Overview

The primary objective of this course is to create an understanding of the legislative and regulatory frameworks that govern economic activities within the financial services sector. The course will provide students with a thorough understanding of imperfections in financial markets and how these imperfections can be addressed through various forms of financial regulation. Crucially, the students will also learn when financial regulation is inefficient to address imperfections.

The course will then cover a very brief history of the global financial crisis as a case in point to highlight how financial regulation has changed since 2008. In particular, the course will give students an overview of the variety of non-bank financial intermediaries ("shadow banks") that emerged prior the 2008 and their role for contagion and systemic risk.

We will discuss Basel III in detail and also cover the capital requirements directives in the European Union as well as the Dodd-Frank Act and different aspects of market conduct regulation. The course will conclude with a brief overview of the most important developments in fintech and outline how these new technologies pose a challenge for the existing regulatory framework.

This course is designed for students who want to get a better understanding of the legal framework that governs modern financial systems. The course will focus on concepts rather than quantitative analysis wherever possible. Students who wish to embark on a career in the financial services industry will find this course particularly useful since a thorough understanding of regulation and compliance has become increasingly important for finance professionals due to the large amount of new regulation enacted in recent years.

Learning outcomes

After completing this course, students will:

  • Understand financial market imperfections and how they can be addressed by financial regulation.
  • Have knowledge about the global financial crisis and how it highlighted shortcomings of the existing regulatory framework.
  • Understand the various forms of contagion and systemic risk and how regulation prior to the global financial crisis failed to safeguard financial stability.
  • Have a thorough knowledge and understanding of the new regulatory framework implemented after the global financial crisis.
  • Understand the rationale behind market conduct regulation and how it complements prudential regulation.
  • Have broad knowledge about the most important innovations in fintech and understand how they disrupt the financial services sector and challenge existing financial regulation.