1 00:00:01,920 --> 00:00:05,610 Okay. So would you like to start by saying your name and your time? 2 00:00:05,880 --> 00:00:11,430 Sure. I'm Kristen Van Sweetnam in the law faculty here at Oxford, and my title is Professor of Law and Finance. 3 00:00:11,790 --> 00:00:16,050 Wonderful. And without telling me your entire life story, 4 00:00:16,710 --> 00:00:23,850 but just going from where you first got interested in the subject or interested in now to how you got to be here in Oxford? 5 00:00:24,450 --> 00:00:27,850 Sure. I'll do my best to make this a short story. 6 00:00:27,870 --> 00:00:30,120 Well, I never intended to become an academic, 7 00:00:30,540 --> 00:00:38,580 so I grew up in Australia and I did my undergraduate studies in Australia and I only came to Oxford because I 8 00:00:38,940 --> 00:00:45,989 received a scholarship called this Robert Menzies in Law Scholarship that enabled me to do the Bachelor of Civil Law, 9 00:00:45,990 --> 00:00:50,250 the BCL degree, which is a taught degree, and then the MPHIL, 10 00:00:50,250 --> 00:00:54,420 which is a one year the master of philosophy and law degree, which is a one year research degree. 11 00:00:54,810 --> 00:01:01,920 And it was in doing that second degree that I discovered how much I enjoyed research. 12 00:01:02,730 --> 00:01:08,790 And so I applied to stay on here to do the dphil and thought of becoming a practising lawyer. 13 00:01:08,800 --> 00:01:14,190 Yes, I had planned to go I planned to do what many people plan to do when you graduate in Sydney, 14 00:01:14,190 --> 00:01:17,910 which was to to go to the bar and be a barrister in Sydney. 15 00:01:18,300 --> 00:01:27,120 And I really had no I think I had no idea what it even meant really to, to be an academic or to do research as your job. 16 00:01:27,540 --> 00:01:34,590 And it was only really being here and in particular having that chance to do that one year research degree, 17 00:01:34,800 --> 00:01:38,040 which I never would have been able to do without full funding. 18 00:01:38,730 --> 00:01:42,900 That is what opened my eyes to what it means to to be a researcher. 19 00:01:43,320 --> 00:01:50,640 And I could see more clearly than I could as an undergraduate what academics did and why what they did was exciting. 20 00:01:51,360 --> 00:01:58,800 And so, yeah, then I stayed in Oxford. I was again very fortunate to get funding to stay, this time from the Clarendon Scholarship Fund. 21 00:01:59,190 --> 00:02:06,090 And so I stayed in Oxford for the Dphil and my dphil was on corporate insolvency law in India. 22 00:02:06,360 --> 00:02:11,430 So I had become interested in corporate insolvency or what you might call corporate bankruptcy law. 23 00:02:12,150 --> 00:02:18,990 When I was in Sydney and I worked for, for a judge who was then the head of the corporations list in the New South Wales Supreme Court. 24 00:02:19,350 --> 00:02:28,170 I then studied that subject here in Oxford on the postgraduate talk program, the BCL, and then made that the focus of my mphil in dphil studies. 25 00:02:28,680 --> 00:02:36,540 And at that time I was and I remain very interested in understanding the operation of these rules in what is sometimes called emerging markets. 26 00:02:37,140 --> 00:02:44,340 And so I focussed in that research project on India and halfway through that process I 27 00:02:44,340 --> 00:02:48,540 decided actually that I'd quite like to have the opportunity to do research for a job. 28 00:02:48,870 --> 00:02:50,879 And after I finished the Dphil, 29 00:02:50,880 --> 00:02:57,990 I then applied for my first academic job and I went to Cambridge and I was there for two years and then I came back here to Oxford. 30 00:02:58,590 --> 00:03:01,590 I hope that's short enough. That's brilliant. Absolutely perfect. 31 00:03:01,890 --> 00:03:06,240 So what they said was one sort of overarching question that gets you back to bed in the morning. 32 00:03:06,240 --> 00:03:15,180 What would you say? Well, how does law and legal institutions so how do laws and legal institutions impact? 33 00:03:16,860 --> 00:03:20,250 Transactions in the real economy. And in particular, 34 00:03:20,370 --> 00:03:29,910 how do laws and legal institutions influence the decision to pursue entrepreneurial projects and the ability to do that in the real world? 35 00:03:30,180 --> 00:03:33,180 So people have a good idea, an entrepreneur has a good idea, 36 00:03:33,930 --> 00:03:39,810 but will that idea ever be pursued, turned into a project that could be beneficial for society? 37 00:03:40,050 --> 00:03:47,400 So my overarching research interest is in how laws and the legal institutions that support laws such as courts. 38 00:03:48,390 --> 00:03:55,650 How does that bundle of rules and norms influence the ultimate decision of the entrepreneur 39 00:03:55,920 --> 00:03:59,639 about whether or not to pursue a project that could be beneficial to society? 40 00:03:59,640 --> 00:04:06,520 For that project, that idea is pursued and their ability to do so very, very succinctly. 41 00:04:06,990 --> 00:04:12,960 Well, I mean, I think that's what most corporate bankruptcy scholars and corporate law scholars are ultimately interested in understanding. 42 00:04:13,100 --> 00:04:17,160 Mm hmm. Mm hmm. And what sort of methodology do you pursue that? 43 00:04:17,640 --> 00:04:25,469 So I work mostly in corporate bankruptcy law, so my broad interest is in what's sometimes called law and finance. 44 00:04:25,470 --> 00:04:34,830 So the interaction between legal rules and institutions on the one hand, and access to finance and the decision to take on finance on the other. 45 00:04:35,160 --> 00:04:41,970 And I work in a sort of specific area of law mostly at the moment, which is called corporate bankruptcy or corporate insolvency law. 46 00:04:42,900 --> 00:04:50,580 And that area looks at or tries to understand how businesses that prove unable to pay all their debts, 47 00:04:50,580 --> 00:04:54,240 to meet all their obligations, how they should be treated by it, by the state. 48 00:04:54,450 --> 00:04:58,320 I'm just wondering about how you gather data. Yep. So in terms of methodology. 49 00:04:59,100 --> 00:05:04,410 So I suppose I would say that I'm a mixed method scholar. 50 00:05:05,610 --> 00:05:13,379 So some of the work that I do is what's sometimes called by legal scholars to be 51 00:05:13,380 --> 00:05:20,790 doctrinal work or what others might call internal analysis or analytical work. 52 00:05:20,790 --> 00:05:26,760 And what that basically means is approaching a body of rules from the perspective of an insider, 53 00:05:26,970 --> 00:05:36,060 someone who understands how the primary sources of law are to be interpreted in accordance with the conventions that that system imposes. 54 00:05:36,510 --> 00:05:43,110 And then working out how you fit those rules together and making claims about the optimal way in which 55 00:05:43,110 --> 00:05:48,810 those rules could be better reconciled or further developed in a world in which laws constantly change. 56 00:05:49,500 --> 00:05:57,090 But again, from the perspective of an insider, so appreciating the limitations that govern the behaviour of each of the players in the 57 00:05:57,090 --> 00:06:03,120 system and essentially abiding by the fundamental rules of the game within the system, 58 00:06:03,120 --> 00:06:06,419 that's what internal or doctrinal work is about. 59 00:06:06,420 --> 00:06:11,010 So some of my work is, is that and that involves basically working with primary sources of law, 60 00:06:11,340 --> 00:06:14,910 particularly cases, but also to some extent statutory provisions, 61 00:06:15,270 --> 00:06:20,639 trying to work out the proper interpretation and to make claims about how they 62 00:06:20,640 --> 00:06:25,350 might be best organised or developed with regard to underlying principles. 63 00:06:25,560 --> 00:06:35,310 So I do some of that work, but because my overarching interest is in trying to work out whether the rules are socially desirable or not, 64 00:06:35,550 --> 00:06:41,760 then that implies that you have to have regard to insights from other disciplines that can help us to work out what 65 00:06:42,180 --> 00:06:48,030 really happens in the real world when a particular rule is applied in the way that you've suggested it be applied. 66 00:06:48,600 --> 00:06:50,490 So I'm not an empiricist myself, 67 00:06:51,030 --> 00:06:59,280 but that means that I have to have a good working understanding of empirical work on the impact of laws in the real world. 68 00:06:59,970 --> 00:07:06,629 And it also means I'm interested in collaborative work so that projects in interdisciplinary collaborative work. 69 00:07:06,630 --> 00:07:12,209 So the project we're going to talk about today is one which involves two people from the law faculty, 70 00:07:12,210 --> 00:07:18,120 me and my colleague Horst Ottumwa, and then an economist from the Side Business School here in Oxford. 71 00:07:18,690 --> 00:07:25,980 And that's been very fruitful in terms of setting the overall direction of the project. 72 00:07:26,340 --> 00:07:34,830 But it's also enabled me in this project to work with some methods which I wouldn't be able to work with on my own because I lack the skill set, 73 00:07:35,070 --> 00:07:39,750 but I can do with a colleague. So I think I'm a mixed method scholar. 74 00:07:40,620 --> 00:07:46,340 I'm not sure that's a very clear answer, but it's the best I can do. And I'm. 75 00:07:54,290 --> 00:07:58,400 So yes, I've written a question here, but it may just show my ignorance and. 76 00:08:00,240 --> 00:08:08,879 And how how does how would you assess the relationship between and I put government policy but it's not just 77 00:08:08,880 --> 00:08:14,980 government policy is it because this case law as well this bundle of of rules and and regulation yeah. 78 00:08:15,360 --> 00:08:22,230 On cases interact with corporate insolvency in let's say in normal times this dealt with. 79 00:08:22,620 --> 00:08:26,010 Yeah this is not a silly question. It's actually a very hard question. 80 00:08:26,670 --> 00:08:30,570 So excuse me. So I should do my best to answer it. 81 00:08:31,410 --> 00:08:37,379 So in, in theory, 82 00:08:37,380 --> 00:08:43,770 you might say that governments could start with a blank slate in terms of how they might decide to treat 83 00:08:43,770 --> 00:08:51,929 businesses or entrepreneurs that have become unable to pay the debt to repay the loans that they've taken on. 84 00:08:51,930 --> 00:09:00,150 You might say, well, anything in theory is available to governments. That's not quite right, because actually most governments around the world, 85 00:09:00,270 --> 00:09:07,140 subject to constitutional or human rights constraints, which govern protection of property. 86 00:09:07,470 --> 00:09:09,299 And that means that to some extent, 87 00:09:09,300 --> 00:09:17,340 governments need always to be thinking about how the rules that they design give due regard for protection of property rights. 88 00:09:17,340 --> 00:09:25,169 And of course, the problem, the key question of interest in any case in which a business is insolvent is what should 89 00:09:25,170 --> 00:09:29,790 a government do about that in circumstances in which there won't be enough to go around? 90 00:09:30,030 --> 00:09:36,419 Right. So how can a government give effect to or give due regard to the protection of private property in circumstances 91 00:09:36,420 --> 00:09:41,159 where you won't be paid in full and you can't be because there just aren't enough assets by definition. 92 00:09:41,160 --> 00:09:46,139 So this is both the property of the business owner and the property of the creditors. 93 00:09:46,140 --> 00:09:48,390 Yeah, yeah. In theory, yes. 94 00:09:48,390 --> 00:09:56,700 But in practice, we tend to say that once a business has reached a point where it's not able to pay all of its debts in full, 95 00:09:56,850 --> 00:10:00,239 we tend around the world to regard the state, 96 00:10:00,240 --> 00:10:07,920 the assets that are there that are of value as essentially now to be given in some way, in most cases, over to the creditors. 97 00:10:07,920 --> 00:10:14,459 Right, to those who've been promised payment. But we know that even if we do that in full, we won't be able to pay all of them. 98 00:10:14,460 --> 00:10:20,580 And the hard question is, what should we do about that, of course, when it comes to individuals rather than corporations? 99 00:10:20,580 --> 00:10:22,320 So an individual entrepreneur, 100 00:10:22,680 --> 00:10:29,040 we also know that there are some kinds of property that we don't think it's desirable be taken from the individual bankrupt. 101 00:10:29,250 --> 00:10:33,930 So all legislative regimes around the world allow individuals to keep some things. 102 00:10:34,110 --> 00:10:39,240 But there is divergence, significant divergence on, for example, whether or not that includes a person's home. 103 00:10:39,810 --> 00:10:49,560 But these are hard questions for policymakers. So in pre-pandemic times, what states tended to do, speaking as a crude generalisation, 104 00:10:50,130 --> 00:10:57,720 is to have on the statute book one or more procedures which were designed to bring all those who are owed money 105 00:10:57,720 --> 00:11:04,320 by the debtor or creditors into a single procedure in which they would participate on a collective basis. 106 00:11:04,680 --> 00:11:08,520 And the idea of such a procedure is is twofold. 107 00:11:08,820 --> 00:11:17,130 So one is by bringing everyone together into a single collective procedure, you can enable any value in the estate to be better preserved, 108 00:11:17,670 --> 00:11:23,400 provided the procedure works reasonably well than if you let individual creditors grab and dismember. 109 00:11:23,790 --> 00:11:28,410 So you bring everyone together so that if there's value in the estate, you might be able to preserve that. 110 00:11:29,160 --> 00:11:33,780 But you also bring everyone together so that when it comes to carving up the pie, 111 00:11:34,200 --> 00:11:40,530 you can decide on a distribution which accords with the states conception of what would be an equitable, 112 00:11:40,650 --> 00:11:47,040 fair distribution, rather than letting those who are most powerful or most informed grab first, 113 00:11:47,040 --> 00:11:51,870 which we would expect to be the position without the imposition of that collective procedure. 114 00:11:52,230 --> 00:12:01,920 So in normal times, governments didn't tend in most jurisdictions, at least the ones that I work in, to intervene very much, if at all. 115 00:12:02,250 --> 00:12:07,440 In the case of an individual business that proved itself unable to pay its debts, 116 00:12:07,650 --> 00:12:11,970 governments tend in normal times to entrust the treatment of that business. 117 00:12:12,210 --> 00:12:18,570 The decision about what to do with the assets and how the pie is to be carved up to the normal bankruptcy law, 118 00:12:18,780 --> 00:12:23,060 which will set out this collective procedure and will make some rules or 119 00:12:23,130 --> 00:12:27,330 priority rules about who gets to be first in the queue and second in the queue. 120 00:12:27,540 --> 00:12:31,139 When it comes to carving up the estate, this not people going into administration. 121 00:12:31,140 --> 00:12:34,140 Exactly what administration is one English procedure? 122 00:12:34,140 --> 00:12:37,650 Absolutely. In the U.S. you might go into something called Chapter 11. 123 00:12:37,650 --> 00:12:43,650 So there are different labels, but basically there is lots in common with these procedures around the world. 124 00:12:44,040 --> 00:12:49,590 And unless a firm was particularly systemically important, 125 00:12:49,980 --> 00:12:53,760 so putting aside financial institutions for now and just thinking about firms in 126 00:12:53,760 --> 00:12:58,740 the real economy unless a firm the failure of a firm was likely to have really. 127 00:12:58,860 --> 00:13:05,760 Significant social ramifications, for example, because of its size or its interconnectedness with other firms in the economy. 128 00:13:06,000 --> 00:13:12,270 Governments would tend not to intervene on an individual business basis if they wanted to change the overall regime. 129 00:13:12,450 --> 00:13:18,960 Then they would reform the bankruptcy law and they wouldn't be interested in individual firms value that would be left to the general bankruptcy law. 130 00:13:19,350 --> 00:13:23,820 So what happened in the COVID pandemic was that governments changed and changed course. 131 00:13:24,120 --> 00:13:28,320 I just want to ask you some more questions. Shall we go on to the actual research? 132 00:13:28,650 --> 00:13:33,120 So, right, you brought us very neatly up to the start of the pandemic. 133 00:13:33,360 --> 00:13:42,840 So now I'm just going back to you as an individual. Can you remember how you first heard that there was a pandemic, that something was happening? 134 00:13:43,650 --> 00:13:46,860 And how long did it take you to realise that actually that was. 135 00:13:48,190 --> 00:13:52,750 Going to work is going to be a threat to everybody, but it's also going to be an opportunity as far as your associates. 136 00:13:53,320 --> 00:14:00,400 Yeah, good question. I do remember the early period where there was not yet a work from home instruction, 137 00:14:01,060 --> 00:14:10,150 but we were all anxiously watching the news every day and each person had to make a sort of individual assessment 138 00:14:10,150 --> 00:14:16,700 about the extent to which they continued to go about life and the extent to which they tried to stay home. 139 00:14:16,720 --> 00:14:22,120 To the extent, though, that that was possible, and I think that was probably about a month long period, wasn't it, 140 00:14:22,120 --> 00:14:31,510 where there was increasing coverage and growing concern, but we weren't yet given much guidance by the state about what to do. 141 00:14:32,530 --> 00:14:41,290 So I think at some point I and all my colleagues shifted to working from home before we were asked to do that. 142 00:14:41,980 --> 00:14:49,690 But we all did. So, you know, on a slightly different day. Having regard to what we were thinking and learning from from the news. 143 00:14:51,010 --> 00:14:56,980 And what was your other question? What about the opportunity? When did I realise it was an opportunity for research? 144 00:14:58,330 --> 00:15:03,880 I think pretty early on it was clear that the pandemic was going to be important from a bankruptcy law perspective. 145 00:15:04,360 --> 00:15:13,480 And the reason for that is if you have a lockdown, which is not something that I had obviously ever experienced in my lifetime, 146 00:15:13,600 --> 00:15:17,260 and it's not really something that scholarly literature talks about. 147 00:15:17,500 --> 00:15:22,330 Right. So, of course, there have been pandemics in the past, but not in recent history. 148 00:15:22,780 --> 00:15:31,270 And so but if you have such an order and if the state in particular requires the closure of particular businesses to in-person trade, 149 00:15:31,870 --> 00:15:38,170 then it's pretty obvious that for at least some of those businesses, there's going to be a very imminent bankruptcy threat, 150 00:15:38,410 --> 00:15:41,739 not for all businesses, because some businesses could pivot to online. 151 00:15:41,740 --> 00:15:51,220 Other businesses could repurpose plant and equipment so that they could start producing essential health care supplies for the NHS. 152 00:15:51,460 --> 00:15:53,920 But they were obviously going to be some businesses, 153 00:15:54,190 --> 00:16:01,030 likely a large number of businesses who pretty early on in the lockdown would face a risk of bankruptcy. 154 00:16:01,330 --> 00:16:07,320 And the reason for that is that they wouldn't be able to generate revenue, but they'd likely still have some fixed costs. 155 00:16:07,330 --> 00:16:09,400 And those fixed costs would continue to accrue. 156 00:16:09,730 --> 00:16:18,460 So unless they were covered by business disruption insurance and it seemed pretty clear early on that there was a lot of uncertainty about this. 157 00:16:18,790 --> 00:16:28,269 And by halfway through the first year, it was pretty clear that businesses would not be fully covered by business disruption insurance. 158 00:16:28,270 --> 00:16:36,130 So if you're not covered by insurance and unless you have very significant cash reserves, then for so long as you have fixed costs, 159 00:16:36,220 --> 00:16:39,400 like paying your rent or paying licence fees, 160 00:16:39,760 --> 00:16:47,560 paying employees under contracts where wage entitlements accrue every month, all of those costs will continue to accrue. 161 00:16:47,590 --> 00:16:56,380 And in the absence of revenue, you'll exhaust your cash reserves and then you won't have cash to be able to pay you all your ongoing liabilities. 162 00:16:56,650 --> 00:17:05,950 So bankruptcy cycle is, I think, worked out pretty quickly that there was going to be a non trivial number of 163 00:17:05,950 --> 00:17:12,460 businesses who would be at risk of bankruptcy within say a three month period. 164 00:17:13,630 --> 00:17:18,610 And the question was what should be done about that? And that's the question that motivated this project. 165 00:17:18,970 --> 00:17:23,440 And I think we began working on it very early in the first wave. 166 00:17:24,310 --> 00:17:27,340 And I think in general that was quite a productive time for me. 167 00:17:27,340 --> 00:17:33,309 Early on in the first wave I think there was some I think several of my colleagues 168 00:17:33,310 --> 00:17:36,940 experienced shifting environments from working in the office to working from home. 169 00:17:37,300 --> 00:17:44,200 But before it became obvious what the gravity of the threat was and the overall cost of the pandemic was, 170 00:17:44,530 --> 00:17:48,220 that was a productive time for me in terms of thinking about policy ideas. 171 00:17:48,850 --> 00:17:54,370 I think that's less true the longer the pandemic went on, because it was a very stark, 172 00:17:55,060 --> 00:18:00,640 sort of horrifying period the first year really before in the pre-vaccination period. 173 00:18:00,970 --> 00:18:09,070 So I don't think I remained as productive for very long, but early on there was a sense in which all options were on the table. 174 00:18:09,490 --> 00:18:17,620 They mattered a lot in the real world, and the gravity of the threat and also its duration was not yet known to us. 175 00:18:18,160 --> 00:18:24,729 And did you immediately have a sense that there was a collective response among fellow academics in the saying, 176 00:18:24,730 --> 00:18:27,730 yes, this was something that needed looking at? Yeah. 177 00:18:27,730 --> 00:18:35,260 I mean, I think I'm quite fortunate to be working here because I'm in a very cohesive research group where we're all interested in, 178 00:18:35,290 --> 00:18:40,990 I think it's fair to say, working with each other, and we tend to try to collaborate anyway. 179 00:18:41,890 --> 00:18:47,620 And in the case of this particular project I had already been collaborating with. 180 00:18:47,800 --> 00:18:50,920 Both of the other members of the team in the past. 181 00:18:51,190 --> 00:18:55,360 So it was a natural fit to do this together. Oh, so they even beat. 182 00:18:55,360 --> 00:18:59,300 I'm sorry. I forgot his name. The Economist? Yes. It already started. 183 00:18:59,320 --> 00:19:09,160 Yeah. I mean, Professor Sussman and I had already been working on a couple of other ideas in the 12 months leading up to the pandemic. 184 00:19:10,660 --> 00:19:18,250 But they were put to one side to do the COVID project because it was urgent and important in the real world. 185 00:19:18,280 --> 00:19:21,790 So we still have our other projects and I hope we do them next year. 186 00:19:22,990 --> 00:19:28,510 So how did you set about collecting the information that you were going to report and 187 00:19:28,810 --> 00:19:34,090 that what what were the steps you needed to take to do the project that you've done? 188 00:19:34,330 --> 00:19:41,830 Okay. So the first stage of the project was a sort of theoretical stage where we tried to understand the nature of the problem, 189 00:19:41,830 --> 00:19:45,370 confront confronting governments, confronting policymakers. 190 00:19:46,720 --> 00:19:50,890 Was there a case for governments to do anything at all in theory, 191 00:19:51,280 --> 00:19:59,470 or could it just be that all these newly distressed businesses could be left to be treated by the pre-pandemic bankruptcy law, 192 00:19:59,590 --> 00:20:06,909 just as in normal times? So the most important thing to do is to the outset was to check our assumption that 193 00:20:06,910 --> 00:20:10,150 there was even a case for governments to consider extraordinary intervention. 194 00:20:10,630 --> 00:20:19,990 So in the first theoretical paper to come out of the project, we explained why in theory there was a case for governments to intervene. 195 00:20:20,740 --> 00:20:33,700 We explained why it was very unlikely that entrusting businesses to be treated by the pre-pandemic bankruptcy law would be socially desirable. 196 00:20:34,090 --> 00:20:38,139 And that was not just because there were going to be loads and loads of businesses that would potentially 197 00:20:38,140 --> 00:20:42,940 need treatment and maybe this would overwhelm the courts or the insolvency practitioners involved. 198 00:20:43,420 --> 00:20:49,390 But also because in our view, bankruptcy laws of the kind that I described a few minutes ago, 199 00:20:49,750 --> 00:20:57,040 very a very poor fit for the peculiar features of COVID 19 related distress. 200 00:20:57,520 --> 00:21:07,390 So in normal times, bankruptcy laws, to the extent they permit you to continue to trade in the process, assume that you were only continuing to trade. 201 00:21:08,740 --> 00:21:16,840 So in in normal times, there'll be a decision to make about whether or not you can continue to trade in a bankruptcy process, 202 00:21:17,170 --> 00:21:22,030 and you'd normally only be able to continue to do that if the revenue that's 203 00:21:22,030 --> 00:21:26,800 expected to be generated by continuing trading is going to exceed your fixed costs. 204 00:21:27,190 --> 00:21:30,819 So if you can't generate revenue sufficient to cover your fixed costs, 205 00:21:30,820 --> 00:21:34,660 then in normal times the state would say, this doesn't seem like a viable business. 206 00:21:34,930 --> 00:21:41,649 This is one that would be better closed early with the proceeds or excuse me realised 207 00:21:41,650 --> 00:21:47,470 and distributed as expeditiously as possible to try to minimise loss to creditors. 208 00:21:47,920 --> 00:21:52,030 But of course in COVID times we had to think in exactly the opposite way. 209 00:21:52,360 --> 00:21:57,700 So the real problem for these businesses was that they were temporarily paralysed from 210 00:21:57,700 --> 00:22:02,350 generating revenue at all in those sectors that were affected by a trading shutdown. 211 00:22:02,950 --> 00:22:08,559 So it was not going to work to put those businesses into a process that was premised on 212 00:22:08,560 --> 00:22:14,080 the ability to continue to generate revenue and to pay your fixed costs along the way. 213 00:22:14,830 --> 00:22:18,400 Now, of course, policymakers could say, well, that's fine, 214 00:22:18,430 --> 00:22:28,210 I'll just tinker with the bankruptcy rules or just change them so that they're better designed to reflect the features of COVID 19 distress. 215 00:22:28,580 --> 00:22:37,150 But we thought that in theory, that that was a bad idea because it was likely to produce bankruptcy rules, 216 00:22:37,780 --> 00:22:44,920 which might be sort of okay for COVID times, but would be bad in normal times. 217 00:22:45,310 --> 00:22:48,459 Right. So as we exited from the pandemic, 218 00:22:48,460 --> 00:22:52,330 what we didn't want to see was a body of bankruptcy rules that have been 219 00:22:52,330 --> 00:22:59,080 changed in in non temporary ways to accommodate the weirdness of the pandemic, 220 00:22:59,440 --> 00:23:03,640 but ended up actually serving businesses poorly in the post-pandemic period. 221 00:23:04,150 --> 00:23:10,390 So it seemed to us that was a case for governments to intervene, to try to minimise the amplification of the shock. 222 00:23:10,690 --> 00:23:16,059 There was nothing that policymakers could do to recover that revenue that was lost in a period of trading shutdown. 223 00:23:16,060 --> 00:23:18,130 No one can magic that and recover that. 224 00:23:18,580 --> 00:23:25,930 But governments did have good reason to try to intervene to minimise the additional costs on top of that revenue 225 00:23:25,930 --> 00:23:32,320 loss that would flow from each of the affected businesses and sectors being pushed into financial distress. 226 00:23:32,740 --> 00:23:36,879 Having established that, the question was, Well, what's on the table for policymakers? 227 00:23:36,880 --> 00:23:41,530 If they're not going to use pre bankruptcy, pre-pandemic bankruptcy law, what can they do? 228 00:23:41,770 --> 00:23:47,200 So in this early stage of the project, we mapped the options and in short, we said, well, this. 229 00:23:47,660 --> 00:23:55,160 There's three things policymakers can do. They can rely on pre-pandemic bankruptcy law, which we said for the reasons I've given, was a bad idea. 230 00:23:55,910 --> 00:24:03,650 They can offer bailouts. That is, taxpayer funded cash, loans or other forms of benefits designed to keep businesses. 231 00:24:05,060 --> 00:24:14,210 Excuse me. Excuse me afloat. Or they can impose bail ins. 232 00:24:14,600 --> 00:24:25,760 That is, they can try to ask those private creditors who are capable of shouldering losses to bear some of the losses straight away. 233 00:24:27,140 --> 00:24:36,020 Now, we argued in our first theoretical paper that there were costs and benefits of using either bailing out or bailouts. 234 00:24:36,800 --> 00:24:41,960 But there were some principles that should guide policymakers in choosing between them and in their design, 235 00:24:42,320 --> 00:24:50,990 including that any intervention had to be proportionate, do more, no more than was necessary to minimise the amplification of the shock. 236 00:24:52,010 --> 00:24:58,910 So we set out what was on the table and we tried to articulate some principles to help policymakers to make this choice. 237 00:24:59,390 --> 00:25:04,820 And then, of course, our attention turned to what they actually did. And that's the next stage of the project that you asked me about. 238 00:25:05,090 --> 00:25:10,400 So did your theoretical work feed into government decision making in any way? 239 00:25:10,940 --> 00:25:20,720 So at the time that that work was published, governments had already intervened in some ways in the first wave. 240 00:25:20,750 --> 00:25:30,770 So in that sense, no. However, we were invited to present that paper to institutions that are involved in policy. 241 00:25:31,430 --> 00:25:41,960 And I think it is right to say that that paper has influenced debate about the optimal design of pandemic relief for distressed businesses. 242 00:25:42,260 --> 00:25:48,290 So I cannot point you to a direct application of that paper in a particular piece of legislation, 243 00:25:48,680 --> 00:25:57,350 but I think it has had influence in in the debate around what governments ought to have done and whether what they did do was desirable. 244 00:25:57,860 --> 00:26:01,850 So a bit of a fluffy answer. But yeah, I mean, 245 00:26:03,770 --> 00:26:11,690 I suppose the better answer to your question is governments didn't have time to consult anyone in the first early part of the pandemic. 246 00:26:11,690 --> 00:26:18,530 And the evidence of this is is everywhere in terms of the way in which policies were designed. 247 00:26:18,530 --> 00:26:27,650 They were introduced using emergency powers, often without the usual cost benefit analysis that would accompany major legislative change. 248 00:26:28,070 --> 00:26:38,090 So no, in normal times, governments in many jurisdictions can't make significant changes without what's called a regulatory impact assessment, 249 00:26:38,090 --> 00:26:42,169 where they have to undertake an analysis of the costs and benefits, 250 00:26:42,170 --> 00:26:48,680 usually with consultation that might involve consultation with committees on which academic which have academic members, 251 00:26:49,100 --> 00:26:51,550 which could go on for years, which can go on for years. 252 00:26:51,560 --> 00:26:58,460 And the idea is to quantify to the greatest extent possible, the costs and benefits of the proposed government intervention. 253 00:26:58,850 --> 00:27:04,460 And then if you think that the costs are likely to exceed the benefits to understand why you're doing it anyway, 254 00:27:04,830 --> 00:27:06,379 you may have a good reason for doing it, 255 00:27:06,380 --> 00:27:15,080 but you're forced to go through a sort of a methodology before you get to the point of of making a change in significant legislative reform. 256 00:27:15,650 --> 00:27:25,160 And in the early pandemic, governments were faced with a monumental crisis, and they had to do their best. 257 00:27:25,160 --> 00:27:33,020 And I think in many policymakers were unsure, doing their best, but they had to do this with very limited information, 258 00:27:33,020 --> 00:27:37,489 with no ability really to predict how long the pandemic would go on for and 259 00:27:37,490 --> 00:27:43,070 what the ultimate scale of the of the human of the cost into life would be. 260 00:27:43,970 --> 00:27:45,140 So they had to do their best. 261 00:27:45,380 --> 00:27:54,050 And I definitely don't think they had much, you know, ability to go and consult us working away now in our bedrooms in Oxford. 262 00:27:54,710 --> 00:28:01,160 So yeah, I suppose I think it's had an impact on how we think about and try to evaluate what governments did, 263 00:28:01,370 --> 00:28:04,909 but it didn't impact what governments were doing early on in that first wave. 264 00:28:04,910 --> 00:28:08,750 And I'm not sure it really it could have given the circumstances. 265 00:28:09,380 --> 00:28:13,960 So you went on to look at what governments. Yeah. So then we wanted to know what governments actually did. 266 00:28:13,970 --> 00:28:21,500 And at the time we thought this would be relatively straightforward because we had no sense of how long 267 00:28:21,500 --> 00:28:29,060 the pandemic would go on for and of the complexity of the government response as a as a corollary. 268 00:28:29,480 --> 00:28:41,500 So we said we would we applied for funding from the COVID 19 Research Response Fund to appoint a group of research assistants. 269 00:28:41,610 --> 00:28:45,320 Oxford based. Yeah, it's a philanthropy funded. 270 00:28:47,610 --> 00:28:54,030 EU funding, which set up by philanthropists interested in supporting COVID 19 research at Oxford. 271 00:28:54,330 --> 00:28:59,130 And without that funding, we wouldn't have been able to do this. The empirical part of the project at all. 272 00:28:59,430 --> 00:29:05,730 So we're very grateful to have that funding. So the idea was that we would appoint a group of research assistants who would go out, 273 00:29:06,780 --> 00:29:13,499 who would work on jurisdictions with which they're already familiar, because the three of us in the project team, 274 00:29:13,500 --> 00:29:21,060 the three academics, we each had knowledge and experience of the corporate bankruptcy laws of a small number of jurisdictions, 275 00:29:21,390 --> 00:29:26,310 but we wanted to go beyond the jurisdictions that we normally work within. 276 00:29:27,000 --> 00:29:35,400 And we knew we couldn't ask a non-specialist to do that because laws, legal systems are complex systems. 277 00:29:36,090 --> 00:29:39,120 So you can't really ask outsiders to those systems. 278 00:29:39,120 --> 00:29:45,060 Realistically, I don't think to get granular information about what's happening within that system during an emergency. 279 00:29:45,420 --> 00:29:50,960 So the idea was we would appoint research assistants who they'd be based in these overseas. 280 00:29:51,420 --> 00:29:54,720 Know actually most of our research assistants were based here. 281 00:29:54,810 --> 00:30:01,080 But we're very fortunate in Oxford that our postgraduate community is extremely geographically jurisdictional. 282 00:30:01,200 --> 00:30:11,700 Is that a word, diverse? And so we were pretty confident that given the project had real world significance and given we have this incredible body of, 283 00:30:13,170 --> 00:30:20,760 you know, highly capable postgraduate students in the law faculty that we would be able to put together this team. 284 00:30:20,760 --> 00:30:28,470 And we were very lucky. We had loads of fantastic people apply who had expertise in various jurisdictions. 285 00:30:28,830 --> 00:30:33,000 So we had to be a little bit relaxed about which jurisdictions we focussed on, 286 00:30:33,000 --> 00:30:39,650 because the most important thing was to get someone to work together the data who had a really sophisticated understanding of that system, 287 00:30:39,660 --> 00:30:48,090 so we couldn't be too prescriptive. So we appointed these research assistants and we asked them to go out and to get information, 288 00:30:48,270 --> 00:30:56,220 build a spreadsheet which would basically chart the range of bail outs. 289 00:30:56,280 --> 00:31:00,599 So taxpayer funded assistance by aliens, orders to forgive. 290 00:31:00,600 --> 00:31:05,370 So asking private creditors to bear some of the pain and bankruptcy law changes. 291 00:31:05,370 --> 00:31:13,710 So using pre-pandemic bankruptcy law and perhaps altering it to offer relief to newly distressed businesses, we asked we sort of built a taxonomy. 292 00:31:14,370 --> 00:31:18,899 We asked them to go out and and put all the policies they could find that were 293 00:31:18,900 --> 00:31:23,280 implemented by the state essentially during the first wave into a spreadsheet. 294 00:31:23,670 --> 00:31:30,750 And we had absolutely no idea just about the scale of this at the time, you know, how many jurisdictions. 295 00:31:31,050 --> 00:31:36,300 So we in the end, I think we covered about 25, 20 something jurisdictions. 296 00:31:36,480 --> 00:31:45,500 I should know that exact answer for you, but we had no idea about the complexity of of the response in, in one jurisdiction alone. 297 00:31:45,510 --> 00:31:53,309 So you'd have a research assistant come back having it having worked on this and say, well that found 55 relevant policy interventions. 298 00:31:53,310 --> 00:32:00,420 You know, we had and this is just in the first seven, eight months of the pandemic and this created a number of challenges. 299 00:32:00,450 --> 00:32:05,070 First, it was more time consuming than we expected to do the initial data collection. 300 00:32:06,120 --> 00:32:13,470 Secondly, it was much more complicated than we expected to then do what we had planned to do next and what we are still doing at the moment, 301 00:32:13,860 --> 00:32:20,370 which is to code all of that data to turn it into zeros and ones so that we could 302 00:32:20,370 --> 00:32:25,410 actually do something which was more than purely descriptive with that dataset. 303 00:32:25,830 --> 00:32:32,909 And the reason for the reason it takes so long to do that is a combination of a large number of policy interventions. 304 00:32:32,910 --> 00:32:37,139 So there might be 50 or 60 different things that government did one thing for hospitality in 305 00:32:37,140 --> 00:32:42,810 April and then a new policy for hospitality in May and then a revision of that policy in June. 306 00:32:42,810 --> 00:32:48,990 And that's just for a subset of businesses in one sector, you know, and then you've got to think about what was happening across that whole economy. 307 00:32:49,350 --> 00:32:58,950 So there's lots of stuff that was going on. And also to code it, we as a research team now as we code this information to code it, 308 00:32:58,950 --> 00:33:03,870 you have to have a reasonably good understanding of what was going on in that particular intervention. 309 00:33:04,110 --> 00:33:08,879 And that means that we've had to go back to all the primary sources. So we've had to do that at two stages. 310 00:33:08,880 --> 00:33:16,170 First, to get the initial information, a research assistant has had to go out and find what's happened and put in a list of sources, 311 00:33:16,470 --> 00:33:20,820 but then to be able to turn those sources into something that we can work with. 312 00:33:21,690 --> 00:33:31,020 We've had to go back to all the primary sources to understand whether we've correctly interpreted the intervention as a bailout of a particular kind. 313 00:33:31,470 --> 00:33:36,870 And so, for example, we didn't know at the time that we sent the research assistants out to do this 314 00:33:36,870 --> 00:33:42,530 work that there would be hugely complex forms of relief by way of guarantee. 315 00:33:42,540 --> 00:33:47,190 So we had in mind that governments might give cash or they might offer loans, but we didn't. 316 00:33:47,400 --> 00:33:54,690 I don't think really have in mind was the scale of programs where governments would guarantee new finance, which was given by others. 317 00:33:54,990 --> 00:33:57,600 And the terms of these guarantees are very different. 318 00:33:57,600 --> 00:34:02,400 And those terms are important to understanding whether or not that intervention was sensibly designed. 319 00:34:02,580 --> 00:34:09,180 But it takes us a long time to go back to the sources that governed the terms on which a particular form of relief was offered to 320 00:34:09,180 --> 00:34:16,860 interpret it properly and then organise it into our taxonomy in such a way that we can actually make sense of what we observe, 321 00:34:17,130 --> 00:34:22,560 because it's all very well to produce a massive spreadsheet of hundreds and hundreds of interventions, 322 00:34:22,830 --> 00:34:30,149 but actually to be able to evaluate these is much more useful if we're able to to identify key trends. 323 00:34:30,150 --> 00:34:36,810 And to do that, we need to be able to reduce this massive words, qualitative information into something in summary form. 324 00:34:37,050 --> 00:34:43,560 And that's turned out to be super hard. So a project that should have finished three months ago would finish until the end of July this year. 325 00:34:43,860 --> 00:34:48,419 But that's an output. Yes, yeah. We've had some outputs and we have a fantastic dataset. 326 00:34:48,420 --> 00:34:53,880 So it's you know, I'm confident that we're able to make contributions with this work. 327 00:34:54,240 --> 00:34:58,710 I don't think there's a a similarly granular dataset out there. 328 00:34:59,040 --> 00:35:01,709 And what our data shows, among other things, 329 00:35:01,710 --> 00:35:13,830 is just how hard it was for policymakers who tended as a generalisation when you look at our data overall to rely on bailouts rather than by-lines. 330 00:35:13,830 --> 00:35:20,430 So there was a tendency to go for taxpayer funded relief rather than to try to work out today whether someone 331 00:35:20,430 --> 00:35:26,010 could help to shoulder the pain and would defer the pain to the future by giving you a tax funded bailout. 332 00:35:26,370 --> 00:35:31,920 But once you do that, then policymakers have some really hard choices to make. 333 00:35:32,250 --> 00:35:37,410 To what extent do you offer relief? How do you determine the eligibility criteria for relief? 334 00:35:37,650 --> 00:35:40,950 How do you weed out bad businesses? How do you control fraud? 335 00:35:41,190 --> 00:35:44,520 So there's enormous complexity in the design of these instruments, 336 00:35:44,760 --> 00:35:50,100 but that complexity is really important to lift the bonnet on and look at in detail because that's going to help us to 337 00:35:50,100 --> 00:35:57,060 work out whether the policymakers could design something which does a better job in a future shock of this magnitude. 338 00:35:57,420 --> 00:36:03,360 So I think the overall motivation for the project is really to try to articulate the lessons 339 00:36:03,360 --> 00:36:08,160 we can learn whilst fully appreciating the constraints policymakers were working on. 340 00:36:08,250 --> 00:36:13,080 So the idea is not to rake policymakers over the coals and say, how silly. 341 00:36:13,260 --> 00:36:17,580 We know that policymakers were working in emergency conditions with limited information. 342 00:36:17,850 --> 00:36:27,780 But the overall motivating question is in a future shock or crisis of this magnitude, maybe a pandemic, but it may be another type of shock or crisis. 343 00:36:28,170 --> 00:36:35,190 Can we do better than what policymakers had to do in these conditions during the COVID 19 pandemic? 344 00:36:35,550 --> 00:36:45,900 Is that something we can build into the system that might be more likely to produce an optimal result than what we've observed? 345 00:36:45,900 --> 00:36:52,920 Because we know that there are downsides and costs associated with what has happened during the COVID 19 pandemic. 346 00:36:53,460 --> 00:37:03,480 And we know that in particular, the the scale of the bailouts poses real problems for states going forward. 347 00:37:03,570 --> 00:37:07,830 So the level of relief that's being offered to distressed businesses, 348 00:37:08,310 --> 00:37:16,200 that that will have implications for tax policy, for state spending, for future generations going forward. 349 00:37:16,950 --> 00:37:22,019 So yeah, that's our overall motivation is to work out whether we can learn from what happened in this 350 00:37:22,020 --> 00:37:29,310 pandemic and develop insights that might help policymakers in a future shock of this scale. 351 00:37:29,790 --> 00:37:38,099 Yeah. So you mentioned fraud. Yeah. I mean, the public accounts committee has said that in this country there was a high level of. 352 00:37:38,100 --> 00:37:43,139 Yeah, I mean, things like applications for bounce back loans. Yes. Is that something you address particularly or is that. 353 00:37:43,140 --> 00:37:48,900 Yeah, so it's a very good question. So it's not something that our data can tell us about at the moment, 354 00:37:48,900 --> 00:37:55,170 because all our data set does now, for now is show us what governments actually did. 355 00:37:55,170 --> 00:38:09,300 But we do include we do include some variables in our taxonomy that are designed to test how governments controlled the eligibility for relief, 356 00:38:09,720 --> 00:38:13,950 so how they tried to weed out businesses that were non-viable before the pandemic, 357 00:38:14,190 --> 00:38:17,999 how they tried to focus on businesses that were actually trading prior to the pandemic, 358 00:38:18,000 --> 00:38:21,570 which is an issue with some of the forms of relief you've referred to. 359 00:38:22,080 --> 00:38:25,650 So we look at what was built into the policy at the time, 360 00:38:26,430 --> 00:38:33,389 and what we're doing now in writing up a paper connected to this coding exercise is what you suggested, 361 00:38:33,390 --> 00:38:42,510 which is to try to to show how governments varied in the terms of these eligibility criteria and what implications that might have for fraud. 362 00:38:42,750 --> 00:38:47,280 But that won't tell us the scale of the potential fraud risk. 363 00:38:47,330 --> 00:38:47,990 To do that, 364 00:38:48,380 --> 00:38:59,450 we'd need phone level data where we where we try to compare the extent of the relief that was offered with what we think the actual firm need was, 365 00:38:59,450 --> 00:39:02,540 if any. And that is something we're interested in doing. 366 00:39:03,320 --> 00:39:07,840 But getting the data is hard. So this is something we've been discussing as a project team. 367 00:39:08,960 --> 00:39:16,910 Yeah, it's a good question. Yeah. Yeah. So, I mean, do have you come to any and I know it's very difficult because every jurisdiction is different. 368 00:39:16,910 --> 00:39:25,340 But did you come to any overall conclusions about, say, the balance between bailouts and balance and and what was working best? 369 00:39:25,580 --> 00:39:30,200 Yeah. So I don't think we're at that point yet because we're still analysing the data. 370 00:39:30,200 --> 00:39:34,640 So it's sort of premature for me to say anything conclusive about that. 371 00:39:36,830 --> 00:39:39,890 But I think it's fair to say already that. 372 00:39:43,270 --> 00:39:54,820 We do observe some forms of bailout in some for some sectors in some jurisdictions that appear, on the face of it, staggeringly generous. 373 00:39:55,180 --> 00:39:59,330 Right. And so there may be good reasons for that generosity. 374 00:39:59,350 --> 00:40:03,910 It may be that it's not possible to design a more calibrated, tailored form of relief. 375 00:40:04,330 --> 00:40:07,659 But that does raise your scholarly eyebrows. 376 00:40:07,660 --> 00:40:13,210 Right. Given that there's a real cost associated with this, the extension of this relief. 377 00:40:13,840 --> 00:40:17,860 So in terms of your question about balance between bailing and bailout, I mean, 378 00:40:17,860 --> 00:40:23,130 from what we can see in the in the jurisdictions that we've already created, bailouts really dominate. 379 00:40:23,140 --> 00:40:26,560 So there are very few experiments with balance in that. 380 00:40:26,560 --> 00:40:35,410 In the jurisdictions we've coded so far, and at least some of us in the project team are really interested in understanding whether governments 381 00:40:35,410 --> 00:40:41,500 should have done more to try to allocate the cost of the pandemic at an earlier point in time, 382 00:40:41,500 --> 00:40:45,760 rather than leave it to future taxpayers to bear the cost of this relief. 383 00:40:46,360 --> 00:40:54,429 So what we're doing now in in another paper so I've referred to the paper where we're trying to to chart how governments set the terms, 384 00:40:54,430 --> 00:41:03,520 the eligibility criteria for bailouts. But in another paper coming out of the project, we're looking in much more detail at the concept of a bail in. 385 00:41:03,820 --> 00:41:09,190 Is it actually operationally feasible for governments to do what we proposed in theory at the outset? 386 00:41:09,460 --> 00:41:19,570 Can they do it? And what might be the virtues of attempting to do it compared to wholesale reliance on bailouts, 387 00:41:19,570 --> 00:41:24,820 which I think in many jurisdictions will prove to be what actually happened? 388 00:41:25,600 --> 00:41:34,360 So I can't say for sure, but I think it's fair to say our intuition is that the scale of some bailouts appears to have gone beyond, 389 00:41:34,360 --> 00:41:35,710 at least on the face of it, 390 00:41:36,160 --> 00:41:43,300 what was necessary to minimise the amplification of the shock and will introduce additional costs that have long run effects. 391 00:41:43,900 --> 00:41:47,590 And meanwhile, there were some businesses we read in the paper. Yeah, we did incredibly well. 392 00:41:47,980 --> 00:41:51,140 Sure. Yes. Super profits. Yes. Excellent. 393 00:41:51,160 --> 00:41:54,070 They weren't actually creditors of the small businesses. 394 00:41:55,500 --> 00:42:01,020 Is that something you looked at, whether they could have paid a higher share as opposed to the government? 395 00:42:01,110 --> 00:42:05,280 Yes, excellent question. So this is something that we're looking at at the moment. 396 00:42:05,280 --> 00:42:16,380 And there are a range of proposals that have come from different policy institutions and INGOs around the treatment of the winners of the pandemic. 397 00:42:17,130 --> 00:42:24,270 And so in the paper where we look at in the paper where we look at the feasibility of balance, 398 00:42:24,270 --> 00:42:27,480 we address this question, the treatment of pandemic winners. 399 00:42:27,660 --> 00:42:34,200 But I can't give you the paper because we're writing it at the moment, but soon the paper will be available, right? 400 00:42:34,530 --> 00:42:38,300 Yeah. So this is something that we're looking at at the moment. Yes. 401 00:42:38,510 --> 00:42:42,400 So overall, you're looking at money flows, really, aren't you? 402 00:42:42,430 --> 00:42:47,190 Correct. Winners and losers and how correct can be just equilibrated. 403 00:42:47,190 --> 00:42:50,490 So that's right. And that's what bankruptcy scholars do all the time. 404 00:42:50,970 --> 00:42:54,780 It's just that normally they do that within a pretty stable framework, 405 00:42:55,240 --> 00:43:00,900 a body of rules that of course, they change from time to time, but they've been fairly stable. 406 00:43:00,960 --> 00:43:04,110 So normally the parameters of this debate are pretty fixed. 407 00:43:04,410 --> 00:43:11,490 So you might have a debate about recalibrating or reforming some particular aspect of your bankruptcy regime, 408 00:43:12,420 --> 00:43:15,120 perhaps introducing a new form of procedure. 409 00:43:15,480 --> 00:43:23,880 But in the pandemic, when governments realised that the pre-pandemic bankruptcy law was probably not best used for the treatment of this distress, 410 00:43:24,480 --> 00:43:30,600 a whole range of new options that bankruptcy scholars don't normally get to think about, even though they probably should, are on the table. 411 00:43:30,870 --> 00:43:37,620 And I think the most exciting thing intellectually for me about this project has been being pushed 412 00:43:37,620 --> 00:43:45,210 to see the relationship between that pocket of rules and everything that happens outside it. 413 00:43:45,330 --> 00:43:54,059 Because often when you work within a particular area, you tend to focus on quite specialised questions that are important questions, 414 00:43:54,060 --> 00:44:02,070 but the sort of interest system questions that are important for those who are working in a particular body of rules. 415 00:44:02,370 --> 00:44:09,419 And what this project has done is force me to understand better the characterisation of those rules, 416 00:44:09,420 --> 00:44:14,460 but also the interaction between those rules and other forms of policy relief. 417 00:44:15,270 --> 00:44:21,659 And so maybe some of the questions I was most interested in previously are not the questions I'm most interested in at the moment. 418 00:44:21,660 --> 00:44:29,070 And that's very rewarding. And of course, that's why people become academics, so they can learn about things they didn't previously understand. 419 00:44:29,670 --> 00:44:33,720 Hmm. Yes. Get into the question is going to come to the world. We might we might come back to it. 420 00:44:34,560 --> 00:44:39,610 Yes. Just so. Yeah. 421 00:44:39,690 --> 00:44:43,530 So you were. You were also you said you were already working collaboratively. 422 00:44:45,220 --> 00:44:48,540 Did did did you work on this project? 423 00:44:49,260 --> 00:44:55,080 Would you say it was much the same in terms of the level of collaboration, not your previous work? 424 00:44:55,110 --> 00:45:03,090 No, I would say this is probably the most truly interdisciplinary work that I've done because it has so heavily involved. 425 00:45:03,570 --> 00:45:10,530 Professor Sussman. And what's great about working with financial economist, if you're a legal scholar, 426 00:45:11,070 --> 00:45:16,300 is that the way that you frame things is not the way as a legal scholar. 427 00:45:16,320 --> 00:45:20,100 It's not the way that an economist frames things. And so you're really pushed. 428 00:45:22,580 --> 00:45:32,270 You're really pushed on why it is that certain things are accepted or understood to be to be the position. 429 00:45:32,510 --> 00:45:41,569 And that might be obvious to an inside within a system, but it may be very far from obvious to an observer of that system. 430 00:45:41,570 --> 00:45:50,810 As an economist, yes. And so working with Orin has been hugely valuable to me, my own thinking about my field, 431 00:45:51,440 --> 00:46:01,759 because Arn asks big picture questions about my field from the perspective of of an outsider who has the same overarching academic interest, 432 00:46:01,760 --> 00:46:05,719 which is what do laws do in the real world? 433 00:46:05,720 --> 00:46:08,990 And is that effect good or bad, desirable, undesirable? 434 00:46:09,260 --> 00:46:11,690 But he approaches those rules from a different perspective, 435 00:46:11,690 --> 00:46:21,140 with a different toolkit and less governed by the conventions, which legal scholars tend to work within. 436 00:46:21,410 --> 00:46:26,960 So that has been very intellectually fruitful for me and I've learnt a lot from working with him. 437 00:46:27,830 --> 00:46:37,760 And do you think about the question that coming later, do you think that that experience will change the way you approach your work in the future? 438 00:46:37,850 --> 00:46:43,759 Yes, I do. Yes, I think having these conversations so when we did the theoretical paper, 439 00:46:43,760 --> 00:46:50,570 we had lots of long Zoom calls where one of us would say, But what do you mean by that? 440 00:46:50,990 --> 00:46:53,569 And then the other would say, Well, it's perfectly obvious what I mean, 441 00:46:53,570 --> 00:47:00,290 but it's not obvious actually when you're having a conversation, a real conversation across disciplines. 442 00:47:00,890 --> 00:47:08,330 And so we had to do a lot of work, the three of us clearing the ground to understand, I suppose, 443 00:47:08,330 --> 00:47:17,659 to establish a common language for our inquiry, but also to to learn from each other. 444 00:47:17,660 --> 00:47:25,309 And so there are things that legal scholars can bring I don't think it can bring to a project with an economist. 445 00:47:25,310 --> 00:47:27,709 I don't think it's a one way traffic. 446 00:47:27,710 --> 00:47:36,620 We learn a lot from economists, especially if we as legal scholars are ultimately interested in the desirability of rules in the real world. 447 00:47:36,620 --> 00:47:39,919 Will we? Of course, we're going to learn a huge amount from economists, 448 00:47:39,920 --> 00:47:49,910 but legal scholars also bring something to the table because they understand the real limitations on what you can ask of the system 449 00:47:50,240 --> 00:47:58,580 and the reasons why the legal system is designed in a particular way or requires a particular thing or produces a particular output. 450 00:47:59,000 --> 00:48:07,430 And that means that if you if you can work together closely, then a legal scholar can bring to the table insight about the system, 451 00:48:07,700 --> 00:48:15,590 which is not always, I think is probably very rarely available to outsiders who don't work within that system as a participant in the system. 452 00:48:16,250 --> 00:48:24,229 So I think, of course, I have done work and been involved in projects which are interdisciplinary. 453 00:48:24,230 --> 00:48:28,879 But in terms of my in the past, but in terms of my personal contribution in this project, 454 00:48:28,880 --> 00:48:37,640 it has been more interdisciplinary than my prior work and it has opened up possibilities for me with future research, which I think are very exciting. 455 00:48:39,080 --> 00:48:44,720 So I can see now a line of a long line which I'm progressing too slowly, 456 00:48:44,960 --> 00:48:53,540 a long line of papers connected to this work and projects connected to this work, and that's very exciting. 457 00:48:53,540 --> 00:49:02,809 So for me it has been an academic term, so a good moment, if not, if in many other ways a pandemic has been terrible. 458 00:49:02,810 --> 00:49:08,620 But in academic terms that has been very good for me to have that opportunity. 459 00:49:09,020 --> 00:49:14,209 So that's that was the next thing that's going to and personally the experience of COVID. 460 00:49:14,210 --> 00:49:20,540 Were you personally alarmed about the risk of infection, either for yourself or for family members or colleagues or friends? 461 00:49:20,540 --> 00:49:27,199 Yes, certainly. Yes. I mean, I think I was probably very alarmed for much of the last two years. 462 00:49:27,200 --> 00:49:31,850 I mean, I think I was very anxious in the pre-vaccination period. 463 00:49:33,440 --> 00:49:43,220 And then I think you I could allow myself a slight amount of relaxation once the vaccination programme was rolled out. 464 00:49:45,170 --> 00:49:48,079 But yeah, I think it was a very it was a very anxious time. 465 00:49:48,080 --> 00:49:54,139 I mean for me my I grew up as I mentioned in, in Australia and all of my, my family's in Australia. 466 00:49:54,140 --> 00:49:59,210 So I am married to a British man and we have children here, we have three children, we live in Oxford. 467 00:49:59,540 --> 00:50:08,240 But we were separated from my family in Australia for 2 to 2 years to a nearly two and a half years. 468 00:50:09,200 --> 00:50:14,410 And in the case of my siblings, it was almost three years that I did. 469 00:50:14,420 --> 00:50:21,350 I didn't see them and that was very difficult. My mum has a lung condition I worried a lot about. 470 00:50:21,730 --> 00:50:27,370 COVID in the first year prior to vaccination and mom in particular getting COVID. 471 00:50:27,880 --> 00:50:37,780 And because the Australian borders were closed, I had I knew that if something happened I wouldn't be able to get in to see my family. 472 00:50:38,200 --> 00:50:42,670 And in fact, we were unable to get in to see them until November 20, 21. 473 00:50:43,660 --> 00:50:49,660 So if there had been an emergency, I was aware that I wouldn't have been able to respond to that. 474 00:50:49,660 --> 00:50:53,230 And that was very difficult. Although there was no such emergency. 475 00:50:53,500 --> 00:50:55,870 But it was worrying that something would happen. 476 00:50:56,830 --> 00:51:05,200 So I think, yeah, it was a difficult time, even though compared to others we had it easy, you know, we really did. 477 00:51:05,590 --> 00:51:10,360 You know, I didn't lose my job. We kept our health. 478 00:51:11,020 --> 00:51:16,270 We had childcare where many other people didn't have childcare to get well, excuse me. 479 00:51:16,270 --> 00:51:24,810 So I can never get involved in homeschooling. Yes, I did have a period of home schooling and that was the beginning of 2021, wasn't it? 480 00:51:24,820 --> 00:51:28,660 So the second wave, whether it was three or four months, that was a challenge. 481 00:51:29,050 --> 00:51:34,420 That was a challenge for this project because I was at the moment on sabbatical, 482 00:51:34,420 --> 00:51:41,080 but at that time I was teaching and we were trying to in that term in the second wave, 483 00:51:42,100 --> 00:51:48,040 we were trying to do everything we could for the students because it was very difficult for the students. 484 00:51:48,040 --> 00:51:56,079 I mean, it was really heartbreaking that they they had come to Oxford and they were unable to at least people in the first 485 00:51:56,080 --> 00:52:03,310 wave had had interaction in the first term of the academic year they met that tutors and then we shifted to online. 486 00:52:03,760 --> 00:52:10,959 But for people who came in that second academic year of the pandemic, they arrived and there was pretty much a crisis. 487 00:52:10,960 --> 00:52:18,610 You know, it wasn't long and everything was online and students were spending their academic year in their bedrooms, 488 00:52:18,610 --> 00:52:25,990 you know, with parents, family, perhaps in another country, perhaps grave COVID threats, perhaps bereavements. 489 00:52:26,860 --> 00:52:36,730 And not seeing that was, you know, not having. That ability to build an in-person relationship with with their tutors and their peers. 490 00:52:37,180 --> 00:52:38,020 That was really tough. 491 00:52:38,030 --> 00:52:46,570 So all of the academic staff involved in the delivery of programs at that time we were trying to do to increase what we offered to students. 492 00:52:46,840 --> 00:52:53,290 So offering more one on one meetings outside normal class provision, 493 00:52:54,010 --> 00:53:00,790 anything that we could do apart from hanging out in-person or going for walks in university parks when we're allowed to do that, 494 00:53:00,790 --> 00:53:05,130 or shifting to have revision tutorials on the grass outside or whatever we could all do. 495 00:53:05,410 --> 00:53:11,709 So we had to instead of cutting down and this is a long answer to a question, but instead of doing less for our students, 496 00:53:11,710 --> 00:53:15,250 I think we're all trying to do more than at the same time, 497 00:53:15,970 --> 00:53:22,540 those of us who had school age children were also trying to manage progression through schoolwork and so on. 498 00:53:22,750 --> 00:53:30,850 So that was a very tiring period period, and I didn't make as much progress as I should have on many things. 499 00:53:31,240 --> 00:53:39,130 But one of the one of the many upsides of an academic career is that that's usually okay. 500 00:53:39,430 --> 00:53:44,890 You can usually catch up later. And so it's not like working in a hospital where you can't fall behind. 501 00:53:45,790 --> 00:53:52,060 So it was tiring. But I think, again, we we had it a little better than, than many people in our family. 502 00:53:52,480 --> 00:53:56,230 Yeah, but it was a question about working hours, but it didn't seem relevant really because I think, 503 00:53:56,260 --> 00:54:02,320 you know, as a mom you're working anyway and it sounds as though you were on a treadmill. 504 00:54:02,620 --> 00:54:06,159 Yeah, I think I think everyone, once they make work, you would do it. Correct. 505 00:54:06,160 --> 00:54:14,650 But I think everyone was at that time really. And I think there's a general as we came out of that year, I think there was a real sense, 506 00:54:14,670 --> 00:54:28,110 like a palpable sense of the exhaustion in in the whole the whole team, not just the academic staff, but also the professional support staff that it. 507 00:54:29,410 --> 00:54:35,950 That was very, very challenging time. And I think people will take quite a long time to recuperate from the last two years. 508 00:54:36,700 --> 00:54:39,910 I think we were taken, but that's true across society, isn't it? 509 00:54:39,980 --> 00:54:47,020 I'm just hoping for universities. Do you think the fact that you had a relevant project to work on helped to support your own wellbeing? 510 00:54:48,190 --> 00:54:57,190 I do think that my work, it generally enhances my wellbeing, although of course it makes you busier, 511 00:54:57,190 --> 00:55:03,099 particularly if you have also have caring responsibilities and we have three small kids, 512 00:55:03,100 --> 00:55:06,400 so we have a two, three and a half year olds and a five and a half year old. 513 00:55:06,820 --> 00:55:12,700 So we have a sort of busy life at home. My husband and I and then this is a busy job. 514 00:55:13,030 --> 00:55:23,530 I do think generally I'm much I find my work to be a source of great enrichment and encouragement. 515 00:55:24,070 --> 00:55:30,940 And so I think it is a very positive aspect of this overall busyness. 516 00:55:31,990 --> 00:55:36,700 And I think you're right that in the first stage of the pandemic, it was also. 517 00:55:38,900 --> 00:55:42,240 It was also encouraging to feel like you were doing something however tiny. 518 00:55:42,260 --> 00:55:51,380 I mean, of course, people working in other fields were making much more profound impacts in society than what we are doing in this project. 519 00:55:51,770 --> 00:56:01,700 But still, it was a way to use your skills to investigate something that was happening at that moment and to try to use the skills that 520 00:56:01,700 --> 00:56:07,400 you have to bring whatever limited skills you have to the table to try to help to understand the contours of the problem. 521 00:56:07,700 --> 00:56:14,989 That was encouraging. But as I said earlier, I think in the second wave of the pandemic, I think that that was a more difficult time. 522 00:56:14,990 --> 00:56:20,900 I think that was much more there was a sense that it was sort of never going to never going to end. 523 00:56:21,620 --> 00:56:29,420 And it was much more prolonged, a much more difficult and much more awful than I think any of us could have appreciated at the outset. 524 00:56:30,020 --> 00:56:38,240 So I think that initial surge of energy was replaced with something more mixed as the pandemic went on. 525 00:56:38,660 --> 00:56:40,550 But definitely it has been. 526 00:56:41,510 --> 00:56:48,740 Yeah, you know, I feel happy that we've been able to work on something connected to the pandemic using pre-existing skills, 527 00:56:48,980 --> 00:56:54,080 however small the contribution ends up being in the end. And it's there. 528 00:56:54,080 --> 00:57:01,430 And I think I'm coming to a final question already. Is there anything that your experience of working through this pandemic, 529 00:57:01,430 --> 00:57:09,380 either the nature of the work you were doing or the circumstances that you'd like to see change in the future? 530 00:57:12,580 --> 00:57:15,760 Yeah. I mean, that's a hard question. 531 00:57:18,940 --> 00:57:25,050 So I think. Overall, 532 00:57:26,130 --> 00:57:33,090 the pandemic has probably had the reverse effect for me in that it has given me a greater humility in 533 00:57:33,090 --> 00:57:40,500 understanding how governments must work and the limitations and constraints on government workings. 534 00:57:41,430 --> 00:57:47,460 But at the same time, I do think there is scope for academics working in this space. 535 00:57:49,230 --> 00:58:00,059 To both work to reveal the true cost of pandemic relief outside of the health care setting. 536 00:58:00,060 --> 00:58:04,260 So other forms of pandemic relief, including relief to distressed businesses. 537 00:58:04,770 --> 00:58:14,220 Academics must work to reveal the overall cost to the extent of us susceptible of evaluation. 538 00:58:14,430 --> 00:58:15,900 It must work to do that. 539 00:58:16,560 --> 00:58:26,040 There must be accountability for decisions, not with a view to judgement, but with a view to generating insights for the future. 540 00:58:26,370 --> 00:58:31,740 And I think that academics we can now, with the experience of this pandemic, which is the, 541 00:58:32,640 --> 00:58:42,570 you know, the most sort of seismic shock that that we've experienced in our lifetimes, 542 00:58:43,230 --> 00:58:49,709 but one in which, you know, many scholars working across disciplines think could be replicated if not in the form of a pandemic, 543 00:58:49,710 --> 00:58:52,800 then perhaps in the form of another form of seismic shock. 544 00:58:53,100 --> 00:59:02,670 In our lifetimes, the world is more unstable across many dimensions than it was ten or 20 years ago. 545 00:59:02,790 --> 00:59:13,680 Right. So academics now have a good opportunity to work to lift the bonnet on what happened in the pandemic, to get into the granular detail, 546 00:59:14,220 --> 00:59:19,560 to try to understand why things were done as they were with and with what overall effect, 547 00:59:20,130 --> 00:59:26,700 with a view to the development of prescriptions, the generation of insights that can help policymakers in the future. 548 00:59:27,030 --> 00:59:36,809 Because as I said at the beginning of this remark, I think the pandemic has given us all a sense of the monumentally difficult task that governments 549 00:59:36,810 --> 00:59:43,710 face in making these huge decisions which have important distributive effects in societies, 550 00:59:44,220 --> 00:59:50,820 particularly for the most vulnerable. So academics now I think we need to step up to the plate, as it were, 551 00:59:50,820 --> 00:59:59,220 and be bold in working out exactly what happened with what effects, and then trying from that to generate some lessons for the future. 552 00:59:59,250 --> 01:00:01,140 So yes, I hope that going forward, 553 01:00:02,760 --> 01:00:13,829 academics will engage and continue to engage very seriously in in working out the parameters of this conversation and making prescriptions. 554 01:00:13,830 --> 01:00:17,210 And I hope I can be part of the conversation. Mm hmm. 555 01:00:17,430 --> 01:00:21,090 That was a wonderful final question. An answer. But I just thought the question. 556 01:00:21,100 --> 01:00:29,220 Go ahead. What you think of the level of expertise within the Treasury and other finance ministries in your area? 557 01:00:29,430 --> 01:00:36,910 Oh, I have not I don't know if I'm even really competent to to assess that, as in I don't know if I have the relevant information to do that. 558 01:00:36,930 --> 01:00:49,620 I can say that in normal times in my particular area, government works very closely with with private sector experts. 559 01:00:50,400 --> 01:00:58,410 And I think that is, of course, there are obvious risk in doing so, but I think that is generally desirable that that happens. 560 01:00:58,410 --> 01:01:01,820 So I think the process of law reform in my field is, 561 01:01:02,870 --> 01:01:08,459 is much more collaborative than you might think when you open the statute book involves a very high 562 01:01:08,460 --> 01:01:16,380 degree of consultation interaction with those who work day to day in the implementation of these rules. 563 01:01:16,390 --> 01:01:25,530 Now, of course, that we we know from rich literature that this means you could end up with legislation which is captured by a particular constituency. 564 01:01:25,530 --> 01:01:31,739 And there are obvious reason, I think, that the government in this jurisdiction is, at least in the areas that I work in, 565 01:01:31,740 --> 01:01:42,840 attentive to that that risk, and seeks to consult widely and to strike a balance between the representations by various constituencies. 566 01:01:43,320 --> 01:01:49,049 But I think the work, the area that I work in is highly technical and it would be very, 567 01:01:49,050 --> 01:01:58,890 very difficult for governments to make anything other than very trivial changes to the regime without that degree of consultation and interaction. 568 01:01:59,340 --> 01:02:05,880 And so I think, yes, of course, people working in government in this area have lots of expertise, I'm sure. 569 01:02:06,150 --> 01:02:16,229 But I think they also do a good job of signposting potential changes and then having a very in-depth discussion with insolvency lawyers 570 01:02:16,230 --> 01:02:26,520 who work in this space day to day to sense check whether or not what they propose to do is likely to produce the hoped for effect. 571 01:02:27,030 --> 01:02:29,070 Because in the area that I work in, 572 01:02:30,060 --> 01:02:38,160 it is not uncommon for legislation to be introduced for a particular purpose and then to produce an unexpected effect, 573 01:02:38,580 --> 01:02:42,600 the costs of which exceed the benefits of the original intervention. 574 01:02:42,960 --> 01:02:47,970 So I think the consultative approach is, is a desirable one in this particular. 575 01:02:48,100 --> 01:02:51,820 Area. What's interesting about the pandemic, as I've already said, 576 01:02:52,150 --> 01:02:59,620 is that I don't think that there was really the capacity for governments to do that for good reason. 577 01:02:59,830 --> 01:03:07,840 But I do think that had implications for the design of a policy and the design of the rules that we ended up with. 578 01:03:08,260 --> 01:03:12,390 Yeah. So there are costs associated with that. Based.