Level: 200 level. Read more information on levels in our FAQs

Fees:  Please see Fees and payments

Lectures: 36 hours 

Classes: 18 hours

Assessment*: One examination and one essay

Typical credit**: 3-4 credits (US) 7.5 ECTS points (EU)

*Assessment is optional

**You will need to check with your home institution

For more information on exams and credit, read Teaching and assessment

Introduction to legal methods or equivalent.

No specific knowledge of financial markets is required. However, students from other disciplines need to familiarise with a number of fundamental concepts, such as property, contract and insolvency,
before joining the course.

General Part:

The Anatomy of the Financial Market

• What is the financial market?
• Who is regulated, and why?
• Introduction to the 2007-2010 Financial Crisis
• Identification of main crisis accelerators

The ‘Why’: Rationales for Regulating the Financial Market

• Counterparty risk, operational risk and systemic risk
• Market Integrity and fairness
• The principal/agent problem
• Competition, market segmentation and infrastructures

The ‘How’: Key Elements and Tools of Financial Regulation

• The efficiency of ‘Value at Risk’ and other risk models
• Disclosure to retail and institutional clients
• Resilience of intermediaries and infrastructures
• Rules imposing risk-conscious internal management

The ‘Who’: Global and EU Regulatory and Supervisory Structure

• Financial Stability Board and G20
• Basel Committee and IOSCO
• EU Institutions and ECB
• National Supervisors and Regulators

Specific Policy Areas appertaining to the Financial Crisis:

Banking and Financial Stability: The Core of all Regulation and Supervision

• The role and importance of banks
• Soundness, safety and resilience of banks
• The role of regulatory capital

The Basel Bank Capital Accords: Sophistication vs. Efficiency?

• From Basel I to Basel II
• Basel III: Post-crisis developments
• From capital standards to leverage and liquidity standards
• Critique and outlook

Pulling the Shadow Banking Sector out of the Dark

• ‘Shadow banks’ and shadow banking
• Main concern: maturity and liquidity transformation
• Other concerns
• Regulation under FSB standards
• Critique and outlook

Wild West Banking vs. Utility Banking: Structural Reforms

• Risk implication of universal banks
• The Vickers, Liikanen and Volcker Models
• The US Dodd-Frank Act and EU Regulation proposal
• Recent industry-friendly setbacks
• Critique and outlook

Rating Agencies: Disdained Gatekeepers

• Rating agencies’ pre-crisis implications
• Inefficiencies of the concept
• Conflict of interests
• Recent regulatory measures, EU CRA Regulation
• Critique and outlook
   

Specific policies relating to FinTech:

Regulation of Fintech

• The relevant technologies: AI, DLT, etc.
• The relevant use cases: payment, credit scoring, etc.
• Regulatory challenges

Blockchain/DLT and Crypto Assets

• From Blockchain to DLT
• International Regulation of (genuine) Blockchains
• Why regulate Crypto Assets?
• How to regulate Crypto Assets?

Artificial Intelligence in Finance

• AI and Data origin
• AI and Data structure and processing
• Use cases: credit scoring, client interfaces, market predictions
• Ethical use of AI: Explainability and Interpretability
• Ethical use of data
• Financial exclusion caused by AI

• Understand the rationales and main elements of financial regulation, the ‘why’, ‘how’ and ‘who’. 
• Get to know the most important policy areas in the field of financial regulation.
• Acquire the knowledge and tools to follow and shape the debate around FinTech, in particular the regulatory challenges.

LSE’s Law Department is one of the world’s best. In the UK, it was ranked first for research outputs in the most recent Research Excellence Framework (REF) and in the top 5 law departments overall by The Complete University Guide in 2018. In the 2017 QS World University rankings, the Department was ranked seventh (out of 200 departments worldwide).

Many important subjects were first taught and examined systematically from an academic perspective in LSE’s Department of Law. We pioneered the study of banking law, taxation law, civil litigation, company law, labour law, family law, aspects of welfare law, and studies of the legal system and the legal profession, and continue to be the leading thinkers in our field.

On this three-week intensive programme, you will engage with and learn from full-time lecturers from the LSE’s law faculty.

There are two excellent background books on the financial markets (not specifically on regulation). They provide all necessary knowledge for those intending to take the course without having any prior knowledge of financial markets:

 P. Coggan, Inside the City – How the Money Machine Works   (Penguin Books, 2008) –written by a journalist, this is an accessible account for the non-specialist. It is highly recommended to read this book before coming to the course. Price around 10.00 GBP.

S. Valdez and P. Molyneux, An Introduction to Global Financial Markets 7^th or 8^thedition (Palgrave Macmillan) - this is a more detailed and technical introduction to financial markets which serves as a reference work during the course. It is recommended to purchase this book (it will be useful also after the course, a really good investment). Price around 30.00 GBP.

*A more detailed reading list will be supplied prior to the start of the programme

**Course content, faculty and dates may be subject to change without prior notice