ECM1310 - INTERNATIONAL FINANCE POLICY AND FINANCIAL REGULATIONS

Module Identifier

ECM1310

Module Title

INTERNATIONAL FINANCE POLICY AND FINANCIAL REGULATIONS

Academic Year

2007/2008

Co-ordinator

Mrs Sangeeta Khorana

Semester

Semester 1

Course delivery

Lecture

2 Hours.

Seminars / Tutorials

5 Hours.

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
** Essential Reading
Goodhart, C; Hartman, P; Llewellyn, D; Rojas-Suarez, L; Weisbrod, S (1998) Financial Regulation; Why, how and where now? Routledge
** Supplementary Text
Fry, M (1994) Money interest and banking in economic development 2 Edition. Johns Hopkins
Grote, R and Marauhn, T (2006) The Regulation of International Financial Markets - Perspectives for Reform 1 Edition pp. 57-74. Cambridge
Kohn, M (2003) Financial Institutions and Markets 2 Edition. Oxford
Meier, G.M. (2005) Leading issues in economic development 8 Edition. Oxford

Journals
Bryant, J (1980) Journal of Banking and Finance A model of reserves, bank runs and deposit insurance 4 pp. 335-344.
Daimond, D.W. & Dybvig, P.H (1983) Journal of Political Economy Bank Runs, Deposit Insurance and Liquidity Volume 91:3 pp. 401-419.
Various Authors (2003) American Economic Review (May 2003) Papers and Proceedings 92:2 pp. 39-50 & 70-101.

Articles
Briault, C (2002) Revisiting the rationale for a single financial services regulator Financial Services Authority Occasional Paper 16
Evans, H (2000) Plumbers and Architects: A supervisory perspective on international financial architecture Financial Services Authority Occasional Paper 4
Llewellyn, D (1999) The economic rationale for financial regulation Financial Services Authority Occasional Paper 1

Notes

This module is at CQFW Level 7