Volume 2019, No. 1

PDF link Table of Contents


PDF link Systematic Regulation of Systemic Risk

by Steven L. Schwarcz

A decade after the financial crisis, regulators worry that the regulation enacted to help stabilize the financial system may be insufficient to prevent another crisis. Examining that regulation with the benefit of hindsight, this Article finds that much has been accomplished but much remains to be done. Most of the existing regulation is ad hoc, providing “tools” rather than a coherent framework. It also is unduly entity-based, largely ignoring markets and other critical elements of the financial system. Furthermore, some of that entity-based regulation is punitive and misguided, responding to the human intuition to assign blame for harm. Financial stability requires a more systematic regulatory framework. The Article builds that framework on normative foundations, recognizing that the fundamental reason to regulate finance should be to correct market failures. Regulation intended to stabilize the financial system should focus on correcting market failures that could trigger and transmit systemic risk—the risk that financial instability will significantly impair the real economy. The Article attempts to identify and better understand those triggers and transmission mechanisms, and their underlying market failures. Finally, it analyzes how regulation could help to correct those market failures, revealing important new insights into regulatory design.

PDF link What Makes the Death Penalty Arbitrary? (And Does It Matter If It Is?)

by Chad Flanders

A common objection to the death penalty is that it is “arbitrarily” imposed. Indeed, the Supreme Court in the 1970s held the death penalty as it was then administered to be unconstitutional precisely because the states seemed to have no clear standards for who got death and who did not. In the most famous passage in that opinion (Furman v. Georgia), Justice Stewart wrote that the death penalty was “cruel and unusual” in the same way that being “struck by lightning” was “cruel and unusual.”


PDF link Don’t Whistle While You Work: Wisconsin’s Vanishing Protections for Public Employee Whistleblowers

by Corey Triggs

Public employee whistleblowers are widely recognized as essential to the fair and efficient provision of government services. As a result, the number of statutory schemes designed to shelter civil servants from retaliation for whistleblower disclosures has increased dramatically in recent decades. Every U.S. state now has such a law on the books. Wisconsin, however, has an especially weak protective system. Its public employee whistleblower law, as written, covers too little and affords scant remedies. What’s more, Wisconsin courts have reached beyond this already narrow text to unreasonably further restrict the law’s application, to the point it retains little relevance as remedy. At present, Wisconsin law neither incentivizes blowing the whistle nor protects those courageous enough to do so.