On Dec. 3 , Mark Roe '75, the David Berg Professor of Law at Harvard Law School , testified before the Judiciary Committee's Subcommittee on Regulatory Reform, Commercial and Antitrust Law. Roe testified at a hearing titled "The Bankruptcy Code and Financial Institution Insolvencies." An expert on corporate law and bankruptcy law, Roe focused his testimony on the exemptions from bankruptcy for derivatives and short-term financing—the so-called bankruptcy safe harbors, which he says are too wide. "[Safe harbors] exempt much short-term financing and risky investing from the normal operation of American bankruptcy law. By treating short-term financial debt and derivatives trading much better than regular lenders and ordinary suppliers to the bankrupt, the safe harbors make an effective resolution in a bankruptcy without regulatory support difficult, and for some financial firms, impossible. Worse yet, they undermine market discipline in the pre-bankruptcy market, making the financial system and the American economy riskier than it needs to be and more prone to suffer major failures. The safe harbor exemptions from normal bankruptcy rules subsidize short-term loans over stronger, more stable longer-term financing for financial institutions," he said. In addition to Roe, Jeffrey Lacker , president of the Federal Reserve Bank of Richmond , and Donald S. Bernstein , a partner at Davis Polk & Wardwell in New York , also testified. An archive of the hearing is available at http://www.ustream.tv/recorded/41343403 . (Professor Roe's testimony begins at approximately 01:23:00.) Read Professor Roe's written testimony (PDF) Roe joined the Harvard Law School faculty in 2001. He previously taught at Columbia Law School . Roe has written extensively on corporate law and new methods of corporate reorganization and bankruptcy. He is the author of several books, including "Bankruptcy and Corporate Reorganization: Legal and Financial Materials" ( Thomson Reuters/Foundation Press 3d ed. 2011), "Corporate Governance: Political and Legal Perspectives" ( Edward Elgar Publishing 2005), "Political Determinants of Corporate Governance" (Oxford, 2003) and "Strong Managers, Weak Owners: The Political Roots of American Corporate Finance" ( Princeton , 1994.) In 2009, he was inducted into the American Academy of Arts and Sciences . Roe was recently named a fellow in the American College of Bankruptcy .
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