Living wills and financial leverage

Source: Flikr Creative Commons The headline in today’s New York Times, “‘Living Wills’ of 5 Banks Fail to Pass Muster,” might have struck some as another consequence of the Supreme Court’s view that corporations are people. Do companies need living wills like individuals do? Not quite. The living wills of which the article speaks are bankruptcy plans mandated by the Dodd-Frank Wall Street … [Read more...]

Retirement saving and the principal-agent problem

Source: Flikr Creative Commons ‘Customers First’ to Become the Law in Retirement Investing read the headline in the New York Times. You’re first reaction might be, “it wasn’t already?” No, retirement planning grew out of the financial intermediaries that already existed in the 1980s, when retirement saving started to change radically. Before the 1980s, the 3-legged stool was the metaphor for … [Read more...]

Tax inversions and Ronald Coase

Ronald H. Coase Pfizer and Allergan called off their $150 billion merger this morning.  What caused these two companies to call the whole thing off? The headline reason for not going through with the transaction was that the Treasury Department changed the rules on tax inversions.  A tax inversion is a situation where a US-headquartered company, in this case Pfizer, merges with a … [Read more...]