Financial Sector Regulation

2019-2020

Course Objective

After completion of the course, you should be able to:
• understand the rationale, objectives and incentive effects of
financial regulation (Bridging Theory and Practice);
• apply key concepts from risk management to financial regulation,
including financial risks (e.g. credit risk) and non-financial risks
(e.g. operational risk) (Bridging Theory and Practice);
• evaluate key regulatory requirements for a given financial entity
(Academic Research Skills);
• evaluate the relevance of investor/client protection and market
conduct for financial regulation (Academic Research Skills);
• understand the political economy of financial regulation, including
unintended consequences, regulatory capture and the procyclical nature
of regulation (Bridging Theory and Practice).

Course Content

The financial sector is one of the most intensely regulated sectors in
the economy. A profound knowledge of financial regulation is essential
for understanding the functioning of financial markets and entities.
This is both relevant for those who work in the financial industry, and
for those whose firm is a customer of the financial industry. In this
course you learn to apply insights from finance to financial regulation.
You evaluate the relevance of key risk concepts from the finance
literature, such as credit risk, for financial regulation. The course
therefore takes financial risks as starting point, for which regulatory
standards apply across financial sectors, including banking, insurance,
and asset management. Then, the course will address non-financial risks
and their management. Overall, the course covers the impact of risks on
financial entities, the rationale of financial regulation, the
application of supervisory standards, and the evaluation of the overall
intended and unintended effects of regulation on behaviour. In the same
vein, the course deals with market functioning and investor and client
protection. You will apply regulatory standards such as those of the
Basel capital accords in banking and solvency in insurance. Moreover,
you will evaluate the relevance of transparency standards and market
conduct in market-based finance. Assignments are based on the
application of the actual European regulatory directives and regulations
to a specific topic. This includes, among others,
regulations such as the Capital Requirement Directive and Regulation
(CRD and CRR) in banking (which reflect the Basel accords), Solvency in
insurance, the Alternative Investment Fund Managers Directive (AIFMD)
for investment funds and the Markets for Financial Instruments Directive
(MiFID II).

Teaching Methods

Lectures and tutorials

Method of Assessment

Exam (individual assessment)
Assignment(s)

Literature

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General Information

Course Code E_BA_FSR
Credits 6 EC
Period P4
Course Level 400
Language of Tuition English
Faculty School of Business and Economics
Course Coordinator dr. P.J. Wierts
Examiner dr. P.J. Wierts
Teaching Staff prof. dr. S.G. van der Lecq

Practical Information

You need to register for this course yourself

Last-minute registration is available for this course.

Teaching Methods Lecture, Study Group
Target audiences

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