Session: Two
Prerequisites: Introduction to legal methods or equivalent
Dr Philipp Paech
LL206 is a novelty as it addresses both spheres of rulemaking for the financial markets, notably financial law and financial regulation, in one single course. Experience shows that approaching the framework for financial market governance exclusively from either of these worlds leaves us with a highly fragmented picture. Thus, the aim of this summer course is to establish a broad and complete foundation of knowledge of the laws and rules governing the various areas of financial market activity. This base will allow us to acquire specialist knowledge in one or the other area in a second step.
A sound understanding of the legal and regulatory framework requires that we approach each subject in a market context first. This short overview is essential with a view to understanding the permanent interaction between market behaviour and the legislators' and regulators' responses to it. Subsequently, its legal underpinnings and the regulatory framework will be analysed, taking into account international rules and developments as well as European legislation. Since the City of London is one of the globally most important financial markets, England will be taken as anchor-jurisdiction in order to develop patterns of global significance which are addressed by legislators and regulators around the world, in particular also looking at the European Union and the United States of America.Teaching will elaborate on a number of aspects, some of which are very topical:
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logic and the players of the financial market
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global regulatory architecture and the financial crisis
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the nature of banks, deposit taking
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issuance of debt and equity securities
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security interests, quasi-security and financial collateral
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structured finance, securitisation, asset-backed securities
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derivatives and credit default swaps
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master agreements and netting
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public investment funds, hedge funds and sub-categories, private equity
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stock exchanges, clearing and settlement
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prudential regulation, banks' balance sheets and Basel II and III
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rating agencies, crisis management, solutions to the financial crisis
The combination of the above will lead us to discussions on the legislative and regulatory response to the recent financial crisis and to an assessment of the effectiveness of changes which are currently under way.
Text
There are three texts (on market, law, and regulation) which will be used for many of the sessions.
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Market aspects: S. Valdez, Ph. Molyneux, An Introduction to Global Financial Markets, 6th ed., Plagrave-McMillan 2010, ca. £31
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Law: J. Benjamin, Financial Law, Oxford University Press 2007. This volume is available at a discounted price (ca. £50) at the bookshop on the LSE campus.
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Regulation: Iain G MacNeil, An Introduction to the law on financial investment, 2nd ed, Hart 2012, ca. £35.
A course reading pack will be provided in print for free consisting of additional texts, materials and cases. Lecture slides will be available for download during the course.
Lectures: 36 hours Classes: 12 hours
Assessment: Written work and one written examination