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MODULE SPECIFICATION TEMPLATE
MODULE DETAILS
Module title
Economic and Legal Aspect of Financial Regulation
Module code
EC317
Level
Level 4
Level 5
Level 6
Level 7
Credit rating
20
Pre-requisites for registration on this module
EC161, EC271, EC284
eventually it is anticipated that these
will be specified in terms of learning
outcomes; in the interim they should
be specified in terms of other module codes, or equivalent
Type of module
20 credit year-through module
Period of time over which it is delivered and mode of delivery
Brief description of module content and/ or aims
Overview (max 80 words)
The module is aimed at final year students on specialised finance degrees. It will provide a methodological framework against which the
role and effectiveness of financial regulation can be assessed, together with an introduction to the relevant laws that impact on persons authorised to conduct financial business in the UK. It will examine the
character of economically motivated and related crime, the relationship of financial crime and corporate misconduct. Fraud, market
abuse, and money laundering will be addressed in terms of prevention
and control. In particular, it will consider the implications for regulation
of the existence of different types of financial intermediaries, the regulatory response to financial crises, the relationship between financial
innovation and regulation, the implications of increased globalisation
of financial services and the arguments in favour of removing regulation from the financial sector. It will also provide case studies of different national, supranational and international frameworks for financial
regulation.
Module team/ author/ coordinator(s)
Dr. Walter W. Heering, Dr. Anil Yilmaz-Vastardis.
Semester 1 or 2
1 through 2
Site/ campus where delivered
Moulsecoomb
Field(s) for which module is appropriate and status in that field
Field
Status (mandatory/ compulsory/ optional)
Course(s) for which module is appropriate and status on that course
Template updated: June 2011
Course
Status (mandatory/ compulsory/ optional)
BSc (Hons) Finance and Investment
Compulsory
MODULE AIMS, ASSESSMENT AND SUPPORT
Aims
Learning outcomes/ objectives
The overall aim of this module is to build on the basic economic
framework established during the first and second years of the degree
and use this framework to analyse the role of financial regulation. It
will also introduce students to the legal aspects of financial regulation.
In particular, aims are to:

Provide a thorough understanding of different types, forms and
problems of financial regulation.

Develop an awareness of the continuing debate on financial regulation.

Understand the complexity of modern financial systems and the
implications for regulation.

Develop the ability to analyse problems of financial regulation from
an economic perspective.

Understand the interplay between legal and economic systems at
both a domestic and international level of financial regulation. Focusing on the relationship of financial crime to organised crime
and corporate misconduct.

Provide an understanding of different arrangements for financial
regulation.
On completion of this module students should be able to:
Subject specific:

Demonstrate an understanding of the concepts underpinning financial regulation.

Demonstrate an understanding of the legal aspects of financial
regulation.

Demonstrate an understanding of contemporary developments in
financial regulation.

Critically evaluate the central concepts and develop an awareness
of their significance.

Integrate economic concepts and institutional frameworks of financial regulation.

Analyse and evaluate the law as applied to the problems or issues
under consideration.
Cognitive:
Template updated: June 2011

Demonstrate critical and analytical thinking and recognise where
the particular skills or ideas, learned on the course, may be relevant for solving new problems.

Demonstrate flexibility of thinking that will help students to meet
and adapt to new and unforeseen situations.

Act independently in planning and managing tasks, identify necessary
resources, and reflect critically on their own learning.

Communicate effectively, both orally and in writing, in a form appropriate to the intended audience.
Content
1. Economic principles of financial regulation

Economic rationale for regulation: Nature of financial markets
and institutions; regulation as measures to mitigate market failures.

Bank and non-bank regulation: Differing nature of banks and
other financial intermediaries; regulatory response to banks and
non-bank intermediaries.

Bank runs and financial crises: The mechanism of bank runs;
deposit insurance and last resort lending.

The impact of financial crises: Problems arising from systemic
risk and contagion and the implications for regulation; problems
arising from fraudulent activity and regulators' responses.
2. Institutional frameworks of financial regulation

Regulation in practice: The regulatory environment with specific
reference to regulatory institutions in the UK, EU and USA; supranational and international financial regulation.

The need for a global perspective on regulation: The challenge
of globalisation; international lending of last resort; global financial
architecture and the need for international cooperation in financial
regulation.
3. Legal aspects of financial regulation
Teaching and learning
strategy
Allocation of study hours to activities
(including pre-module activities,
contact time, private study time and
assessment)

The English legal system: Sources of law including European
Community law; the court structure; arbitration; human rights.

The Law of Contract: The nature of contract; exclusion clauses;
the effect of breach.

The law of Torts, negligence, professional negligence.

Business organisations: Agency Law, Sole traders; partnerships; limited liability partnerships; companies.

Company law: Nature and functions of companies, private and
public. Consequences of incorporation. Formation and constitution
of the company, registration. Management and administration,
corporate governance, directors. Majority control and minority protection. Corporate misconduct, DTI investigations, insider dealing,
Proceeds of Crime Act money laundering. Bribery Act, Fraud, Insolvency, voluntary and compulsory winding up, administration.

Financial Regulation – Legal Framework in the UK and EU
The module will use a mix of teaching and learning approaches, including those detailed below. Students are expected to plan their own
study time.
Lectures:
20
Open Learning:
Seminars:
20
Self Study:
Workshops:
0
Total:
Learning support
Including indicative reading, computer packages, field trips etc
0
160
200
Indicative Reading:
Primary Source Material
Law Reports, Statutes, Statutory Instruments
The latest editions of:
Dewatripont, M. & Tirole, J., The Prudential Regulation of Banks, MIT
Press.
Template updated: June 2011
Elliott,C. & Quinn,F., The English Legal System. London: Longman
Goodhart, C. (Ed.), Financial Regulation, Routledge.
Goodhart, C. and G. Illing (Eds.), Financial Crises, Contagion, and the
Lender of Last Resort. A Reader, OUP.
Hall, M., Banking Regulation and Supervision: A Comparative Study of
the UK, USA and Japan, Edward Elgar Publishing.
Jones, L. Introduction to Business Law, OUP.
Kohn, M., Financial Institutions and Markets, OUP.
Mishkin, F. S. and S. G. Eakins, S. G., Financial Markets and Institutions, Addison-Wesley.
Spencer, P. D., The Structure and Regulation of Financial Markets,
OUP
Valdez, S., An Introduction to Global Financial Markets, PalgraveMacmillan.
Wild, C., & Weinstein, S., Smith & Keenan’s Company Law, Pearson.
Websites:
BoE; FSA; US Fed; EC Commission; ECB. Lawtel, Lexis Library,
Westlaw.
Assessment tasks
Including weighting of individual
tasks
Coursework (50%): Assignment will be a research based individual
coursework of 4,000. One fifth of the assignment mark will be based
on a work-in-progress seminar presentation.
Examination (50%): a two hour close book exam.
EXAMINATION INFORMATION
Area examination board
Economics, Law
External examiners
Name
Date appointed
QUALITY ASSURANCE
Date of first approval
Only complete where this is not the
first version
Date of last revision
Only complete where this is not the
first version
Date of approval for this
version
March 2012
Version number
1
Modules replaced
EC386, LW270
Specify codes of modules for which
this is a replacement
Template updated: June 2011