Research

Chris Brummer’s research primarily focuses on how international economic law is devised and how it impacts the integrity, safety and soundness of the global financial system.  In Professor Brummer’s view, each of the key strands of international economic law—whether it be international monetary law, trade, financial regulation or tax—often inform one another.  How a country conducts its financial regulation, and the intensity of its enforcement of rules will impact how monetary policy is devised.  Monetary policy can in turn impact foreign exchange rates. Foreign exchange rates can in turn impact trade, which likewise will affect the revenues of tax policy.  All the while, economic authorities all stripes will inform and are informed by the choices and preferences of their domestic and international counterparts.  Professor Brummer’s research thus espouses a deeply interdisciplinary vantage point informed by diverse disciplines and methodologies.

Professor Brummer also has a longstanding interest in technology and financial innovation, especially as they impact entrepreneurs and investors.  Along with his work in the regulatory community, he has hosted events for entrepreneurs nationally and in Washington, D.C., to better understand the financing needs and business operations of Millenial firms and growing fintech firms.

The Renminbi and Systemic Risk

Abstract

The internationalization of China’s currency, the renminbi (“RMB”), is arising in ways that depart considerably from historical precedent and what “law and macroeconomic” theory would predict. Instead of waiting for international markets for its currency to evolve organically, the Chinese government has undertaken a quasi-mercantilist strategy designed to promote the currency and its own national RMB-based infrastructure. This strategy has emphasized tightly managed capital account deregulation over prudential reforms and robust market supervision, and incentivizes foreign jurisdictions to compete for RMB-based transactions.

China’s monetary strategy introduces novel systemic risks to the global financial system, including a potentially inadequate provision of renminbi liquidity, a regulatory race to the bottom between offshore RMB-hubs, and significant transmission belts of financial risk to even non-renminbi markets. To mitigate these risks, this Article outlines a policy recipe of stronger macroprudential oversight, transparent countercyclical capital account reforms and credible commitments to refrain from competitive currency devaluations.

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