Columbia Law School
(cv & bio)
Informed Trading and Its Regulation
Informed trading—trading on information not yet reflected in a stock’s price—drives the stock market. Such informational advantages can arise from astute analysis of varied pieces of public news, from just released public information, or from confidential information from inside a firm. We argue that these disparate types of trading are all better understood as part of the broader phenomenon of informed trading. Informed trading makes share prices more accurate, which enhances the allocation of capital, but also makes markets less liquid, which is costly to the efficiency of trade. Informed trading thus poses a fundamental trade-off in how it affects the two principal functions served by the stock market – information and liquidity.
This paper takes this basic tradeoff and develops an analytic framework, drawing on microstructure economics, modern finance theory, and the theory of the firm, to identify which types of informed trade are socially desirable, which are undesirable, and how best to regulate the market as a result. A key observation is that the time horizon of the information on which an informed trade is based – the latency before it would otherwise be reflected in price – crucially determines both the strategies of those trading on it and the social value of such trading.
Disaggregating traders and trading strategies in this way provides powerful new insights into how we can use regulation to deter socially undesirable forms of informed trading and promote socially desirable ones. The central contribution of this Article is the systematic application of the insights of our framework to illuminate a vast array of legal rules and doctrines—typically considered in isolation—in light of their effects on different kinds of informed trade. This includes Section 10(b) and insider trading, Section 16(b), Reg. NMS, mandatory disclosure rules, Reg. FD, so-called “Insider Trading 2.0”, and various stock exchange regulations. The Article thus lays the foundation for evaluating this array of rules, and based on this suggests a series of reforms to the current framework of securities law.
Online Alternative Finance: Building a Bridge between Research and Practitioners
The workshop aims to bring together scholars, industry leaders and regulators to have an open-minded discussion about our current state of knowledge about alternative finance. Researchers are increasingly using new forms of granular data to do an exciting research about alternative credit and equity markets, but many questions remain. Why are online finance providers emerging in the market? Will they make the financial system more democratic, responsible and fair? Will they lower the cost of financial intermediation? Or are they subject to the same agency problems as traditional intermediaries? What policies should the government adopt towards alternative finance sector? The workshop will provide a forum to discuss what data and research tools are needed to answer these questions.
9h: Welcome words. Olena Havrylchyk, Christophe Moussu & Marianne Verdier
9h10-10h: Keynote speech. “Mapping the landscape of crowdsourced finance” Raghavendra Rau, Cambridge Center for Alternative Finance Professor at the Judge Business School (University of Cambridge)
10h-10h30: Coffee break
10h30-12h15: Session 1. Financing of start-ups by equity/reward crowdfunding
Chair : Jérôme Glachant, Paris 1 Panthéon-Sorbonne
- Armin Schwienbacher, Professor of Finance, SKEMA
- Paul Belleflamme, Université Catholique de Louvain
- Jean-Michel Pailhon, FinTech Strategist & Lobbyist
Gilles Chemla, Imperial College London
14h-15h45: Session 2. How does P2P/marketplace lending create value?
Chair: Olena Havrylchyk, University of Lille
- Nicolas Lesur, Chairman of Financement Participatif France and CEO of Unilend
- Bruce Davis, co-founder of Zopa and Abundance; Bauman Institute at the University of Leeds
- Mark Davis, Bauman Institute at the University of Leeds
- Christoph Bertsch, Sveriges Riksbank
15h45-16h15: Coffee break
16h15-18h: Session 3. Government policy toward alternative finance providers
Chair: Marianne Verdier, University of Paris II
- Nathalie Beaudemoulin, head of the « Fintech and Innovation » at the ACPR
- Jean-Edouard Colliard, HEC
- Andrea Beltramello, DG FISMA, European Commission
Olivier Goy, Lendix
18h: Goodbye Cocktail
For more information please contact : firstname.lastname@example.org
Les workshop du Labex ReFi (ici)
EPFL Swiss Finance Institute
(CV & Bio here)
Why does fast loan growth predict poor performance for banks?
(Consult the paper)
79 avenue de la République 75011 Paris
le vendredi 23 mai 2017
12:00 – 1:30pm, Amphi 4310
For security reason, please register before the deadline.
Deadline : 22 mai 2017
NB. If you are prevented from coming, we would be obliged if you could inform us as soon as possible at email@example.com.
|Abstract : From 1973 to 2014, the common stock of U.S. banks with loan growth in the top quartile of banks over a three-year period significantly underperforms the common stock of banks with loan growth in the bottom quartile over the next three years. After the period of high growth, these banks have a lower return on assets and increase their loan loss reserves. The poorer performance of fast growing banks is not explained by merger activity. The evidence is consistent with banks, analysts, and investors being overoptimistic
about the risk of loans extended during bank-level periods of high loan growth
|(Past and coming events)|