Shadow banking is growing – and it’s a hidden risk to the stability of the financial system
Shadow banking is playing an increasing role in the financial system. Private equity firms, investment funds and mortgage finance companies all employ alternative lending strategies that are lightly regulated, and Canada’s Office of the Superintendent of Financial Institutions is concerned about how much exposure Canada’s banks have to this type of lender, who are collectively known as non-bank financial intermediaries.
Delve: Cashing in or Losing Big on Cryptocurrency Yield Farms?
If something seems too good to be true, it probably is. Add cryptocurrency yield farms to that list. A complex investment strategy in decentralized finance markets, yield farming advertises eye-popping passively earned returns. While some investors boast impressive returns, for others the risks are unclear or even undisclosed before they invest, and the advertised returns never materialize.
Recap of DGFRC-sponsored finance workshop
The 10th HEC-McGill Winter Finance Workshop took place from March 26-28, 2023, in Ischgl, Austria, in collaboration with the Faculty of Law, Economics and Finance (FDEF) at the University of Luxembourg.
DGFRC-sponsored finance workshop concludes successfully
The 9th edition of HEC-McGill Winter Finance Workshop as a special edition in collaboration with Goethe University successfully concluded on March 29, 2022. The conference, sponsored by the Desmarais Global Finance Research Centre, took place March 27-29 in Ischgl, Austria, and featured presentations of academic papers in all areas of finance, including interdisciplinary work in law and finance.
Delve - "New Normal" podcast: COVID-19, Ethics, and Stock Tips with Patrick Augustin
In episode 4 of The ‘New Normal’ hosted by Dave Kaufman, Professor Patrick Augustin from The Desautels Faculty of Management at McGill University examines the allegations of insider trading levied against former Georgia Senators David Perdue and Kelly Loeffler at the dawn of the first wave of the COVID-19 pandemic.
The future of ETF regulation
Professor Patrick Augustin provides an expert perspective on questions surrounding the regulation of a Bitcoin-traded fund (ETF) proposed by VanEck Associates Group. While the Securities and Exchange Commission (SEC) deliberates, it runs the risk of making space for a digital shadow finance industry to emerge, says Augustin.
When sovereign debt becomes a problem
Professor Patrick Augustin and three other North American economists are ringing an alarm bell about the increasing risks associated with heavy borrowing at the state level. In their recent study of 30 developed countries and 30 U.S. states, they measure the effect of the spread of the COVID-19 pandemic on the borrowing costs of governments.
Prevent members of U.S. Congress from trading individual stocks
Professor Patrick Augustin wades into the debate over the heated race to fill Georgia’s two Senate seats in a runoff and special election scheduled for January.
Potential insider trading following landmark Kodak loan
In July, the U.S. International Development Finance Corporation (DFC) provided a $765 million loan to support Kodak’s transition from photo giant to producing drugs for the U.S. domestic market. The first loan of its kind under the Defense Production Act, it is not surprising that ensuing events have hinted at the possibility of illegal insider trading, writes Professor Patrick Augustin.
U.S. states facing financial hardship need unity
As the pandemic takes its financial toll on states across the U.S., Professor Patrick Augustin suggests that compromise and unity from the federal government could provide a lifeline for those facing economic harship.
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Delve: Insider Trading by Congress? It's Time to Fix the Law
The “coronavirus trades” made by Sen. Richard Burr (R-N.C.) and his wife just prior to the March ’20 market crash raise these questions and signal the need for changes to the law. Some proposals go as far as banning stock trading by members of congress outright. The other extreme is to allow full discretion.
COVID-19 reveals European Union in discord
The COVID-19 pandemic has revealed economic weaknesses in some EU countries, with the stronger members reluctant to provide assistance.
Professor Patrick Augustin warns of the economic storm ahead if the EU does not reach solidarity.
Read more in Fortune
Insider trading by Congress reveals need for policy change
Trading by members of Congress shortly before the March 2020 market crash signals the need for policy change. In an op-ed for The Hill, Professor Patrick Augustin calls for a policy that only allows public officials to trade securities based on broad market indices.
Understanding negative swap rates
A paper from Professor Patrick Augustin featured in voxEU looks at how the emergence of US default risk can help to explain the pattern of negative swap rates.
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Insider trading rarely leads to prosecution, study shows
A recent article in Belgium’s L’Echo explores Professor Patrick Augustin’s 2019 research looking at the low prosecution rates following unexplained trading activity in the leadup to company takeovers.
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