The goal of the course is to understand the ways in which financial regulation in the U.S. contributed to the financial crisis and whether the regulatory reform project currently underway will address those concerns. Thus the course will survey the U.S. pattern of the regulation of financial institutions as well as the legislation that presumably will be adopted before the course begins.
This course provides a broad introduction to the regulation of financial institutions in the United States. The course addresses the history of the banking industry in the United States, the basic rationales for regulating banks differently than other enterprises, the restrictions imposed upon banks and other financial institutions, the causes and consequences of bank failures and their relationship to regulation, and the rise of the shadow banking system. It also addresses the relationship among banking and insurance and securities activities and how these relationships have evolved over time.
The course pays significant attention to the causes of the 2007-2009 financial crisis and the reform efforts that are being pursued in its wake. The course considers the ways that financial regulation in the United States may have contributed to the financial crisis and what more financial regulation may have done to prevent it. It looks at particular changes required by The Dodd-Frank Wall Street Reform and Consumer Protection Act and the ongoing implementation efforts, focusing on changes intended to reduce systemic risk. The course further considers whether the regulatory reform project currently underway is likely to further the aim of promoting financial stability.