|| ECM1310 |
|| INTERNATIONAL FINANCE POLICY AND FINANCIAL REGULATIONS |
|| 2007/2008 |
|| Mrs Sangeeta Khorana |
|| Semester 1 |
| Course delivery
|| Lecture || 2 Hours. |
|| Seminars / Tutorials || 5 Hours. |
|Assessment Type||Assessment Length/Details||Proportion|
|Semester Exam||2 Hours ||80%|
|Semester Assessment|| 2,000 word assignment||20%|
|Supplementary Exam||2 Hours ||100%|
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.
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.
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.
Rationale for Regulation
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
** Essential Reading
Goodhart, C; Hartman, P; Llewellyn, D; Rojas-Suarez, L; Weisbrod, S (1998) Financial Regulation; Why, how and where now?
** 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
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.
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
This module is at CQFW Level 7