Why Your Bank May Cut You Loose

Everybody needs to make money, but CFOs may chafe if their bank puts its own profitability needs first. Here’s how to obtain the banking services you need with reasonable terms and conditions.

Compromising Positions

Will credit derivatives encourage more lending, or will they harm the interests of borrowers?

A Non-Random Walk Through Financial Innovation: Four Titans Explain How It Occurs

In 1986 Merton Miller, a Chicago economist and an eventual Nobel laureate in economic sciences, asked if any 20-year period in history had resulted in a tenth as much financial innovation as the previous two-decade span. His own answer was a resounding ‘no’. He then went on to argue that innovation was flagging. Four titans from that period addressed Miller’s question at the Milken Institute’s … [ Read more ]

Asset-Based Financing Gains Ground

CFOs in search of working capital are borrowing on assets — and discovering that doing so can offer more flexibility than bank financing.

Unite And Conquer

Financial-services firms have had lots of practice at integration; here’s what some of the biggest have learned from their mergers.

Stock Option Repricing: Employees Benefit But What about Investors?

When the stock price of computer networking equipment maker Brocade Communications Systems skidded in late 2002, the pain was widespread. But it did not fall equally on all investors. Like other companies in similar situations, Brocade protected one class of investors – employees with stock options whose strike, or exercise price, had fallen below the market value – by simply issuing new stock options at … [ Read more ]

Regulatory Challenges Facing U.S. Equity Markets

The issues that confront the SEC and the U.S. equity markets are highly complex. While the SEC has not set a timetable to resolve these issues, it is clear that speedy resolution is imperative for the survival of many markets.

How Well Do 401(k) Plans Work, and Who Benefits Most From Them?

When Enron collapsed a year ago, thousands of employees’ retirement savings were wiped out, sparking quick calls for reform of 401(k) plans. Some changes were put in place earlier this year, others are still being debated in Congress. But now that the smoke of corporate scandals has begun to clear, do problems with 401(k)s still appear as bad as they did last winter? Should the … [ Read more ]

Other People’s Money

To encourage fund managers to act solely in the interests of shareholders, activists want their proxy votes disclosed.

Have Banks, After 25 Years, Made Peace with the Community Reinvestment Act?

When Congress enacted the Community Reinvestment Act of 1977 (CRA), many financial institutions bristled at the thought of additional regulatory oversight, particularly when it would require the industry to lend to low-and moderate-income neighborhoods. In the 25 years since its enactment, does the CRA still inspire resistance from banks? Given its turbulent beginning, how effective has the CRA been and how can it be improved? … [ Read more ]

Better Than the Alternatives

Compared with the previous peak of global capital, the amount of money flowing to poorer countries today is already small. Maurice Obstfeld and Alan Taylor, two economists, point out that less-developed countries’ share of total global debt is at an all-time low. In 1900, these countries accounted for 33% of the total; in the 1990s, the figure was down to 11%. In 1913, the countries … [ Read more ]

Bubble Trouble – And What Policymakers Should Do About It

Article takes a look at “efficient markets” and “behavioural finance” theories and examines their relevance to financial market bubbles.

The Regulator Who Isn’t There

Does a global financial system need a global regulator?

Crisis? What Crisis?

The financial system has coped remarkably well with a horrendous couple of years.

Operational Risk Poses Challenges to Financial Institutions and Regulators

In the aftermath of September 11’s terrorist atrocities, it will surprise few people to learn that operational risk has been a hot topic of debate among financial institutions and regulators. Unlike risks of borrowers defaulting on debt or markets collapsing, operational risk management deals with internal system failures (such as a rogue trader) or external events (such as terrorist attacks). A conference organized by Wharton’s … [ Read more ]

Commercial Paper Chase

If banks have to come clean about their off-balance-sheet leverage, get ready to pay more for money.

SBA Loans: Myths and Realities

By understanding what the Small Business Adminstration does and doesn’t do, business owners can be in a better position to take advantage of this often misunderstood government program.

Attention Shoppers: Try Valuing This

Acquiring bankrupt assets may seem like a smart move. But valuing distressed intangibles can be a tricky business.

New Payment Methods Give Old-fashioned Checks and Credit Cards a Run for Their Money

Anyone with a Starbucks “stored value” card knows how easy it is these days to pay for his or her café latte. But the stored value card – like its higher-tech cousin the smart card, where value is stored on the card’s computer chip rather than on a server – is just one of the emerging technologies now gaining momentum while paper check usage is … [ Read more ]