Prerequisite: Regulation of Financial Institutions , Capital Markets Regulation, or by permission of instructor.
Exam Type: Last Class Take-Home
This course will examine two kinds of topics: (1) more in-depth treatment of key elements of financial regulation covered in introductory courses; and (2) selected emerging issues. The former will include capital (theories and varieties of capital regulation, stress testing) and liquidity (experience with liquidity squeezes in periods of financial stress, rationales for liquidity regulation, role of central bank lender-of-last-resort facilities). The latter will include the regulation of systemic risk (more stringent regulation of systemically important bank and non-bank financial institutions, activities of unregulated firms, institutional mechanisms for systemic risk oversight), and some ways in which financial technology innovation (Fintech) poses challenges for financial regulation. A point of emphasis across topics will be how the Financial Crisis of 2007-2009 led to changes in financial regulation.