Despite being recognized as a primary culprit of the financial crisis, shadow banking has continued to flourish. According to the Financial Stability Board (FSB), shadow banking has grown since the onset of the crisis from $62 trillion in 2007 to $67 trillion[i]. Fortunately, the FSB plans to release regulatory recommendations by the end of the year. This article will summarize the risks inherent with shadow banking, the effects of the Dodd-Frank Act, and possible reforms designed to mitigate these risks and any inadequacies of Dodd-Frank. [More]

The national debt of the United States now exceeds $16 trillion. Current estimates suggest that the present year’s deficit will amount to approximately $1.1 trillion, a negligible improvement upon 2011’s $1.3 trillion deficit. The present unemployment rate is one of the highest of the past sixty years, with approximately eight percent of Americans unable to find work. Unless significant changes are made in both federal income and expenditure, the economic livelihood of future generations is bleak. [More]

Frustrated with your bank’s surprise fees and minute interest rates? Shop at Walmart? You may find a solution to your woes in an unusual but convenient location: on the “Every Day Low Price” stores’ shelves. [More]

What do Raj Rajaratnam and a mafioso have in common? Both have received similar treatment from the Federal Bureau of Investigation (FBI). Rajaratnam’s recent conviction for securities fraud by way of insider trading came about through the use of evidence obtained by wiretapping. Wiretapping is a common technique used by the FBI to help build cases against members of organized crime under the Racketeer Influenced and Organized Crime Act (RICO). Referred to by the FBI as operation "Perfect Hedge," the United States has begun to use wiretapping to prosecute insider trading. The case of Raj Rajaratnam, which is currently on appeal in the Second Circuit, presents a tough dilemma: how far should we go in investigating and prosecuting alleged white collar criminals? [More]

The Congressional Oversight Panel for the Troubled Asset Relief Program (TARP) has issued its final report, and the TARP program is projected to cost much less than forecast. Unfortunately, TARP hasn’t solved the original problem of “too big to fail”. The problem is worse today, and the legislative solution may make things even worse. [More]

In the aftermath of the financial crisis, Congress passed the Dodd-Frank Financial Reform Act, which sought to prevent its repeat. Yet the new House Republican majority is taking aim at a key provision of the law, which sought to give investors more accurate information by holding credit rating agencies legally liable for giving high ratings to low quality mortgage-backed bonds. While there are other ways to ensure accurate credit ratings than enhanced liability, congressional Republicans are removing an imperfect protection without replacing it with anything better. [More]

In May 2009 American President Barack Obama spoke of how an address in the Cayman Islands housed 12,000 companies. Alluding to the possibility of illegal activity, he noted that this location was either the biggest building in the world or “the largest tax scam in the world.” [1] This image of Offshore Financial Centers (OFCs) as havens for wrongdoing is generally held throughout the world.

Recent data indicates that the Cayman Islands holds over 670 billion American Dollars in banking assets from international investors[2]. Because of such statistics, these small islands are considered a global villain, a haven for illegal capital. According to the OECD Harmful Tax Competition: An Emerging Global Issue (1998 Tax Report) jurisdictions that (a) imposes no or only nominal taxes, (b) lacks policy of effective exchange information, (c) lacks transparency and (d) has no requirement of “substantial activity” is identified as a tax haven[3].

A Background Information Brief released by the OECD (Organisation for Economic Co-operation and Development) in March 2010 acknowledged the implementation of the Cayman’s actions towards transparency and information exchange. Despite this report’s recognition of the Caymans, it touched upon only a few of the measures that have been taken by the Cayman Islands in the last few years. These improvements in the Cayman’s internal structure and the regulatory actions taken by the Cayman Islands have enhanced the islands’ status within the international community. The Cayman’s pejorative title as a “tax haven” is, therefore, incorrect.



First, this article will examine the true atmosphere of the Cayman Islands, and how this British territory and the 5th largest banking center in the world is cooperating with the OECD and other jurisdictions by partaking in several Tax Information Exchange Agreements (TIEAs). Second, this article also aims to defend the valuable and important role of international policy distinctions among nations as a pursuit of effectiveness in the financial system worldwide [More]

The recent decision by the Illinois Supreme Court regarding tax exemption for hospitals is troubling for the already volatile and uncertain future of many hospitals that are facing increasing difficulties in the current economic market. The Illinois Supreme Court held that Provena Medical Center in Urbana does not provide enough charity care to qualify for the tax exemption provided for hospitals that care for uninsured and poor patients without generating a profit or collecting fees.[1] The decision has generated significant criticism for relying on old precedent, failing to take into account current economic conditions, and for failing to provide clear guidelines for nonprofit hospitals that want to qualify for tax exemption in Illinois.[2] The implications of this decision while not precisely known can have wide ranging consequences for hospital financing and for access to healthcare for low income and uninsured individuals. What are hospitals required to do to quality for tax exemption in Illinois? What financial implications does this have on nonprofit hospitals? What implications does this have on patients? Will this decision effectively end charitable exemptions for nonprofit hospitals? This article will attempt to briefly outline the issue and provide the possible policy implications of this decision. [More]

In the current financial crisis borrowers are finding it increasingly difficult to access capital for their investments. This is affecting one of the most important industries in our society, health care. Hospitals are a vital part of the health care industry and they are facing especially hard times in today’s economy. It is not a surprise to many people that hospitals are facing financial difficulties. Hospitals have consistently faced financial difficulties even in a good economy. However, the current credit crisis is affecting hospitals more than any other organization because of the high levels of uninsured seeking health care services, low reimbursement rates from Medicaid and Medicare, and staff shortages. Now more than ever before hospitals are facing increasing debt and are unable to gain more capital or refinancing their existing loans because it is more difficult to obtain credit. As a result, hospitals all over the country are filing bankruptcy and closing down. This is having a devastating affect on the access and quality of health care for many Americans. This article will examine why hospitals are facing financial difficulties and propose solutions to the problem by drawing upon examples of hospitals that are performing well in the current economy. [More]

Microcredit Part 2 will explore a possible application of the microcredit system in the United States as well as problems that such an application may encounter and solutions to such issues. [More]