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A Regulatory Design for Monetary Stability

dc.contributor.authorRicks, Morgan
dc.date.accessioned2015-06-02T16:55:01Z
dc.date.available2015-06-02T16:55:01Z
dc.date.issued2012
dc.identifier.citation65 Vand. L. Rev. 1289 (2012)en_US
dc.identifier.urihttp://hdl.handle.net/1803/7069
dc.descriptionarticle published in law reviewen_US
dc.description.abstractThis article proposes a unified regulatory approach to the issuance of “money-claims” – a generic term that refers to fixed-principal, very short-term IOUs, excluding trade credit. The instability of this market is arguably the central problem for financial regulatory policy. Yet our existing regulatory system lacks a coherent approach to this market. The article proposes a public-private partnership (PPP) regime, under which only licensed entities would be permitted to issue money-claims (subject to de minimis exceptions). Licensed money-claim issuers would be required to abide by portfolio restrictions and capital requirements. In addition, the government would explicitly insure licensed issuers’ outstanding money-claims in return for a fee. The article compares this PPP regime to the prevailing alternatives. In particular, it considers the likely efficacy of (i) risk-constraint regulation; (ii) conditional liquidity support (lender of last resort) facilities; and (iii) the new Orderly Liquidation Authority, a centerpiece of the recently enacted Dodd-Frank Act. The article identifies significant problems with each of these approaches. It concludes that, although the PPP system raises significant implementation challenges of its own, it compares favorably to the available alternatives.en_US
dc.format.extent1 PDF (76 pages)en_US
dc.format.mimetypeapplication/pdf
dc.language.isoen_USen_US
dc.publisherVanderbilt Law Reviewen_US
dc.subjectMoney claimsen_US
dc.subjectMonetary stabilityen_US
dc.subjectFinancial regulatory policyen_US
dc.subjectRisk-constraint regulationen_US
dc.subjectConditional liquidity support (lender of last resort) facilitiesen_US
dc.subjectOrderly Liquidation Authorityen_US
dc.subject.lcshMonetary policy -- United Statesen_US
dc.subject.lcshPublic-private sector cooperation -- United Statesen_US
dc.subject.lcshMoney market -- Government policy -- United Statesen_US
dc.subject.lcshFinancial institutions -- State supervision -- United Statesen_US
dc.titleA Regulatory Design for Monetary Stabilityen_US
dc.typeArticleen_US
dc.identifier.ssrn-urihttp://ssrn.com/abstract=1933890


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