The Institutional Appetite for Quack Corporate Governance
This Article offers evidence that higher quality internal corporate governance is associated with higher levels of ownership by institutional investors. This finding is consistent with the idea that institutions have greater reason than individual investors to prefer well-governed firms, but surprising given the substantial empirical evidence that casts doubt on the efficacy of internal governance mechanisms. The study described in this Article also finds that higher quality external governance is associated with lower proportions of ownership by certain types of institutional investors, also a somewhat surprising result given available empirical evidence on the positive relationship between external governance and firm performance. After largely dismissing competing explanations for these findings, I conclude that institutional investors, as a group, generally prefer internal governance mechanisms over external governance mechanisms or have a higher tolerance for low-quality external governance than for low-quality internal governance. I argue that these preferences are reasonable and suggest that when debating the efficacy of governance mechanisms, the preferences of informed, sophisticated investors be afforded greater weight than is currently the case.
The Financial Crisis and the Path of Reform
In the lead-up to the financial crisis, the U.S. financial sector was overleveraged, short-funded, risky, and opaque. "Shadow banking" permitted institutions to avoid comprehensive supervision and capital requirements. Innovation outpaced the ability or willingness of privateand public-sector guardians to rein in risks. An asset bubble fed the system, until the market imploded in the fall of 2008. When the crisis hit, our society found itself illequipped to deal with the failure of leading financial firms. In the wake of the crisis, the Obama Administration proposed a set of reforms that were eventually embodied, in large part, in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. This Essay explores the Act's key reforms: the regulation of shadow banking, the creation of a consumer financial protection agency, and the development of a resolution authority to wind down failing financial firms. The Essay also analyzes the steps that must still occur domestically and internationally to lay afirm foundation for financial stability.
Body sculpturing.
Significant improvements in body contour can be accomplished by surgical procedures having reliable, predictable results. Similar to the modern sculptor of inanimate art forms, plastic surgeons have utilized new materials and devised new techniques to achieve aesthetic improvement of the face, trunk, and extremities. The goals of the surgical sculptor are perhaps more challenging than those of the pure artistic sculptor, not only because they must result in improved appearance but also because the surgeon is limited at all times by considerations of regional anatomy, the availability of viable tissue materials, and the safety of his patient.