Cynthia A. Williams

Global Banks as Global Sustainability Regulators?: The Equator Principles

Banks might now seem odd candidates for the role of global sustainability regulator. Nonetheless, in limited areas of their operation, where global banks kept risk on their balance sheets and were financially exposed to many types of risk often otherwise treated as “externalities,” banks began to enact policies to encourage what they construe as “sustainable” banking. A small number of these banks have started to extend these principles of responsible action more broadly, across many of their business lines, as conditions of lending to their corporate clients. To this extent, it is possible to talk about (some) global banks as global sustainability regulators. The “law of unintended consequences” as used in the legal literature almost always refers to the unintended negative consequences of a regulation or policy. In this article, however, we discuss a potentially positive unintended consequence of the deregulatory and privatization trend of the 1980s and 1990s that was fueled by neoliberal political commitments: some private banks have taken a leadership role in regulating development. Specifically, these banks are enacting policies that attempt to mitigate the potentially negative social and environmental consequences of infrastructure development in politically unstable or environmentally fragile landscapes. The vehicle for doing this is a voluntary agreement called the Equator Principles (EPs). The article describes and analyzes the EPs and reports the initial results from an interview-based study of the various EPs stakeholders, including bankers, government officials, lawyers, consultants, and critics from nongovernmental organizations. We address—from the perspective of these stakeholders—such questions as why the participating banks decided to join the EPs, what effects, if any, the EPs are having on development practice, and whether the EPs will ultimately prove to be more than a public relations exercise.

Extracellular proteolysis: Developmentally regulated activity during chick spinal cord histogenesis

The present study was performed to identify at which stages during spinal cord histogenesis the extracellular proteolysis (i.e. the plasmin-generating system) is expressed by the developing tissue. We report that the embryonic chick spinal cord in the course of its histogenesis produces the protease, plasminogen activator. Specific activity of plasminogen activator in the developing embryo was monitored daily, in whole cords (from day 4 until hatching) and in the ventral and dorsal halves of the cord (6-17 days) and was biochemically determined by the fibrinolytic assay. The enzyme-specific activity of the developing cord was found to be very low at early embryonic stages when neuroblasts proliferate and it is markedly enhanced (14-fold at its maximal level) at later stages when the neurons are postmitotic and only the glial cells proliferate. The pattern of plasminogen activator specific activities does not remain at a constant level: it appears to be developmentally regulated, since it is decreased and enhanced during 3 temporal stages of the spinal cord histogenesis. These coincide with the stages when a transient increase in cell proliferation, presumably of glia, was monitored as determined daily by the spinal cord DNA content (microgram DNA/mg protein). Furthermore, on days 7-9 of embryonic age, the two halves of the cord differ in their plasminogen activator specific activities; activity levels of the ventral halves were found to be higher than their dorsal counterparts with significant difference on day 7. These correspond with the well-established differentiation gradient in the ventral-to-dorsal axis of the cord.(ABSTRACT TRUNCATED AT 250 WORDS)

The Social Reform of Banking

Recent developments in banking, including high-profile prosecutions for illegal activities, suggest further regulatory interventions on both sides of the Atlantic. Yet the structure of much banking regulation requires banks to make good faith determinations of the type of risks to which their loans give rise—determinations that can be and, in some cases have been, manipulated. Rather than evaluating specific regulatory interventions, this chapter will focus on the culture within financial institutions themselves, particularly the global entities that are explicitly or implicitly too big to fail, and on approaches to regulation that might affect and be affected by that culture. Our analysis is informed by the perspectives of anthropology, organizational and social psychology, and new governance regulatory theory.

The Embedded Firm: Corporate Governance, Labor, and Finance Capitalism

This paper constitutes the introduction to an edited collection, THE EMBEDDED FIRM: LABOR, CORPORATE GOVERNANCE AND FINANCE CAPITALISM (Cambridge University Press, 2011). This book brings together contributions from law, economics, sociology and politics in order to evaluate the effects of the shift to shareholder primacy in both the United States and the United Kingdom, in the context of an increasingly financialized economy. Contributors include Ruth Aguilera, William Allen, Harry Arthurs, Blanaid Clark, Mary Condon, Simon Deakin, Sandy Jacoby, William Lazonick, Sue Konzelmann, Dalia Tsuk Mitchell, Larry Mitchell, Frank Wilkinson, and the editors Cynthia Williams and Peer Zumbansen, among others. The book emphasizes empirical evidence, in conjunction with theory, in conscious rejection of the oft- stated view that “it takes a theory to beat a theory.” For in evaluating the empirical effects of these decades-long trends, in light of the on-going global financial and economic crises - crises propagated from the United States - the problems inherent in American-style corporate governance have become manifest. Such problems do not only concern corporate governance, since the shareholder wealth maximizing norm in the United States is embedded within economic and political institutions stripped of many social democratic norms and policies and with an increasing tendency towards deregulation. But the book demonstrates that the result of shareholder primacy, in conjunction with neo-liberal economic and political norms, has been increasing economic volatility and inequality, systemic fragility, and financial risk that is increasingly being transferred to individuals to manage, given the collapse of many collective bargaining agreements and collective arrangements for pensions. The congruence of theory and evidence suggesting weaknesses in shareholder driven corporate governance as expressed in the U.S. and U.K. give rise to questions of how policy and research can best be harnessed to develop more stable systems of corporate governance, and how these goals may best be aligned with government policy. Since it is naive to think that continental European stakeholder systems, also under pressure, could be transplanted into the United States or the United Kingdom by legislative fiat, the book concludes with suggestions for research and policy development to address the instabilities shareholder corporate governance systems create, while still relying upon existing models within liberal market economies.

The Economic Role of Finance: A Contribution to the the Kay Review of UK Equity Markets and Long-Term Decision Making

This contribution is written by a number of participants and directors of the Network for Sustainable Financial Markets (NSFM), an international, non-partisan, non-profit organization comprised of financial market professionals and academics. We strongly welcome the Kay Review, in which the mechanisms of corporate control and accountability provided by UK equity markets are examined for their effect on the long term competitive performance of UK businesses. We believe it could have a significant positive impact in the UK but also important knock-on international effects, especially with regard to countries following the Anglo-Saxon model. In light of the financial crisis and continuing instabilities in developed market economies, we expect normative debates about how to create healthy economies to become more prominent. The perspective we bring is a sample of perspectives from NSFM. Acting outside of organisational affiliations and thus with reduced agency interests, we believe informed practitioners and commentators are well suited to identify current systemic problems and help to develop communities of practice within financial institutions to address those problems. It is in that spirit that we provide the following views, culled from the work and insights of many of our colleagues in NSFM.