Talk to address common agency problem in bank regulations

September 25, 2017

Lincoln, Neb. — The Clayton K. Yeutter Institute of International Trade and Finance at the University of Nebraska–Lincoln will welcome Yesha Yadav, professor of law at Vanderbilt University, to campus on Sept. 29 for a talk entitled “The Common Agency Problem in Bank Regulations.”

The free lecture will be from 12 to 1 p.m. at the College of Law’s Hamann Auditorium located at 1875 North 42nd Street, Lincoln, Neb.

Following the financial crisis, regulation requires banks to fund themselves more fully by issuing equity. When a bank fails, deep equity reserves provide a cushion of capital to payoff depositors and creditors and stop a bank’s collapse from causing wider disruption. In requiring banks to build their equity base, however, policymakers have failed to ask a critical question: who supplies this equity funding in practice? Yadav will respond to this question in her talk.

Yadav will describe the ownership of the 25 largest U.S. banks, to show that post-Crisis U.S. big bank ownership has come to be characterized by an increasing number of blockholders, those holding 5 percent or more in common equity. In addition, these block stakes are now held, in large part, by the same group of shareholders. Yadav will address whether these shareholders can provide the much needed buffer to protect the financial system against systemic collapse, or if they are too big and too important to fail.

Space for the event is limited. To RSVP, visit http://go.unl.edu/yeutterinstituteevent.

Questions about the event can be sent to ianr@unl.edu