Programmes

International Financial Regulation

  • Summer schools
  • Department of Law
  • Application code SS-LL207
  • Starting 2020
  • Short course: Closed
  • Location: Houghton Street, London

UPDATE: Due to the global COVID-19 pandemic we will no longer be offering this course in summer 2020. Please check our latest news on this situation here.

This course uses the financial crisis of 2007-2010 as a starting point to explore the challenges of regulating global financial markets.

The course is internationally oriented and draws largely on the standards set by the global committees (FSB, Basel, etc.) and on the post-crisis rules adopted in the EU, with a few digressions and comparisons with the regulatory debate in the USA, without focusing in detail on any specific jurisdiction.  

The essential purpose of the course is, first, to understand the basics of policy making in the area of financial regulation, the ‘why, how & who’. Second, this course will turn to concrete areas of regulation, looking at the policy areas that have all been substantially reinforced after the financial crisis and that are considered the hottest topics in regulation. Thirdly, the course will focus on FinTech. Built on Dr. Paech’s experiences as the chairman of the relevant EU expert group, the regulatory challenges posed by FinTech will be dissected, with a particular focus on DLT/blockchain and crypto assets, as well as on the use of Artificial Intelligence in financial services.

The course is a good match with LL206 International Financial Law, which concerns the commercial law side of financial markets, together the courses provide for the full picture of financial markets law and regulation. However, participation in LL206 is not a formal prerequisite for taking LL207.

This course is designed to be of both high academic and direct practical value. It appeals to students preparing for a career in financial markets as well as to practitioners wishing to broaden their horizon. It will be of particular interest for the:

  • Private financial sector (strategy, management, compliance, legal, governmental and international affairs, etc)
  • Legal practice specialising in the above mentioned activities
  • Government and governmental agencies (policy makers from treasuries, ministries of economy/finance/justice, foreign office, etc.)
  • Central banks (management, legal, regulation and oversight, international affairs, etc.)
  • International organisation and EU organs and agencies (policy makers, strategy, legal, international affairs, etc.)
  • Non-governmental organisations and advocacy groups active in the field of international financial markets
  • Students interested in any of the above, or pursuing a masters programme related to financial markets

 


Session: Two
Dates: 13 July – 31 July 2020
Lecturer: Dr Philipp Paech


 

Programme details

Key facts

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

Prerequisites

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.

Programme structure

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

Course outcomes

  • 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.

Teaching

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.

Reading materials

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 7th or 8thedition (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

Sign up

Sign up

  • Please enter a valid email address. We will send you relevant material regarding the LSE Summer School programme.
  • Which course subject area(s) would you like to know more about?
  • Your privacy
    The details you give on this form will be stored on a secure database. LSE Summer School will use your data to send you relevant information about the School and to find out about your experiences of applying to LSE. The data on the form will also be used for monitoring purposes and to track future applications. LSE will not give or sell your details to any other third party organisation. Your data is subject to the LSE website terms and conditions and our Data Protection Policy. You can withdraw from our lists at any time by using the 'unsubscribe/manage email preferences' link that can be found in the footer of each email, or by contacting summer.school@lse.ac.uk.

How to Apply

Related Programmes

Competition Law and Policy: Controlling Private Power

Code(s) SS-LL200

Corporate Finance Law

Code(s) SS-LL301

Request a prospectus

  • Name
  • Address

Register your interest

  • Name

Speak to Admissions

Content to be supplied