This seminar provides an introduction to the international regulation of financial markets. No prior familiarity with financial regulation is required. The course focuses on three issues:
– Why should financial markets be controlled? This brief introductory session will discuss the need for financial regulation. What is so special about banks and other financial intermediaries that calls for state intervention?
– How can financial markets be controlled? Introduction to the international financial regulatory architecture. Whereas financial markets and financial actors operate on a global scale, regulation and supervision is carried out on a national or – in the case of the EU – supranational level. How then can one prevent those global players to use the loopholes of nationally fragmented regulation and supervision? We will look at the setup of the international regulatory architecture and its core actors (G20, Financial Stability Board, Basel Committee on Banking Supervision, International Organization of Securities Commissions). We will discuss the role of these actors in creating safer global markets and how they achieve global regulatory harmonisation.
– Shaping the markets I: The case of the EU. Not only does the EU have a strong voice in the main international bodies (G20 etc.). It can implement and further develop international standards for a market with over 500 million people. The attractiveness of such a huge market gives the EU an impressive leverage to influence financial regulation in third countries. We will look at the principle of third country equivalence as a mechanism which the EU uses in order to achieve international regulatory convergence on the terms that the EU defines.
– Shaping the markets II: The case of the US. The US is (still) the leading financial market in the world. As is the case for the EU, it can use its market power to shape the behaviour of foreign firms and governments. We will look at the example of the US sanctions of Iran to see how the US can manage to police foreign banks all over the world.
Preliminary presentation topics:
– Global watchdogs for global banks: Do we need a World Financial Authority?
– Soft law in international regulation: Is it really soft?
– The Basel III capital standards for financial institutions: What are they and are we safe now?
– If big banks are a problem: Why don't we make them smaller?
– The G20: Democratic legitimation vs. efficient regulation, or: how can one get something done while including all the stakeholders?
– The Financial Stability Board: How an underperformer became a rock star in regulation.
– The International Monetary Fund: A lender of last resort becomes a regulatory standard setter.
– EU financial regulation and the politics of third country equivalence.
– Exporting regulatory principles I: The example of the EU regulation on rating agencies.
– Exporting regulatory principles II: The example of derivatives regulation.
– The UK as a third country: What will happen to the London Clearinghouse?
– A wall around Europe: How Europe limits chinese investments and what to think about it.
– US primary and secondary sanctions: What do they mean for European banks?
– The case of Reza Zarrab: What do US courts say about the extraterritorial reach of US law?
– US Iran sanctions: Does the EU have an answer for its banks?
Es besteht Anwesenheitspflicht.
Date: Thursday, March 21, 2019
Time: 14:00 - 16:00
The seminar will be held in three parts. The intro-ductory session, the lecture session, and the presentation session. In the introductory session, I will briefly talk about the seminar topics and how the seminar is structured, including the grading requirements for the students. I will also start on the first topic (why should financial markets be controlled?) to give everyone a feeling about the course. I will also be available for further questions.
Date: Thursday, April 4, 2019
Time: 9:00-12:00; 14:00 - 16:00
In this session I will present the main seminar top-ics in a lecture form. The objective is to provide the students with the basic knowledge so that they can find a presentation topic of interest.
Student Presentation Session
Date: Thursday, May 2, 2019
Time: 9:00 - 12:00; 14:00 - 16:00
In this session students will present their research on the seminar topics. Students will pair up in groups of two and give a presentation of 20 minutes, followed by a discussion. Each student is required to ask at least one question or make at least one comment regarding the presentation of the other students.
Grading is based on the oral presentation and on the general participation (by rounding up or rounding down the presentation grade).