Accueil > Dealing, Negotiating and Communicating

KMPA 2905 - Financial regulation

Type d'enseignement : Seminar

Semester : Spring 2018-2019

Number of hours : 6

Language of tuition : English



Course Description

Dealing, Negotiating and Communicating Whilst the 2008 financial crisis seemed to be a “one off” in a world of “prosperity”, it is clear that it marked the end of a “golden era” of financial stability which started in the mid 80's and ended with it. Since the crisis (and may be also because of it), the financial world has entered a period of profound changes and uncertainty led by increased regulation, massive structural market distortion (role of central bank and QE), increased fragmentation of markets and volatility. Financial crises, which were a relatively rare occurrence since the 80's (1987-1997), are now a recurring and lasting theme that we have to learn to live with for the very foreseeable future (bailouts of several major financial institutions, Greek and Eurozone crisis, oil price collapse, Brexit?...). Hence it is important to understand how crises happen in order to anticipate them, and to be agile and ready to successfully tackle them. Evolution of financial market regulation following the financial crisis of 2007-2008. Numerous debates have attempted to shed light on the causes of the 2007-2008 crisis and the consequences of its management. Analyses of those causes have led to some consensus on its spread and impact in the European Union. Until then, the policy adopted by the European Union was focused on removing all obstacles to free competition, limiting itself to establishing a common basis without concern for the proper application of regulations, their adequacy to changes in financial practices and possible systemic risks in the event of a crisis. The first part of the course will focus on the financial crisis, its causes and lessons learned. We will shed light on the fact that the regulations were not adapted and were based too much on the willingness of the financial players themselves to estimate the risks of their actions. We will also examine how the European legislative framework and supervisory mechanisms have failed to improve competition, transparency of financial transactions and investor protection. In the second part, we will examine how profound reforms became inevitable and how these failures have accentuated the need for greater integration of EU-wide financial market supervision. We will see how the political powers, and in particular the European Parliament, have become involved in the debates and have forced Member States to accept a deeper integration requiring national supervisory authorities to abandon their traditional monopoly of supervising and punishing financial institutions in favor of the correspondingly strengthened European supervisory authorities. We will also look beyond structural and regulatory reforms, how the European Union has tried to put in place mechanisms to prevent and mitigate systemic risks and has opened an ongoing dialogue with the competent authorities of third countries (USA, Hong Kong, China etc.). Lastly, in the third part, we will take stock of the reforms, the improvements made, the weaknesses and the questions that remain. We will consider issues relating to strengthening the integration of banking and financial market supervision in Europe. We will shed light on the problems linked to regulatory divergences between the European Union and the United States and the weakness of global regulatory institutions. Finally, we will address the issues of possible market deconstruction/reconstruction and the regulation of post-Brexit European financial services.


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