain their level of business activity. Therefore, ensuring the stability of the capital markets and preventing systemic failure are paramount concerns of the Federal Reserve and other financial market regulators. Access to capital markets is facilitated through the use of financial instruments that allow risk to be negotiated among market participants. When using financial instruments to achieve goals, a corporation must be aware of several considerations: the value of the asset underlying the financial instrument, duties or obligations the corporation owes to the other party to the contract, the implications and “worst case scenario” of the performance of the financial instrument, the risk of the transaction, and how the specific transaction can achieve the corporation's goals. This chapter discusses goal-oriented investing, achieving investment goals, and managing risk.","PeriodicalId":416217,"journal":{"name":"Capital Markets, Derivatives, and the Law","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-06-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114778955","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2014-06-06DOI: 10.1093/acprof:oso/9780199971541.003.0002
A. Rechtschaffen
This chapter begins with a discussion on the capital markets. It compares primary and secondary markets, and long-term versus short-term marketplaces. This is followed by a case study on the auction rate securities (ARS) market. The second section discusses financial instruments, covering the types of financial instruments (equity-based financial instruments, debt-based financial instruments, derivatives, cryptocurrency and digital assets), and the distinction between debt and equity, and federal regulation. The final section deals with the role of the attorney. It discusses competent representation, the duty to advise the client, drafting financial instruments, regulatory compliance, and the issuance of opinion letters to clients regarding the implications of financial transactions.
{"title":"Financial Instruments and the Capital Markets","authors":"A. Rechtschaffen","doi":"10.1093/acprof:oso/9780199971541.003.0002","DOIUrl":"https://doi.org/10.1093/acprof:oso/9780199971541.003.0002","url":null,"abstract":"This chapter begins with a discussion on the capital markets. It compares primary and secondary markets, and long-term versus short-term marketplaces. This is followed by a case study on the auction rate securities (ARS) market. The second section discusses financial instruments, covering the types of financial instruments (equity-based financial instruments, debt-based financial instruments, derivatives, cryptocurrency and digital assets), and the distinction between debt and equity, and federal regulation. The final section deals with the role of the attorney. It discusses competent representation, the duty to advise the client, drafting financial instruments, regulatory compliance, and the issuance of opinion letters to clients regarding the implications of financial transactions.","PeriodicalId":416217,"journal":{"name":"Capital Markets, Derivatives, and the Law","volume":"71 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-06-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117190507","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2014-06-06DOI: 10.1093/acprof:oso/9780199971541.003.0006
A. Rechtschaffen
This chapter begins with a discussion of the purpose and goals of treasury securities. Treasury securities are a type of debt instrument providing limited credit risk. U.S. Treasury bills, notes, and bonds are issued by the Treasury Department and represent direct obligations of the U.S. government. Treasury securities are used to meet the needs of investors who wish to “loan” money to the federal government and in return receive a fixed or floating interest rate. The Treasury yield curve is a benchmark for fixed income securities across the spectrum of debt securities. The remainder of the chapter covers types of treasury securities, pricing, bond auctions and their effect on price, interest rates, and STRIPS (separate trading of registered interest and principal securities).
{"title":"United States Treasury Securities","authors":"A. Rechtschaffen","doi":"10.1093/acprof:oso/9780199971541.003.0006","DOIUrl":"https://doi.org/10.1093/acprof:oso/9780199971541.003.0006","url":null,"abstract":"This chapter begins with a discussion of the purpose and goals of treasury securities. Treasury securities are a type of debt instrument providing limited credit risk. U.S. Treasury bills, notes, and bonds are issued by the Treasury Department and represent direct obligations of the U.S. government. Treasury securities are used to meet the needs of investors who wish to “loan” money to the federal government and in return receive a fixed or floating interest rate. The Treasury yield curve is a benchmark for fixed income securities across the spectrum of debt securities. The remainder of the chapter covers types of treasury securities, pricing, bond auctions and their effect on price, interest rates, and STRIPS (separate trading of registered interest and principal securities).","PeriodicalId":416217,"journal":{"name":"Capital Markets, Derivatives, and the Law","volume":"30 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-06-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125535800","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2014-06-06DOI: 10.1093/ACPROF:OSO/9780199971541.003.0001
A. Rechtschaffen
This chapter discusses the origins of the 2007 financial crisis, subprime lending, and government-sponsored entities. It argues that the events driving financial markets to the precipice of collapse during the global financial meltdown gave rise to a regulatory framework that may have been a rational response to a market in free fall, but need to be reassessed in an era of recovery. In 2018, the U.S. economy may be, by many measures, viewed as wholly recovered from the economic impact of the crisis. The stock market is trading at record highs, having erased all the losses of the crisis period and then some. With this recovery, the Trump administration seeks to restrain the regulatory burden imposed during the crisis.
{"title":"The Financial Crisis","authors":"A. Rechtschaffen","doi":"10.1093/ACPROF:OSO/9780199971541.003.0001","DOIUrl":"https://doi.org/10.1093/ACPROF:OSO/9780199971541.003.0001","url":null,"abstract":"This chapter discusses the origins of the 2007 financial crisis, subprime lending, and government-sponsored entities. It argues that the events driving financial markets to the precipice of collapse during the global financial meltdown gave rise to a regulatory framework that may have been a rational response to a market in free fall, but need to be reassessed in an era of recovery. In 2018, the U.S. economy may be, by many measures, viewed as wholly recovered from the economic impact of the crisis. The stock market is trading at record highs, having erased all the losses of the crisis period and then some. With this recovery, the Trump administration seeks to restrain the regulatory burden imposed during the crisis.","PeriodicalId":416217,"journal":{"name":"Capital Markets, Derivatives, and the Law","volume":"54 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-06-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126495445","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2014-06-06DOI: 10.1093/ACPROF:OSO/9780199971541.003.0015
A. Rechtschaffen
This chapter looks at controlling risk, operational risk management, and executive protection. Directors and officers have a duty to participate in risk management. Internal protocols and procedures are a subset of operational risk management. When there is a breakdown in internal controls, directors and officers will be held accountable for operational failures contributing to trading losses. The chapter discusses the duty to manage risk, risk management for financial and non-financial institutions, quantifying financial risk, portfolio dynamics, directors' and officers' understanding of financial instruments, risk policy, reporting lines and audit techniques, information flow, ethical concerns, responsibility for risk management, business judgment rule, education at financial institutions, and disclosure under the Sarbanes-Oxley Act.
{"title":"Fiduciary Obligation to Manage Risk","authors":"A. Rechtschaffen","doi":"10.1093/ACPROF:OSO/9780199971541.003.0015","DOIUrl":"https://doi.org/10.1093/ACPROF:OSO/9780199971541.003.0015","url":null,"abstract":"This chapter looks at controlling risk, operational risk management, and executive protection. Directors and officers have a duty to participate in risk management. Internal protocols and procedures are a subset of operational risk management. When there is a breakdown in internal controls, directors and officers will be held accountable for operational failures contributing to trading losses. The chapter discusses the duty to manage risk, risk management for financial and non-financial institutions, quantifying financial risk, portfolio dynamics, directors' and officers' understanding of financial instruments, risk policy, reporting lines and audit techniques, information flow, ethical concerns, responsibility for risk management, business judgment rule, education at financial institutions, and disclosure under the Sarbanes-Oxley Act.","PeriodicalId":416217,"journal":{"name":"Capital Markets, Derivatives, and the Law","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-06-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126794290","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2014-06-06DOI: 10.1093/ACPROF:OSO/9780199971541.003.0009
A. Rechtschaffen
A swap is a bilateral over-the-counter derivatives contract in which two parties agree to exchange cash flows on a “notional amount” over a period of time. The notional amount is a reference amount upon which the payment formula is based. The parties exchange cash flows pursuant to an agreed-upon payment schedule, made up of one or more payment dates throughout the life of the contract. Cash flows are computed by applying the agreed-upon formula relating to each party's respective set of payments of the swap to a notional amount, that is, a hypothetical underlying value that does not necessarily itself change hands. This chapter discusses “plain vanilla” interest rate swaps, currency swaps, credit-default swaps, and the move toward regulatory reform.
{"title":"Types of Swaps","authors":"A. Rechtschaffen","doi":"10.1093/ACPROF:OSO/9780199971541.003.0009","DOIUrl":"https://doi.org/10.1093/ACPROF:OSO/9780199971541.003.0009","url":null,"abstract":"A swap is a bilateral over-the-counter derivatives contract in which two parties agree to exchange cash flows on a “notional amount” over a period of time. The notional amount is a reference amount upon which the payment formula is based. The parties exchange cash flows pursuant to an agreed-upon payment schedule, made up of one or more payment dates throughout the life of the contract. Cash flows are computed by applying the agreed-upon formula relating to each party's respective set of payments of the swap to a notional amount, that is, a hypothetical underlying value that does not necessarily itself change hands. This chapter discusses “plain vanilla” interest rate swaps, currency swaps, credit-default swaps, and the move toward regulatory reform.","PeriodicalId":416217,"journal":{"name":"Capital Markets, Derivatives, and the Law","volume":" 38","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-06-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114051498","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：