The 15th AIIFL Distinguished Public Lecture

Risk, New “Modes of Information,” and the Informational Complexities of Asset-Backed Securities, Banks, and Corporations

Monday, 13 March 2017
6:30 – 7:30 pm
Academic Conference Room, 11/F Cheng Yu Tung Tower
The University of Hong Kong

Professor Henry T.C. Hu
Allan Shivers Chair in the Law of Banking and Finance
University of Texas Law School

Under a new analytical framework for “information,” the basic approach to public disclosure that the U.S. Securities and Exchange Commission has used since its creation in 1934 and many other regulators worldwide use today is conceptualized as substantially relying on “intermediary depictions” of objective reality. As became evident in the global financial crisis, this approach can sometimes prove manifestly insufficient to capture the extraordinarily complex objective realities that are now being created. This lecture will focus on this “too complex to depict” problem in financial innovation-related contexts (e.g., asset-backed securities and JPMorgan Chase “London Whale” derivatives exposures). The new analytical framework suggests that public disclosure move to a portfolio of approaches to information, a portfolio not only relying on “intermediary depictions” but also on “pure information” and “hybrid information.” Bank regulatory and corporate matters will also be discussed.