LAW 611G - Law & Finance of Banking
Instructor: Simone Sepe
Th 3:30 PM - 6:20 PM • August 23 - December 8 • Fall 2021
Section 001 • 3 units • Graded • In Person
The course will discuss the economics of financial institutions such as commercial banks, investment banks, and insurance companies, explaining the market failures associated with such industries. This course will also examine why we need financial institutions and why they collapse. Among the recent examples of financial failures we will discuss are the AIG bailout, the Lehman Bankruptcy, and the Merrill Lynch bailout. Classical topics such as entry into the business of banking; the Dual Banking System; corporate governance of banks, activities restrictions and limitations on investments; the regulation of deposit taking; and safety and soundness regulation will be covered. Emphasis will be given to prudential regulation of financial institutions. Regulatory arbitrage* and ¿shadow banking¿** will be analytically treated. Particular attention will be paid to the ongoing financial crisis.