Presidential Pendulums in Finance

43 Pages Posted: 28 Sep 2020

See all articles by Christina Parajon Skinner

Christina Parajon Skinner

University of Pennsylvania - The Wharton School

Date Written: July 24, 2020

Abstract

This Article explores the role of the executive branch, when driven by the President, in deregulating the financial system. While administrative law formally requires that financial regulation derive from notice-and-comment rulemaking, Presidents of the past two administrations have made novel use of an array of executive branch tools to effectively regulate and deregulate the financial services industry. This Article claims that such a shift away from formal administrative law rule-making processes toward presidentially driven deregulation has implications for the overall stability of the financial system. Specifically, this Article suggests that a President’s ability to unilaterally and informally deregulate (and, by extension, regulate) the financial sector can make regulatory cycles more frequent. In turn, the financial cycle may become shorter, steeper, and more severe. If Presidents push and pull on the financial sector, the pendulum of economic activity can swing sharper and faster than it has before—with accompanying re-percussions for businesses and households in the real economy.

Keywords: Financial regulation, Political-economy, Law and Macroeconomics

Suggested Citation

Skinner, Christina Parajon, Presidential Pendulums in Finance (July 24, 2020). Columbia Business Law Review, Vol. 2020, 2020, Available at SSRN: https://ssrn.com/abstract=3660027

Christina Parajon Skinner (Contact Author)

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

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