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Unpublished Paper
Bringing Bailouts to Court: Applying Previously Unrealized Parallels Between Finance and Patents to Solve Economic Crises
(2012)
  • Timothy Li
Abstract
This Note argues that the Dodd-Frank Act will not prevent future government bailouts of failing banks, because Congress already promised and failed to end bank bailouts only twenty years earlier in response to the Savings and Loans Crisis. Rather than rely on extra-judicial remedies like the Orderly Liquidation Authority, banks should be brought to court in expedited finance trials subject to appeal to the Federal Circuit. One possible model could be expedited patent trials at the U.S. International Trade Commission. In fact, many previously unrealized parallels exist between finance and patents. Both require high technical expertise, benefit from nationwide jurisdiction, and depend on speedy trial and appellate resolutions. Even if this proposed solution does not guarantee the end of bailouts, it does compel regulators to argue for each bailout in a formal hearing with a public record before an impartial decision-maker. Alternative strategies to end bailouts, by contrast, do not address moral hazard, regulatory discretion, and the global nature of finance.
Keywords
  • Banking and finance,
  • SIFI,
  • bailouts,
  • Federal Reserve,
  • Dodd-Frank Act,
  • Orderly Liquidation Authority,
  • moral hazard,
  • regulatory discretion,
  • expedited finance trial
Publication Date
2012
Citation Information
Timothy Li. "Bringing Bailouts to Court: Applying Previously Unrealized Parallels Between Finance and Patents to Solve Economic Crises" (2012)
Available at: http://works.bepress.com/timothy_li/5/