The durability of legislative benefits and the role of the executive branch’s settlement authority

Research output: Contribution to journalArticlepeer-review

Abstract

Following the 2008 financial crisis, the US Department of Justice required several large financial institutions to pay large cash settlements for their role in the collapse of the residential mortgage-backed securities market. A fraction of these cash settlements was funneled to government-approved nonprofit beneficiaries, many of whom had seen their government grants reduced by Congress. I argue that this transfer is an insurance contract that the government uses to improve the durability of contracts between special interest groups and the legislature.

Original languageEnglish
Pages (from-to)1-14
Number of pages14
JournalJournal of Private Enterprise
Volume34
Issue number1
StatePublished - Mar 1 2019

Keywords

  • Administrative state
  • Bank settlements
  • Contractual durability
  • Rent extraction
  • Separation of powers

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