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"The 2008 financial crash was the worst financial crisis and the most severe economic downturn since the Great Depression. It triggered a complete overhaul of the global regulatory environment, ushering in a stream of new rules and laws to combat the perceived weakness of the financial system. While the global economy came back from the brink, the continuing effects of the crisis include increasing economic inequality and political polarization. Ten Years After the Crash is an innovative analysis of the crisis and its ongoing influence on the global regulatory, financial, and political landscape, with timely discussions of the key issues for our economic future. It brings together a range of expert and practitioner perspectives, including the Nobel Prize winner Joseph Stiglitz, the former congressman Barney Frank, the former treasury secretary Jacob Lew, the former deputy governor of the Bank of England Paul Tucker, and Steve Cutler, general counsel of JP Morgan Chase during the financial crisis. Each poses crucial questions: What were the origins of the crisis? How effective were international and domestic regulatory responses? Have we addressed the roots of the crisis through reform and regulation? Are our financial systems and the global economy better able to withstand another crash? Ten Years After the Crash is vital reading as both a retrospective on the last crisis and analysis of possible sources of the next one"--

Frontmatter -- CONTENTS -- FOREWORD / Madigan, David -- PREFACE / O'Halloran, Sharyn / Groll, Thomas -- 1. Introduction: Overview of the Financial Crisis and Its Impacts / O'Halloran, Sharyn / Groll, Thomas / Mcallister, Geraldine -- PART I. THE FINANCIAL CRISIS IN PERSPECTIVE -- 2. If "It" Happened Again: A Road Map for Regulatory Reform / Hubbard, Glenn -- 3. Trends and Delegation in U.S. Financial Market Regulation / Groll, Thomas / O'Halloran, Sharyn / Mcallister, Geraldine -- 4. We Did Not Repeat the Errors of the Past: Lessons Drawn from the Fed's Policy During the Great Depression / Parent, Antoine -- 5. Regulation and Competition in the EU Financial Sector / Pradier, Pierre-Charles -- 6. Trends in Financial Market Regulation / Mccarty, Nolan -- PART II. CREATING THE RIGHT (DIS)INCENTIVES -- 7. Progress and Challenges After the Financial Crisis / Lew, Jacob J. -- 8. Banks and Tax Havens: First Evidence Based on Country-by-Country Reporting / Bouvatier, Vincent / Capelle-Blancard, Gunther / Delatte, Anne-Laure -- 9. "Dynamic Precaution" in Maintaining Financial Stability: The Importance of FSOC / Gordon, Jeffrey N. -- PART III. USE AND (AB)USE OF MODELS IN PREDICTING FINANCIAL OUTCOMES -- 10. Reflections on the Global Financial Crisis Ten Years On / Stiglitz, Joseph E. -- 11. The Right Way to Use Models / Derman, Emanuel -- 12. The Fundamental Volatility of the Digital Economy as a Contributor to Financial Instability / Noam, Eli -- 13. The Impact of Regulation on Systemic Risk / O'Halloran, Sharyn / Nowaczyk, Nikolai -- 14. Big Data, Process Scalability, and Financial Stability / Flood, Mark D. -- PART IV. REGULATING FOR THE NEXT CRISIS? -- 15. Rules Versus Principles in Financial Regulation Following the Crisis: It All Depends on the Purpose / Tucker, Paul -- 16. How to Regulate in Times of Crisis / Cutler, Stephen M. -- 17. The Economic and Political Implications of the Dodd-Frank Act / Frank, Barney -- 18. The Regulatory Sine Curve: What Explains the Retreat from Systemic Risk Regulation (and Why It Was Predictable) / Coffee, John C. -- 19. Roundtable: It's Not Too Much or Too Little Regulation; It's Getting It Right / Coffee, John C. / Cutler, Stephen M. / Frank, Barney / Judge, Kathryn -- PART V. THE ORIGINS OF THE NEXT FINANCIAL CRISIS -- 20. Interview: Striking the Right Balance between Markets and Regulation / Winters, William T. / Röell, Ailsa -- 21. Money Market Funds After the Onset of the Crisis / Baklanova, Viktoria / Tanega, Joseph -- 22. The 2017 Tax Act's Potential Impact on Bank Safety and Capitalization / Roe, Mark J. / Tröge, Michael -- 23. Derivative Clearinghouses: Collateral Management and Policy Implications / Capponi, Agostino -- Concluding Remarks / O'Halloran, Sharyn / Groll, Thomas -- CONTRIBUTORS -- INDEX

We study lobbying in a setting in which decision-makers share resources in a network. Two opposing interest groups choose which decision-maker they want to target with their resource provision, and their decision depends on the decision-makers' ideologies as well as the network structure. We characterize the lobbying strategies in various network settings and show that a higher resource flow as well as homophily reinforce decision-makers' ideological bias. We highlight that competing lobbyists' efforts do not neutralize each other and their payoffs and competitive advantages depend on the networks they face. Our findings are consistent with empirically established lobbying activities.

We analyze the strategic considerations inherent in legislative subsidies and develop an informational lobbying model with costly policy reforms. In contrast to other models of informational lobbying, we focus on the implications of a policymaker's and a lobby's resource constraints for lobbying activities. We allow both a policymaker and a lobby to gather information, and each can either fund or subsidize policymaking. Our analysis highlights that legislative subsidies are both chosen strategically by lobbyists and strategically induced by policymakers, dependent on the circumstances. These involve which resource constraints bind the policymaker's prior beliefs, the salience of policy, and the policymaker's and lobby's expertise in information gathering. Our results highlight five distinct motives for informational lobbying and demonstrate that for both a lobby and policymaker, there can be strategic advantages arising from being resource-constrained.

We model which special interest groups lobby which policymakers directly, and which employ for-profit intermediaries. We show that special interests affected by policy issues that frequently receive high political salience lobby policymakers directly, while those that rarely receive high political salience must employ "hired guns." This follows from the availability of repeated agency contracts between policymakers and special interests. Special interests that lobby on issues that frequently experience high political salience may be incentivized to truthfully reveal private, policy relevant, information to policymakers via the promise of a high probability future political access. For-profit intermediaries are always in the "informational lobbying market" and can be easily incentivized by policymakers to truthfully reveal private information. We also show that "insecure" policymakers, those in vulnerable seats, tend to be lobbied by professional intermediaries. Also, policymakers that are more time constrained tend to rely more on professional intermediaries for policy relevant information.

Using a model of repeated agency, we explain previously unexplained features of the real-world lobbying industry. Lobbying is divided between direct representation by special interests to policymakers, and indirect representation where special interests employ professional intermediaries called commercial lobbyists to lobby policymakers on their behalf. Our analytical structure allows us to explain several trends in lobbying. For example, using the observation that in the U.S. over the last 20 years policymakers have spent an increasing amount of their time fundraising as opposed to legislating, we are able to explain why the share of commercial lobbyist activity in total lobbying has risen dramatically and now constitutes over 60% of the total. The key scarce resource in our analysis is policymakers' time. They allocate this resource via implicit repeated agency contracts which are used to incent special interests and commercial lobbyists to provide a mix of financial contributions and information on policy proposals. These implicit agency contracts solve both an information problem in the presence of unverifiable policy information and a contracting problem in the absence of legal enforcement. These repeated relationship, that are often described using the pejorative term cronyism in the popular press, may in certain circumstances be welfare improving.