FINANCIAL SERVICES REGULATION

SHE Level 5
SCQF Credit Points 15.00
ECTS Credit Points 7.50
Module Code MMN325919
Module Leader Paul Gallacher
School Glasgow School for Business and Society
Subject Finance and Accounting
Trimesters
  • A (September start)
  • B (January start)
  • C (May start)

Summary of Content

The aim of this module is to enable students to critically assess the operation of financial regulators and regulations, analysing both the theoretical basis for, and practical application of, those regulators and regulations. The module examines theoretical approaches to understanding regulations, regulatory structures, and the role of both the regulator and the regulated. It also sets that theory in context through the study of regulation in practice, both in the UK and internationally. In support of the aims of the programme, there is a particular focus on banking regulation and conduct of business regulation, as well as the importance of risk as a driver of both regulation and regulators

Syllabus

The Foundations of Financial Regulation b7 The Economic Rationale for Financial Regulation b7 Regulatory Structures - theory and practice b7 Principle-based and Rule-based Approaches to Regulation The Business of Regulation b7 Regulators in practice - UK regulatory practice b7 Conduct of Business Regulation b7 Regulation and the Consumer Banking Regulation b7 The Financial Crises and Systemic Risk b7 Basel, II and III (dealing with Credit, Market, and Liquidity Risk) b7 Post-crisis reforms and the international structure of regulation

Learning Outcomes

On successful completion of this module, the student should be able to:1. Critically evaluate the extent to which the provision of financial services requires to be regulated, and the legal and structural approaches to how regulation may be delivered, to produce an evidence-informed view on the purpose and usefulness of financial regulation.2. Critically discuss the development of banking regulation, both in a national and international context and, in this context, be able to appraise and discuss the causes and consequences of the great financial crisis as well as their implications for governments and financial institutions.3. Understand and evaluate the application of regulation to how financial institutions conduct their business, both in relation to internal operations and governance, as well as their customers, in order to assess the relevance of regulation in ensuring appropriate institutional behaviour4. Analyse the role of regulation in supporting financial services consumers in order to be able to evaluate the issues and challenges that arise in developing financial consumer policies.5. Understand and analyse current international developments in financial services regulation to be able to explain and assess national regulatory policies in a broader, comparative, context.6. Apply their knowledge of financial regulation to develop workable and ethical solutions to real-world problems in the financial services sector7. Understand and evaluate the importance of international and global approaches in financial regulation when considering the need to address the behaviour of financial institutions

Teaching / Learning Strategy

In line with the general aims of both the MSc International Banking Finance and Risk Management programme, and GSBS more generally, the learning outcomes of this module are delivered within a context of encouraging responsible leadership, an international perspective, and professionalism, through engaging students in the analysis, research and discussion of contemporary, real life issues. For students other than distance learning students, contact will normally be two hours of lectures and one hour of seminar each week. Lectures will be used to highlight the key issues in a specific topic and point the way towards relevant journal articles and other appropriate literature. Students will be then expected to prepare for following week 's seminar on each topic by engaging in literature searches, undertaking relevant reading and preparing responses to discursive and, where necessary, computational questions. In some cases, students will be asked to prepare work in advance of the lecture to facilitate a more interactive approach to the lecture, providing the basis for deepening professional skills, knowledge and understanding. Seminars will be conducted in workshop format providing the opportunity for student led and group task learning, with the aim of enhancing intellectual, critical and analytical skills, as well as common good attributes of leadership and responsibility. In the case of Distance Learning students, course materials will include interactive prompts and opportunities for reflection to allow the students to identify and engage with important learning points and issues arising in the course material. Module tutors will also make use of podcasts to emphasise important issues and learning points, or explain problematic issues that arise either face-to-face or online, to all students. Extensive use will be made of VLE to enhance the learning experience and engagement of all students on the module. One purpose of the VLE is as a repository for resources including key readings such as scanned material, journal articles, book chapters, digital book chapters, web-links, and embedded video clips. It is also a site of interactivity between all students, using the Discussion Board, blogs (including as part of the assessment) and online student groups to encourage discussion, analysis and reflection on the course content, as well as interpersonal and communication skills. For Distance Learning students, as well as asynchronous interaction, there will be synchronous sessions scheduled at key points in the module journey, and hosted via GCU Connect, in order to address important course material and concepts, as well as student questions or concerns Coursework 1 Each student will create their own blog on GCU Learn, developing an evaluative diary which brings together various threads of their investigation and analysis of the issues covered in the first half of the module. They will each post at least one blog post of 300 words for each of 5 of the first six weeks of the module. At the same time, they must also respond to one other blogger each week with a blog of no more than 100 words. Coursework 2 Each student will develop a case study based upon the experience of an international bank. They will be asked to examine particular regulatory issues and challenges that bank faces, and situate these challenges in an international regulatory context. They will also be expected to critically analyse the approach taken by that bank and its regulators and suggest alternative regulatory approaches where appropriate.

Indicative Reading

Acharya, V., Cooley, T., Richardson, M., Walter, I. (2010) Regulating Wall Street: The Dodd-Frank Act and the New Architecture of Global Finance, John Wiley and Sons Adenas, M. and Chiu, I. (2013) The Foundations and Future of Financial Regulation: Governance for Responsibility Alexander, K. and Dhumale, R. (2011) Research handbook on International Financial regulation, London, Edward Elgar 978 0 85793 045 3 Armour, J; D. Awrey; P. Davies; L. Enriques; J. N. Gordon; C. Mayer; and J. Payne. (2016). Principles of Financial Regulation (1 st Ed.). Oxford University Press. Avgouleas, E. (2012) Governance of Global Financial Markets: The Law, the Economics, the Politics, CUP Benston, G.J. (1998) Regulating Financial Markets: A Critique and some Proposals, Hobart Paper 135, London, The Institute of Economic Affairs Buckley et al. (2016) Reconceptualising Global Finance and its Regulation (2016) Cambridge University Press Brunnermeier, M., Crockett, A., Goodhart, C. Persaud, A. and Shin, H.S. (2009) The Fundamental Principles of Financial Regulation, London, Centre for Economic Policy and Research (available electronically from CEPR) Davies, H. (2010) The Financial Crisis, Who is to Blame, London, Polity Books Davies, H. And Green, D. (2008) Global Financial Regulation: The Essential Guide. Cambridge, Polity Press De Larosiere (2009) De Larosiere Report: The High Level Group on Financial Supervision in the EU, available electronically - see <http://ec.europa.eu/internal_market/finances/docs/de_larosiere_report_en.pdf> Dragomir, L. (2010) European prudential banking regulation and supervision: the legal dimension, <http://www.dawsonera.com/depp/reader/protected/external/AbstractView/S9780203856413/S27.53/0> Routledge -7 FSA (2008) Consumer Responsibility, London, Financial Services Authority (available electronically from FSA website) FSA (2009) The Turner Review: A Regulatory response to the global banking crisis, March 2009, London, Financial Services Authority (available electronically from FSA website) FSA (2009) A Regulatory response to the global banking crisis, Discussion Paper 09/2, March 2009, London, Financial Services (available electronically from FSA website) Group of Thirty (2008) The Structure of Financial Supervision: Approaches and Challenges in a Global Marketplace, Washington DC, available at: <http://www.group30.org/images/PDF/The%20Structure%20of%20Financial%20Supervision.pdf> Hudson, A. (2013) The Law of Finance (2 nd Edition), London, Thomson Reuters Kirk, J. and Ross, J. (2013) Modern Financial Regulation, Jordan Publishing Limited Labrosse, J., Olivares-Caminal, R., Sing, D. (2011) Managing Risk in the Financial System, Edward Elgar Publishing Ltd Llewellyn, D. (1999). The Economic Rationale for Financial Regulation, London, Financial Services Authority (available on FSA web site) MacNeil, I. and O'Brien, J. (2010) The Future of Financial Regulation, Hart Publishing Mills, A. (2008) Essential Strategies for Financial Services Compliance John Wiley & Sons, ISBN: 9780470519042 Mwenda, K (2006) Legal Aspects of Financial Services Regulation and the Concept of a Unified Regulator, The World Bank available electronically - see <http://siteresources.worldbank.org/INTAFRSUMAFTPS/Resources/Legal_Aspects_of_Financial_Sces_Regulations.pdf> Salami, I. (2012) Financial Regulation in Africa, Ashgate Schooner, H. and Taylor, M. (2009) Global Banking Regulation: Principles and Policies, Academic Press Tarullo, D. (2008) Banking on Basel: The Future of International Financial Regulation, The Peterson Institute for International Economics US Treasury Department (2009) Financial Regulatory Reform, A New Foundation: Rebuilding Financial Supervision and Regulation. available electronically - see <http://www.treasury.gov/initiatives/wsr/Documents/FinalReport_web.pdf> Wymeersch, E, Hopt, K. and Ferrarini, G, (2012) Financial Regulation and Supervision: A post-crisis analysis, Oxford University press Websites Bank of England: www.bankofengland.co.uk <http://www.bankofengland.co.uk> Bank for International Settlement: www.bis.org <http://www.bis.org> British Bankers Association: www.bba.org.uk <http://www.bba.org.uk> The Compliance Exchange: <http://ds.dial.pipex.com/jhalsey/> European Central Bank: www.ecb.int <http://www.ecb.int> Financial Conduct Authority (FCA): www.fca.org.uk <http://www.fca.org.uk> International Association of Insurance Supervisors: <http://www.iaisweb.org/> International Financial Risk Institute: www.risk.ifci.ch <http://www.risk.ifci.ch> International Monetary Fund: www.imf.org <http://www.imf.org> International Organisation of Securities Commission: www.iosco.org <http://www.iosco.org> Prudential Regulatory Authority: <http://www.bankofengland.co.uk/PRA> Risk Centre: www.riskcentre.com <http://www.riskcentre.com> The World Bank: www.worldbank.org <http://www.worldbank.org>

Transferrable Skills

1. Problem-solving - identifying the main concepts and issues in problem situations and formulating solutions will be accomplished through practical work in lectures, seminars and assessments 2. Leadership and interpersonal skills - will be emphasised throughout all learning activity. Seminars and online fora will be used to encourage co-operation and teamwork in the formulation and presentation of work 3. Communication - the ability to use appropriate language and form when writing and speaking will be enhanced by making verbal presentations in, and preparing written work for, seminars, as well as through coursework. 4. Research skills - the ability to enhance research skills will be acquired though carrying out research for class tasks and assessed coursework.

Module Structure

Activity Total Hours
Independent Learning (FT) 84.00
Lectures (FT) 24.00
Seminars (FT) 12.00
Assessment (FT) 30.00

Assessment Methods

Component Duration Weighting Threshold Description
Course Work 02 n/a 50.00 45% Case Study (2000 words)
Course Work 01 n/a 50.00 45% Blog (2000 words)