Study

This course provides an introduction to the law and regulation of banks. It places an emphasis on the role that banks play in the American financial system and economy, the privileges that the government provides to banks, and how regulators aim to provide those privileges in the context of a safe and sound financial system. The course will discuss what exactly banks are and what differentiates them from other kinds of corporations and from other kinds of financial firms. Distinct bank activities, such as lending with access to cheap deposit insurance, their ability to expand the money supply, accessing government payments infrastructure, will be discussed and explored. The course also explores the unique way in which the banking system is supervised – through examination and monitoring, including an enforcement system largely taking place outside of the courtroom and conducted by several overlapping federal and state regulators. The law and regulation of banks will be discussed using three inflecting narratives — (i) the historical, (ii) the economic; and (iii) the doctrinal. The context for these narratives are various banking crises, including the global financial crisis taking place in 2008; the COVID-19 pandemic, and the 2022 failure of Silicon Valley Bank. Regulatory tools -- such as examination, capital rules, living wills, stress tests, concentration limits, enhanced prudential supervision, and failed bank resolutions -- will be considered, with an eye towards evaluating their past effectiveness and their ability to be useful in dealing with other financial crises, such as the climate crisis. Finally, the course will discuss the ways in which banking regulatory reform happens in the context of developments related to non-bank financial institutions because banks are interconnected with other firms such as financial technology companies, insurance companies, bank service providers, and government sponsored enterprises related to housing.

Banking has evolved rapidly in just a few years. Global trade and investment have been supported and promoted by an emerging global financial system. This has in turn encouraged the growth of giant universal banks, based in the United States, the United Kingdom, mainland Europe, China and Japan. Most modern banks of any significant size (greater than $100 billion in total assets) have transnational and often truly global operations, but they also create major new risks and regulatory challenges. The debate over big banks and "too big to fail" concerns continued to be an important public policy concern in the 2016 Presidential election campaign and is certain to be so for the 2020 election. Since the Global Financial Crisis of 2008, the largest in a long run of domestic and international crises since the Great Depression of the 1930s, a new Dodd-Frank framework has been emerging. This framework has fundamentally changed the way in which such financial institutions are regulated. After more than a decade of reform, however, the framework remains controversial, at least in the United States, and executive and congressional efforts to reverse the Dodd-Frank and Basel models were deployed under the previous Administration, with some success. This controversy has now become more complicated in light of actions taken by the Treasury Department and the Fed to address financial and economic difficulties inflicted by COVID-19. Climate change is also starting to have a deep impact on financial markets, and this in turn is shaping some of the actions of regulators and banks. The walls between the three main sectors of finance - banking, securities and insurance - have broken down, yet at their core banks continue to be somewhat unique in their functions and the challenges they present for financial stability.

This course will review all the domestic and international regulatory developments since the Global Financial Crisis, focusing on the established and emerging regulatory architectures and systems, both domestic and international, currently proposed reforms, and future challenges and prospects for global and domestic financial reform. 

Banking has evolved rapidly in just a few years. Global trade and investment have been supported and promoted by an emerging global financial system. This has in turn encouraged the growth of giant universal banks, based in the United States, the United Kingdom, mainland Europe, China and Japan. Most modern banks of any significant size (greater than $100 billion in total assets) have transnational and often truly global operations, but they also create major new risks and regulatory challenges. The debate over big banks and "too big to fail" concerns continued to be an important public policy concern in the 2016 Presidential election campaign and is certain to be so for the 2020 election. Since the Global Financial Crisis of 2008, the largest in a long run of domestic and international crises since the Great Depression of the 1930s, a new Dodd-Frank framework has been emerging. This framework has fundamentally changed the way in which such financial institutions are regulated. After more than a decade of reform, however, the framework remains controversial, at least in the United States, and executive and congressional efforts to reverse the Dodd-Frank and Basel models were deployed under the previous Administration, with some success. This controversy has now become more complicated in light of actions taken by the Treasury Department and the Fed to address financial and economic difficulties inflicted by COVID-19. Climate change is also starting to have a deep impact on financial markets, and this in turn is shaping some of the actions of regulators and banks. The walls between the three main sectors of finance - banking, securities and insurance - have broken down, yet at their core banks continue to be somewhat unique in their functions and the challenges they present for financial stability.

This course will review all the domestic and international regulatory developments since the Global Financial Crisis, focusing on the established and emerging regulatory architectures and systems, both domestic and international, currently proposed reforms, and future challenges and prospects for global and domestic financial reform. 

Banking has evolved rapidly in just a few years. Global trade and investment have been supported and promoted by an emerging global financial system. This has in turn encouraged the growth of giant universal banks, based in the United States, the United Kingdom, mainland Europe, China and Japan. Most modern banks of any significant size (greater than $100 billion in total assets) have transnational and often truly global operations, but they also create major new risks and regulatory challenges. The debate over big banks and "too big to fail" concerns continued to be an important public policy concern in the 2016 Presidential election campaign and is certain to be so for the 2020 election. Since the Global Financial Crisis of 2008, the largest in a long run of domestic and international crises since the Great Depression of the 1930s, a new Dodd-Frank framework has been emerging. This framework has fundamentally changed the way in which such financial institutions are regulated. After more than a decade of reform, however, the framework remains fundamentally controversial, at least in the United States, and executive and congressional efforts to reverse the Dodd-Frank and Basel models are currently on the main national political agenda. This controversy has now become more complicated and has escalated in light of actions taken by the Treasury Department and the Fed to address financial and economic difficulties inflicted by COVID-19. Climate change is also starting to have a deep impact on financial markets, and this in turn is shaping some of the actions of regulators and banks. The walls between the three main sectors of finance - banking, securities and insurance - have broken down, yet at their core banks continue to be somewhat unique in their functions and the challenges they present for financial stability.

This course will review all the domestic and international regulatory developments since the Global Financial Crisis, focusing on the established and emerging regulatory architectures and systems, both domestic and international, currently proposed reforms, and future challenges and prospects for global and domestic financial reform. Conducted all online, the course will also involve substantial class interaction in addition to lectures. On a number of occasions students will take turns in presenting issues to “congressional committees,” also consisting of students, and Professors Baxter, Strauss and Reiners will be actively involved in these “hearings.”

Banking has evolved rapidly in just a few years. Global trade and investment has been supported and promoted by an emerging global financial system. This has in turn encouraged the growth of giant universal banks, based in the United States, the United Kingdom, mainland Europe, and in China and Japan. Most modern banks of any significant size (greater than $100 billion in total assets) have transnational and often truly global operations, but they also create major new risks and regulatory challenges. The debate over big banks and "too big to fail" concerns continued to be an important public policy concern in the 2016 Presidential election campaign. Since the Global Financial Crisis of 2008, the largest in a long run of domestic and international crises since the Great Depression of the 1930s, a new “Dodd-Frank” and “Basel III” framework has been emerging.  This framework has fundamentally changed the way in which such financial institutions are regulated.  After nearly a decade of reform, however, the framework remains fundamentally controversial, at least in the United States, and executive and congressional efforts to reverse the Dodd-Frank and Basel models are currently on the main national political agenda. 

The walls between the three main sectors of finance - banking, securities and insurance - have broken down, yet at their core banks continue to be somewhat unique in their functions and the challenges they present for financial stability. This course will review all the domestic and international regulatory developments since the Global Financial Crisis, focusing on the established and emerging regulatory architectures and systems, both domestic and international, currently proposed reforms, and  future challenges and prospects for global and domestic financial reform.

Banking has evolved rapidly in just a few years. Global trade and investment has been supported and promoted by an emerging global financial system. This has in turn encouraged the growth of giant universal banks, based in the United States, the United Kingdom, mainland Europe, and in China and Japan. Most modern banks of any significant size (greater than $100 billion in total assets) have transnational and often truly global operations, but they also create major new risks and regulatory challenges. The debate over big banks and "too big to fail" concerns continued to be an important public policy concern in the 2016 Presidential election campaign. Since the Global Financial Crisis of 2008, the largest in a long run of domestic and international crises since the Great Depression of the 1930s, a new “Dodd-Frank” and “Basel III” framework has been emerging.  This framework has fundamentally changed the way in which such financial institutions are regulated.  After nearly a decade of reform, however, the framework remains fundamentally controversial, at least in the United States, and executive and congressional efforts to reverse the Dodd-Frank and Basel models are currently on the main national political agenda. 

The walls between the three main sectors of finance - banking, securities and insurance - have broken down, yet at their core banks continue to be somewhat unique in their functions and the challenges they present for financial stability. This course will review all the domestic and international regulatory developments since the Global Financial Crisis, focusing on the established and emerging regulatory architectures and systems, both domestic and international, currently proposed reforms, and  future challenges and prospects for global and domestic financial reform.

Syllabus: 304.01.Fall2018-syllabus.docx34.49 KB

Banking has evolved rapidly in just a few years. Global trade and investment has been supported and promoted by an emerging global financial system. This has in turn encouraged the growth of giant universal banks, based in the United States, the United Kingdom, mainland Europe, and in China and Japan. Most modern banks of any significant size (greater than $100 billion in total assets) have transnational and often truly global operations, but they also create major new risks and regulatory challenges. The debate over big banks and "too big to fail" concerns continued to be an important public policy concern in the 2016 Presidential election campaign. Since the Global Financial Crisis of 2008, the largest in a long run of domestic and international crises since the Great Depression of the 1930s, a new “Dodd-Frank” and “Basel III” framework has been emerging.  This framework has fundamentally changed the way in which such financial institutions are regulated.  After nearly a decade of reform, however, the framework remains fundamentally controversial, at least in the United States, and executive and congressional efforts to reverse the Dodd-Frank and Basel models are currently on the main national political agenda. 

The walls between the three main sectors of finance - banking, securities and insurance - have broken down, yet at their core banks continue to be somewhat unique in their functions and the challenges they present for financial stability. This course will review all the domestic and international regulatory developments since the Global Financial Crisis, focusing on the established and emerging regulatory architectures and systems, both domestic and international, currently proposed reforms, and  future challenges and prospects for global and domestic financial reform.

Banking has evolved rapidly in just a few years. Global trade and investment has been supported and promoted by an emerging global financial system. This has in turn encouraged the growth of giant universal banks, based in the United States, the United Kingdom, mainland Europe, and in China and Japan. Most modern banks of any significant size (greater than $100 billion in total assets) have transnational and often truly global operations, but they also create major new risks and regulatory challenges. The debate over big banks and "too big to fail" concerns continue to be an important public policy concerns in the 2016 Presidential election campaign. Since the Global Financial Crisis of 2008, the largest in a long run of domestic and international crises since the Great Depression of the 1930s, a new framework has been emerging that fundamentally changes the way in which such financial institutions must be regulated. The walls between the three main sectors of finance-banking, securities and insurance-have broken down, yet at their core banks continue to be somewhat unique in their functions and the challenges they present for financial stability. This course will review this development and focus on the established and emerging regulatory architectures and systems, both domestic and international, as well as the future challenges and prospects for global and domestic financial reform.

Although there will be a substantial amount of statutory and some important case law, the course will be of interest to, and manageable by, graduate students in public policy, economics and business studies.

There will be a 3-hour closed book exam.