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http://ssrn.com/abstract=1523712
 
 

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Have US Regulators Been Soft on Banks Over Structured Products? Yes


George M. Cohen


University of Virginia School of Law

David A. Dana


Northwestern University - School of Law

Susan P. Koniak


Boston University School of Law

Thomas Ross


affiliation not provided to SSRN

June 2, 2006

International Finance Law Review, Vol. 13, July 2006

Abstract:     
This article was originally written as a comment on the proposed Interagency Statement on Sound Practices Concerning Elevated Risk Complex Structured Finance Activities, 71 Fed. Reg. 28329 (May 16, 2006). The statement is Interagency Statement is a joint effort of all the federal agencies having a role in the regulation of financial institutions, including the SEC, FDIC, Federal Reserve, OTS, and the Comptroller of the Currency. The comment argues that the proposed Interagency Statement is a mistake and should be withdrawn because in its current form, it can be (and we think will be) read to encourage and condone illegal conduct. The proposed Interagency Statement gives financial institutions too much discretion to determine which “complex structured finance transactions” (CSFT) pose the problem of “elevated risk.” More troubling, the Statement provides a list of transaction characteristics that “may . . . warrant additional scrutiny” without recognizing or emphasizing that all of the characteristics are strongly indicative of potential fraud which in our view invites reckless participation in illegal conduct, either as a primary wrongdoer or as an aider and abetter.

Number of Pages in PDF File: 7

Keywords: structured finance, banks, financial regulation, aiding and abetting, corporate fraud, Enron, Central Bank

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Date posted: December 18, 2009  

Suggested Citation

Cohen, George M. and Dana, David A. and Koniak, Susan P. and Ross, Thomas, Have US Regulators Been Soft on Banks Over Structured Products? Yes (June 2, 2006). International Finance Law Review, Vol. 13, July 2006. Available at SSRN: http://ssrn.com/abstract=1523712

Contact Information

George M. Cohen (Contact Author)
University of Virginia School of Law ( email )
580 Massie Road
Charlottesville, VA 22903
United States
(804) 924-3814 (Phone)
(804) 982-2079 (Fax)

David A. Dana
Northwestern University - School of Law ( email )
375 E. Chicago Ave
Unit 1505
Chicago, IL 60611
United States
312-503-0240 (Phone)
312-503-2035 (Fax)
Susan P. Koniak
Boston University School of Law ( email )
765 Commonwealth Avenue
Boston, MA 02215
United States
617-353-3136 (Phone)
617-353-3077 (Fax)
Thomas Ross
affiliation not provided to SSRN ( email )
Feedback to SSRN


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