ECM1310 - INTERNATIONAL FINANCE POLICY AND FINANCIAL REGULATIONS

Module Identifier

ECM1310

Module Title

INTERNATIONAL FINANCE POLICY AND FINANCIAL REGULATIONS

Academic Year

2005/2006

Co-ordinator

Dr Mark J Rhodes

Semester

Semester 1

Course delivery

Lecture

Seminars / Tutorials

Assessment

Assessment Type	Assessment Length/Details	Proportion
Semester Exam	2 Hours	80%
Semester Assessment	2,000 word assignment	20%
Supplementary Exam	2 Hours	100%

Learning outcomes

On completion of the module students will be able to

Explain the rationale for intervention in financial markets both at a national and international level.
Outline the financial and regulatory structure in the UK and its relationship to other institutions.
Discuss the interdependence of transnational financial institutions in achieving policy objectives.
Critically evaluate how financial architecture is drawn from the rationale for regulation.
Apply the above learning outcomes to the policy challenges of a national or transnational institution.

Aims

The module will examine the causes and consequences of market failures in financial services and markets. We will then discuss the rationale for intervention in financial markets both when this serves to address market failures and when intervention is motivated by other factors. The structure and nature of financial regulation in the UK will be used to illustrate how the principles discussed translate into practice. The rationale for intervention when a firm or market faces a crisis also informs our understanding of the structure and activities of international financial institutions such as the world bank and international monetary fund. The second part of the module will discuss the formation and role of these institutions.

Brief description

This module will consider why financial firms and markets are subject to specific and often strict regulation. Discussion then moves to consider how international institutions have emerged to co-ordinate or mimic regulation at a national level.

Content

Rationale for Regulation
Systemic Risk
State Intervention
Institutional Structure in the UK
Interdependence of Financial Firms and Markets
Bretton Woods - Causes and Consequences
Other International Financial Institutions (IFI)
Roles of IFIs in Protecting Financial Stability

Reading Lists

Books
** Recommended Text
D Llewellyn (1999) The Economic rationale for Financial Regulation Financial Services Authority, Occasional Paper 1
H Evans (2000) Plumbers and Architects A supervisory perspective on international financial architecture Financial Services Authority, Occasional Paper 4
C Briault (2002) Revisiting the rationale for a single financial services regulator Financial Services Authority, Occasional Paper 16
M Fry (1994) Money, Interest and Banking in Economic Development 2nd edition. John Hopkins
G M Meier (1989) Leading Issues in Economic Development 5th edition. Oxford
C Goodhart, P Hartman, D Llewellyn, L Rojas-Suarez, S Weisbrod (1998) Financial regulation; Why, how and where now? Routledge
B V Yarbrough & R M Yarbrough (2000) The world economy; Trade and Finance 5th edition. Dryden
D W Daimond & P H Dybvig (1983) Bank runs, deposit insurance and liquidity Journal of Political Economy, Vol.91, No., pp.401-419.

Notes

This module is at CQFW Level 7