Document Type


Publication Date



Banking and Finance Law


This Article explores the possibility of creating a system of mandatory pre-approval of complex financial products as an ex ante solution to the problem of systemic risk containment. Building on the concept of regulatory precaution borrowed from environmental and health law, and elements of pre-CFMA regulation of commodity futures, the Article outlines the broad contours of a new licensing scheme that would place the burden of proving social and economic utility of complex financial instruments on the intermediaries that structure and market them. Fundamentally a thought experiment, this proposal seeks to enrich the current policy debate by expanding the range of potentially plausible reform options.


This article predates the author's affiliation with Cornell Law School.

Publication Citation

Published in: Washington University Law Review, vol. 90, no. 1 (2012).