Environmental Risk: Should Banks Be Liable?

This paper studies the impact of banks' liability for environmental damages caused by their borrowers. Laws or court decisions that declare banks liable for environmental damages have two objectives : (1) finding someone to pay for the damages and (2) exerting a pressure on a firm's stakeholders to incite them to invest in environmental risk prevention. We study the effect that such legal decisions can have on financing relationships and especially on the incentives to reduce environmental risk in an environment where banks cannot commit to refinance the firm in all circumstances. Following an environmental accident, liable banks more readily agree to refinance the firm. We then show that bank liability effectively makes refinancing more attractive to banks, therefore improving the firm's risk-sharing possibilities. Consequently, the firm's incentives to invest in environmental risk reduction are weakened compared to the (bank) no-liability case. We also show that, when banks are liable, the firm invests at the full-commitment optimal level of risk reduction investment. If there are some externalities such that some damages cannot be accounted for, the socially efficient level of investment is greater than the privately optimal one. in that case, making banks non-liable can be socially desirable.

Bayesian Analysis for a Theory of Random Consumer Demand: The Case of Indivisible Goods

McCausland (2004a) describes a new theory of random consumer demand. Theoretically consistent random demand can be represented by a \"regular\" \"L-utility\" function on the consumption set X. The present paper is about Bayesian inference for regular L-utility functions. We express prior and posterior uncertainty in terms of distributions over the indefinite-dimensional parameter set of a flexible functional form. We propose a class of proper priors on the parameter set. The priors are flexible, in the sense that they put positive probability in the neighborhood of any L-utility function that is regular on a large subset bar(X) of X; and regular, in the sense that they assign zero probability to the set of L-utility functions that are irregular on bar(X). We propose methods of Bayesian inference for an environment with indivisible goods, leaving the more difficult case of indefinitely divisible goods for another paper. We analyse individual choice data from a consumer experiment described in Harbaugh et al. (2001).

Réseaux et cosmopolitisme

Présentation audio du 13 octobre 2007, dans le cadre des séminaires étudiants au CRDP "Sécurité, normativités et mondialisation 2006-2007"

Mondialisation et droit supraétatique : la situation des droits de la personne

Présentation audio du 18 octobre 2006, dans le cadre des séminaires étudiants au CRDP "Sécurité, normativités et mondialisation 2006-2007"

Le transgouvernementalisme : une gouvernance publique en réseau pour mieux contrer les effets pervers de la globalisation

Présentation audio du 11 septembre 2007, dans le cadre des séminaires étudiants au CRDP "Sécurité, normativités et mondialisation 2007-2008"

Security and Securities in English Commercial Law

Paul Latimer, Associate Professor, Department of Business Law and Taxation. Faculty of Business and Economics, Monash University. Présentation dans le cadre du cycle de conférences organisé par le CRDP intitulé « Le droit à la sécurité ... la sécurité par le droit ».

Le contractualisme international : défis, portée et limites d'un cadre théorique

Présentation audio du 09 octobre 2007, dans le cadre des séminaires étudiants au CRDP "Sécurité, normativités et mondialisation 2007-2008"