Section Description Provided by Instructor
Financial regulation is at an international crossroad. The drive of the financial crisis ten years ago seems to have lost momentum and key questions are raised about its purpose, value added and effectiveness.
This seminar examines financial regulation with a global outlook, both geographically and conceptually. The underlying question is to what extent financial regulation is supporting financial stability and enabling growth? We will discuss current topics in finance and banking with a legal-conceptual perspective, allowing us to consider the political, policy and economic fundamentals of financial regulation. We will connect a global perspective with relevant developments in Europe, the US, Asia and other regions dependent upon the students' interest and actual developments.
Subject to changing circumstances, the following questions are examples of topics to be addressed.
- The relative underdeveloped capital markets in Europe; can Europe reduce its overbanking through the Capital Markets Union project?
- Brexit and the financial sector in Europe and the UK: what will be the new role of the City of London?
- The status of the EU Banking Union; what does the Italian banking crisis teach us?
- Shadow banking in China; how could the Chinese government curb the over-indebtedness emerging from shadow banking, and what will be the impact of recent regulatory initiatives to protect retail investors? What is the global impact of China's shadow banking sector?
- Costs of regulatory compliance for financial firms; in the US and EU - is regulatory compliance too expensive? To what extent does increased regulation impair innovation in the banking and finance sectors, or enhance shadow banking? Has the culture and governance of financial institutions changed since the financial crisis? Is the issue of "too big to fail" sufficiently solved?
- What does Trump's presidency mean for financial regulation?
- How will Japanese banks survive deep negative interest rates - and what can other economies learn from Japan?
- What is the impact of Latin America's turbulent politics on the countries financial situation (e.g. Venezuela, Brazil, etc.)?
- As the role of the world's major central banks has significantly increased since the financial crisis, do have they become too powerful - and do governments rely on them too heavily?
Financial regulation plays a critical role when assessing these questions. From a global perspective, the Basel ratios strongly influence the business of banking. However, at the core of the issues we will discuss, the lack of global regulatory institutions leaves financial regulation fragmented and complex. This triggers many discussions on the effectiveness and impact of regulation on financial stability and economic growth.
The class targets students with an interest in financial regulation, and does not require in-depth familiarity with financial vocabulary and concepts of financial regulation. The purpose of this class is to improve this understanding, and provide students with more background to discuss recent issues in financial regulation.
Methodology and timeline
Participation. After an introductory lecture, each class includes open discussions of the week's most relevant financial news and the reading materials for the class. Students are explicitly invited to raise concerns, questions or comments to present their own views. I will invite guest speakers with a different expertise (in previous years we received former Managing Director of the IIF Charles Dallara, Barclays Bank CEO Jes Staley, DE Shaw Legal Counsel John Liftin and President of the European Investment Bank Philippe Maystadt, Brexit negotiations advisor to the UK government Barnabas Reynolds).
Presentation. Each student presents a class-specific case study
Essay. At the end of the semester, students write an essay on a narrow topic of their choice relevant to the course. LLM paper is possible.
F 1:40-3:30 pm
Method of Evaluation
J.D. Writing Credit
Minor (automatic), Major (only upon consultation) (LLM Papers possible)
LLM Writing Project
Instructor permission not required, but please specify if 2-3L, LLM, SIPA or Business School
Learning Outcome Goals
- The purpose of this class is to improve the understanding of finance from a regulatory and policy perspective, and provide students with more background to reflect on recent issues in financial regulation.
- At the end of the course, students will have acquired understanding of and/or facility in use of other disciplines in the analysis of legal problems and institutions, e.g., philosophy; economics,other social sciences; and cultural studies
- At the end of the course, students will have acquired understanding of and/or facility in the influences of political institutions in law