Hosted By Prof. Erik P.M. Vermeulen – Professor of Business and Financial Law at Tilburg University and Tilburg Law and Economics Center (TILEC) in the Netherlands.

Below are abstracts and SSRN links of my prior 4 articles on “Dynamic Regulation”:

Evolution of Law: Dynamic Regulation in a New Institutional Economics Framework

Festschrift in Honor of Christian Kirchner, 2013


The literature on New Institutional Economics (NIE) evaluates the relationship between public and private rulemaking in the evolution of law. This paper introduces the concept of dynamic regulation as an optimization process for the learning experience in the NIE framework. Dynamic regulation describes intra- and inter-jurisdictional feedback effects between different public rulemakers and between private and public rulemakers. Dynamic elements in the rulemaking process may increase the availability of relevant information for rulemaking and may improve institutional design.

Dynamic Regulation of the Financial Services Industry

Wake Forest Law Review, 2014


Governance adjustments via stable rules in reaction to financial crises are inevitably followed by relaxation, revision, and retraction. The economic conditions and the corresponding requirements for optimal and stable rules are constantly evolving, suggesting that a different set of rules could be optimal. Despite the risk of future crises, anticipation of future developments and preemption of possible future crises do not play a significant role in the regulatory framework and academic literature. Dynamic elements in financial regulation as a supplemental optimization process for rulemaking could help facilitate rulemaking when it is most needed – ex-ante before crises – to curtail the effects of crises and suboptimal regulatory outcomes – ex-post after crises. By including dynamic elements, the regulatory sine curve of financial regulation could be optimized in relation to the phase-shifted first derivative (cosine curve) that describes common elements of financial crises. Dynamic regulation could help dampen the degree of volatility of both the cosine curve and the regulatory sine curve by creating an anticipatory regulatory response to financial crises.

Dynamic Regulation via Governmental Contracts

Liber Amicorum Peter Nobel, 2014


Dynamic elements can be included in the rulemaking process through intra- and inter-jurisdictional feedback effects that improve the availability and quality of information for rulemaking. Key features associated with governmental contracts, such as the corporate wrongdoers’ self-reporting, preemptive remedial measures instituted by the entity to avoid corporate criminal indictment, and the government’s investigation of specific corporate wrongdoing, facilitate multilevel feedback effects that increase the availability and quality of information for rulemaking. Governmental contracts can thus integrate dynamic elements in rulemaking.

The Effect of Deferred and Non-Prosecution Agreements on Corporate Governance: Evidence from 1993-2013

Wulf A. Kaal

University of St. Thomas, Minnesota – School of Law; European Corporate Governance Institute (ECGI)

Timothy Lacine

University of St. Thomas (Minnesota)

The Business Lawyer , Vol. 70, 2014


Non- and Deferred Prosecution Agreements (N/DPAs) are controversial because prosecutors, not judges or the legislature, are changing the governance of leading public corporations and entire industries. To analyze N/DPAs’ corporate governance implications and provide policy makers with guidance, the authors code all publicly available N/DPAs (N=271) from 1993 to 2013, identifying 215 governance categories and subcategories. The authors find evidence that the execution of N/DPAs is associated with significant corporate governance changes. The study categorizes mandated corporate governance changes for entities that executed an N/DPA as follows: (1) Business Changes, (2) Board Changes, (3) Senior Management, (4) Monitoring, (5) Cooperation, (6) Compliance Program, and (7) Waiver of Rights. The authors supplement the analysis of governance changes in these categories with a more in depth evaluation of the respective subcategories of governance changes. The authors also code and analyze preemptive remedial measures, designed by corporations to preempt the execution of an N/DPA or corporate criminal indictment. The paper evaluates the implications of the empirical evidence for boards, management, and legal practitioners.

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