WIFPR Blog

By Brett Seaton Background Cooperation agreements (Co-Ops) with a carveout emerged over the past two years as an innovation in the landscape of corporate restructuring, shaped by the rise of covenant-lite loans and lender-on-lender violence. The “dropdown” transaction pioneered by J. Crew in 2016 and the “uptier” created by Serta Simmons in 2020 have given debtors new ...Read More

By Mallika Patkar A growing number of venture capital firms are exploring AI solutions to support everything from deal sourcing to portfolio monitoring. These use cases are not limited to large, data-rich institutions; smaller, more agile firms are also experimenting with tools and custom workflows to gain an edge. At the same time, the growing use ...Read More

By Matthew Bisanz and Jeffrey P. Taft In March 2025, the US Government Accountability Office (“GAO”) released a report on how the US federal banking regulators participated in the development of the Basel III Endgame capital standards (“GAO Report”). While the GAO Report sheds some light on the operations of the Basel Committee on Banking Supervision ...Read More

By Giovanna Massarotto Blockchain technology is a relatively new phenomenon that many of its proponents believe can help to decentralize the economy and enable economic freedom. However, what decentralization means is often unclear. Importantly, we have a century of economic studies focused on decentralization, offering valuable lessons to inform today’s digitally driven economy. In an ideal world, ...Read More

By Mallika Patkar and Joselyn Salazar According to the Atlantic Council’s Central Bank Digital Currency (CBDC) Tracker, 134 countries and currency unions, representing 98% of global GDP, are currently exploring a CBDC. This marks a significant increase from just 35 countries in May 2020.  While many countries are exploring CBDCs, Brazil has taken a distinct approach ...Read More

By Sarah Hammer, Executive Director at the Wharton School and Adjunct Professor at the University of Pennsylvania Carey Law School America stands at the precipice of a digital finance revolution—a historic opportunity to lead global innovation, but one that other nations are rapidly mobilizing to capture. Throughout my career investigating...Read More

By JV Pineda Over the past few years, advancements in technology and regulation such as cloud-based infrastructure, open banking regulations, and Application Programming Interface (API)-driven services have paved the way for new models of the delivery of banking services. Banking-as-a-Service (BaaS) is one of these newly emerged models, enabling non-bank entities to offer financial services through partnerships with ...Read More

By Victoria Liu and Djavaneh Bierwirth Crowdsourcing opinions, experiences and answers is not news to the Internet. Per Wolfers and Zitzewitz, “the power of prediction markets derives from the fact that they provide incentives for truthful revelation, they provide incentives for research and information discovery, and the market provides an algorithm for aggregating opinions.” Despite prediction markets ...Read More

By Giovanna Massarotto In this article, I will briefly review my work on blockchain and antitrust as a way of regulating digital markets, demonstrating how blockchain and decentralized finance (DeFi) are inherently connected to the principles of antitrust law and can work synergistically in driving innovation by pursuing economic freedom in a digital economy. This work ...Read More

By Sarah Hammer Crypto’s Promise: Redefining Finance from the Ground Up Every trade is a battle for dominance on Wall Street. It was here, starting my career as a derivatives trader in the high-stakes markets for global financial giants, that I saw firsthand the limits of a financial system stressed by outdated processes. T+2 settlement cycles stretched ...Read More

By Giovanna Massarotto In the emerging digital economy, antitrust regulation has come to the forefront. After being declared dead in 2017, antitrust is back on the scene by reviving the trust-busting era. In recent years, multiple antitrust proceedings have been opened against Google, Amazon, Meta, and Apple. The Department of Justice (DOJ) Antitrust Division’s latest target ...Read More

On June 18, 2024, the Wharton Initiative on Financial Policy and Regulation and the International Monetary Fund co-hosted the Conference on Financial and Real Implications of Technologies, AI, and Cyber Risks at the IMF Headquarters in Washington D.C. This conference explored the influence of technological advancements, AI integration, and cyber...Read More

On June 18, 2024, the Wharton Initiative on Financial Policy and Regulation (WIFPR) co-hosted with the International Monetary Fund (IMF) the IMF-WIFPR Conference on Financial and Real Implications of Technologies, Artificial Intelligence (AI), and Cyber Risks. This is the second annual IMF-WIFPR conference, following up on last year’s Conference on...Read More

By Sean Vanatta In a 1991 article in the American Economic Review, Lawrence Ausubel posed a question: Why had competition failed in the credit card market? Credit card interest rates had surged in the early 1980s following Fed Chairman Paul Volcker’s dramatic bit to purge inflation, but as market interest rates moderated later in the decade, ...Read More

On Friday, April 19, the Wharton Initiative on Financial Policy and Regulation (WIFPR) co-hosted a conference with Yale’s Tobin Center for Economic Policy on “Rethinking Optimal Deposit Insurance.” The conference was organized by Itay Goldstein, WIFPR director and Joel S. Ehrenkranz Family Professor of Finance at Wharton, and Eduardo Davila,...Read More

The WIFPR Blog publishes posts spotlighting research by members of the Wharton community. In this post, Anna Helmke, PhD candidate in Finance, discusses her work on ETFs and mutual funds. By Anna Helmke The rise of passive investing has been nothing short of revolutionary. At the heart of this phenomenon lies the idea that the average investor ...Read More

The WIFPR Blog publishes posts spotlighting research by members of the Wharton community. In this post, Sergey Sarkisyan, PhD candidate in Finance, discusses his work on instant payments and the competition for deposits. By Sergey Sarkisyan The banking industry is highly concentrated. Despite the fact that there are 4,200 banks...Read More

Note: this post is part of our series on Basel III Endgame, which features contributions from participants at our Basel III Endgame roundtable. You can find other posts in the series here. By Viral V Acharya “Basel III Endgame” is a set of rules proposed by the US regulatory authorities, applicable to banking organizations with more than ...Read More

September 18, 2023 This post summarizes key takeaways from a September roundtable on digital currencies. Chair Sarah Hammer, Executive Director at the Wharton School and Adjunct Professor at the University of Pennsylvania Law School Speakers Sopnendu Mohanty, Chief Fintech Officer, Monetary Authority of Singapore Tara Rice, Head of Secretariat, Committee on Payments and Market Infrastructures, BIS Piero Cipollone, Executive Board of the ...Read More

Note: this post is part of our series on Basel III Endgame, which features contributions from participants at our Basel III Endgame roundtable. You can find other posts in the series here. By David Zaring On November 7, 2023, the Wharton Initiative on Financial Policy and Regulation (WIFPR) convened a number of academics, lawyers, economists, and bankers ...Read More

Note: this post is part of our series on Basel III Endgame, which features contributions from participants at our Basel III Endgame roundtable. You can find other posts in the series here. By Sarah Hammer The endgame is here.  The denouement of Basel III arrives over a decade since its introduction, signifying a pivotal moment in global ...Read More

Note: this post is part of our series on Basel III Endgame, which features contributions from participants at our Basel III Endgame roundtable. You can find other posts in the series here. By Tomasz Piskorski Summary The 2023 bank failures underscore the fundamental issue of banking vulnerability rooted in the extensive financial leverage employed by banks and their ...Read More

On Tuesday, November 7, 2024, the Wharton Initiative on Financial Policy and Regulation (WIFPR) hosted a roundtable on Basel III Endgame. The roundtable convened two dozen academic, industry, and policy experts to discuss the proposed rule by the federal banking agencies (Federal Reserve, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency) ...Read More

By Sean Vanatta For 36 years, Joe Biden represented Delaware in the United States Senate. Critics, uncharitably, accused him of representing MBNA, a credit card issuer based in Wilmington (acquired by Bank of America in 2005). Biden’s reputation stemmed from his defense of card issuers specifically—notably through the 2005 Bankruptcy Reform Act—and corporate America more generally. ...Read More

From Bailey Building and Loan in It's a Wonderful Life to Silicon Valley Bank in real life – bank runs are a familiar story throughout history. In the latest edition of Wharton Magazine, Wharton professor and WIFPR Director Itay Goldstein gives a Whiteboard lesson all about bank runs. Learn what...Read More

By James Blume In 1692, the summer of the Salem Witch Trials, the colony of Massachusetts finalized its invention of modern currency. For the first time in history, a paper currency with no intrinsic value or credible promise of convertibility was voluntarily used in commerce. The Massachusetts paper “bills” were printed by the state, managed by ...Read More

By Alex Royt On March 8, 2022, the Central Bank of Russia (CBR) decided to stop exchanging rubles for foreign currencies. Russia’s invasion of Ukraine the previous month led to sanctions—including the freezing of a majority of CBR reserves— that had made the defense of the ruble’s exchange rate impossible, with the value of the ruble ...Read More

By Sean Vanatta In 2005, J.P. Morgan Chase revealed that two of its predecessor banks—legacies of earlier acquisitions and reorganizations—had been complicit in financing American slavery. Together, the banks had “accepted approximately 13,000 slaves as collateral for loans,” the bank explained, “and ended up owning approximately 1,250 of them” when borrowers failed to repay their debts. ...Read More

By Itay Goldstein and Yao Zeng Last year’s Nobel Prize in Economics went to Douglas Diamond and Philip Dybvig for their pioneering illustration of bank runs. In a nutshell, banks use investors’ liquid deposit money to invest in illiquid projects like factories and houses. If depositors expect other depositors to take their money out, they want ...Read More

By Peter Conti-Brown The collapse of Sam Bankman-Fried’s FTX empire – and his subsequent arrest in the Bahamas in response to a request from the US Department of Justice – has dominated regulatory discussions about crypto, finance, and much else. But as tumultuous and distracting as the FTX drama has been – and the sex, drugs, ...Read More

By Felix Nockher The separation of ownership and control allows shareholders to diversify their portfolios and firms to undertake value generating projects regardless of their level of idiosyncratic risk. However, the universal push for diversification often means that shareholders do not bear sufficient risk to incentivize them to monitor the firms in their portfolios. As a ...Read More

By Kaleb Nygaard From evenings as the haute cuisine home chef, to the extra early arrival time at the airport, to the three days dedicated to drilling before each FOMC press conference, Janet Yellen is, at heart, an eager and anxious preparer. Her time management and attention to detail manifested in her college days with a ...Read More

By Max Harris In 2014, during the centenary of the First World War, Her Majesty’s Treasury announced that Britain would repay its outstanding debts from that tragic conflict. The Allies had long since defeated the Kaiser, but Britain was still spending millions of pounds in interest every year on those age-old borrowings. Repaying (more accurately, refinancing) ...Read More

By Bradford (Lynch) Levy By most accounts, the past decade has heralded a new age in retail investing—by eliminating commissions retail brokers have “democratized finance.” In place of commissions, retail brokers now rely on payment for order flow (PFOF) to drive revenue. While the elimination of commissions sounds great, there is ongoing debate as to whether ...Read More

By Max Harris Exchange rate management is once again in the headlines. The dollar is strong, inflation is rampant, and policymakers around the world are trying to get a grip. Emerging market economies have spent billions to curb depreciation. Advanced economies are feeling the heat as well. In September, Japan’s finance ministry intervened in foreign exchange ...Read More

Welcome to the blog of the Wharton Initiative on Financial Policy and Regulation (WIFPR). This post will introduce you to WIFPR, its mission, its staff, and will explain the blog’s purpose and range. WIFPR was founded by Peter Conti-Brown and Itay Goldstein in 2021 to serve as the leading forum for financial policy discussion at The ...Read More