Derivatives: Financial Markets, Law and Policy

Modern capital and financial markets rely on a wide variety of complex instruments, including Treasury securities, structured debt and equity instruments, and derivatives of various kinds.  Public awareness regarding these instruments has grown since the Financial Crisis of 2008 because they are thought to have played an important role in both the rapid growth of financial markets (“financialization”) and their destabilization.  Yet these instruments and the role they play in modern markets remain little understood.  A basic understanding of these instruments has now become important in modern financial law practice and any discussions on financial policy and regulation.

This course will review the workings of derivative instruments in the capital markets and how such instruments themselves are used.  The relationship between banking and capital markets, and between government and the private markets, will be explored, as will the most important legal and fiduciary responsibilities involved.  While not highly technical, the various principal types of government securities and derivatives will be examined. 

Warren Buffet once called derivatives “weapons of mass financial destruction.”  We will consider the numerous public policy issues relating to derivatives, their role in the Crisis of 2008 (and more recent financial distress such as the Eurozone crisis and the US debt ceiling controversy), the history of attempts to regulate these instruments, and the current regulatory structure.

Required Coursework

The 3-credit graded requirements for the course will be:

  1. A thirty-page paper, to be submitted by Friday, April 14 2017 (80%); the opportunity for JD writing credit will be given to the first five students who present research proposals, approved by me, commit to completing their drafts by Friday March 10 for grading and comments by me, and submit their final drafts in response to comments by the last day of class for the semester (when all papers will be due).
  2. An individual class presentation, of 20 minutes in length (10%), on the early draft of the 3-credit paper; and
  3. Overall class participation (10%).The course will be highly interactive and graded on this basis.

The course will be highly interactive and graded on this basis.

Course Frequency*
Course Areas of Practice

Sections

Spring 2017
2017
Course Number Course Credits Evaluation Method Instructor Meeting Day/Times Room

710.01 3
  • Final research paper (25+ pages in length)
  • Oral presentation
  • Class participation
Lawrence G. Baxter TuTh 1:45-3:05 PM 4042

Modern capital and financial markets rely on a wide variety of complex instruments, including Treasury securities, structured debt and equity instruments, and derivatives of various kinds.  Public awareness regarding these instruments has grown since the Financial Crisis of 2008 because they are thought to have played an important role in both the rapid growth of financial markets (“financialization”) and their destabilization.  Yet these instruments and the role they play in modern markets remain little understood.  A basic understanding of these instruments has now become important in modern financial law practice and any discussions on financial policy and regulation.

This course will review the workings of derivative instruments in the capital markets and how such instruments themselves are used.  The relationship between banking and capital markets, and between government and the private markets, will be explored, as will the most important legal and fiduciary responsibilities involved.  While not highly technical, the various principal types of government securities and derivatives will be examined. 

Warren Buffet once called derivatives “weapons of mass financial destruction.”  We will consider the numerous public policy issues relating to derivatives, their role in the Crisis of 2008 (and more recent financial distress such as the Eurozone crisis and the US debt ceiling controversy), the history of attempts to regulate these instruments, and the current regulatory structure.

Required Coursework

The 3-credit graded requirements for the course will be:

  1. A thirty-page paper, to be submitted by Friday, April 14 2017 (80%); the opportunity for JD writing credit will be given to the first five students who present research proposals, approved by me, commit to completing their drafts by Friday March 10 for grading and comments by me, and submit their final drafts in response to comments by the last day of class for the semester (when all papers will be due).
  2. An individual class presentation, of 20 minutes in length (10%), on the early draft of the 3-credit paper; and
  3. Overall class participation (10%).The course will be highly interactive and graded on this basis.

The course will be highly interactive and graded on this basis.

Enrollment Restrictions
None
2016
Spring 2016
Course Number Course Credits Evaluation Method Instructor Meeting Day/Times Room

710.01 3 Lawrence G. Baxter MW 11:00-12:20 PM 4042

Modern capital and financial markets rely on a wide variety of complex instruments, including Treasury securities, structured debt and equity instruments, and derivatives of various kinds.  Public awareness regarding these instruments has grown since the Financial Crisis of 2008 because they are thought to have played an important role in both the rapid growth of financial markets (“financialization”) and their destabilization.  Yet these instruments and the role they play in modern markets remain little understood.  A basic understanding of these instruments has now become important in modern financial law practice and any discussions on financial policy and regulation.

This course will review the workings of derivative instruments in the capital markets and how such instruments themselves are used.  The relationship between banking and capital markets, and between government and the private markets, will be explored, as will the most important legal and fiduciary responsibilities involved.  While not highly technical, the various principal types of government securities and derivatives will be examined. 

Warren Buffet once called derivatives “weapons of mass financial destruction.”  We will consider the numerous public policy issues relating to derivatives, their role in the Crisis of 2008 (and more recent financial distress such as the Eurozone crisis and the US debt ceiling controversy), the history of attempts to regulate these instruments, and the current regulatory structure.

Required Coursework

The 3-credit graded requirements for the course will be:

  1. A thirty-page paper, to be submitted by Friday, April 14 2016 (80%); the opportunity for JD writing credit will be given to the first five students who present research proposals, approved by me, commit to completing their drafts by Wednesday March 9 for grading and comments by me, and submit their final drafts in response to comments by last day of classes (when all papers will be due).
  2. An individual class presentation, of 15 minutes in length (10%), on the early draft of the 3-credit paper; and
  3. Overall class participation (10%).The course will be highly interactive and graded on this basis.

The course will be highly interactive and graded on this basis.

Syllabus: File 710.01.Spring2016-syllabus.docx

Pre/Co-requisites

To enroll in the course, a student must have completed or be concurrently registered in either Big Bank Regulation or Securities Regulation.

Enrollment Restrictions
None
2015
Spring 2015
Course Number Course Credits Evaluation Method Instructor Meeting Day/Times Room

710.01 3 Lawrence G. Baxter Tu/Th 11:00-12:20 pm Room 4042
Modern capital and financial markets rely on a wide variety of complex instruments, including Treasury securities, debt and equity instruments, and derivatives of various kinds.  Public awareness regarding these instruments has grown since the Financial Crisis of 2008 because they were seen to have played an important role in both the rapid growth of financial markets ("financialization") and their destabilization.  Such instruments and the role they play in modern markets remain little understood, yet some basic understanding has become important in modern financial law practice and discussions on financial policy.This course will review the workings of the capital markets and how financial instruments themselves are used.  The relationship between banking and capital markets, and between government and the private markets, will be explored, as will the most important legal and fiduciary responsibilities involved.  Various principal types of government securities and derivatives will be examined.Warren Buffet once called derivatives "weapons of mass financial destruction."  We will consider the numerous public policy issues relating to derivatives, their role in the Crisis of 2008 (and more recent financial crises), the history of attempts to regulate these instruments, and the current regulatory framework.Required CourseworkThe course will be graded and will likely include both a written research paper component and a short exam (2 hours).Required TextCourse reading materials will be supplied by the Professor.

Pre/Co-requisites
None
Enrollment Restrictions
None
2014
Spring 2014
Course Number Course Credits Evaluation Method Instructor Meeting Day/Times Room

710.01 3 Lawrence G. Baxter Tu/Th 10:40-12:01 pm Tu/Th 10:40-12:01 pm Room 4042
Modern capital and financial markets rely on a wide variety of complex instruments, including Treasury securities, debt and equity instruments, and derivatives of various kinds.  Public awareness regarding these instruments has grown since the Financial Crisis of 2008 because they were seen to have played an important role in both the rapid growth of financial markets ("financialization") and their destabilization.  Such instruments and the role they play in modern markets remain little understood, yet some basic understanding has become important in modern financial law practice and discussions on financial policy.This course will review the workings of the capital markets and how financial instruments themselves are used.  The relationship between banking and capital markets, and between government and the private markets, will be explored, as will the most important legal and fiduciary responsibilities involved.  Various principal types of government securities and derivatives will be examined.Warren Buffet once called derivatives "weapons of mass financial destruction."  We will consider the numerous public policy issues relating to derivatives, their role in the Crisis of 2008 (and more recent financial crises), the history of attempts to regulate these instruments, and the current regulatory framework.Required CourseworkThe course will be graded and will likely include both a written research paper component and a short exam (2 hours).Required TextCourse reading materials will be supplied by the Professor.

Pre/Co-requisites
None
Enrollment Restrictions
None
2013
Spring 2013
Course Number Course Credits Evaluation Method Instructor Meeting Day/Times Room

710.01 3 Kimberly D. Krawiec M / W 4:30-5:51 pm Room 4046
Modern capital and financial markets rely on a wide variety of complex instruments, including Treasury securities, debt and equity instruments, and derivatives of various kinds.  Public awareness regarding these instruments has grown since the Financial Crisis of 2008 because they were seen to have played an important role in both the rapid growth of financial markets ("financialization") and their destabilization.  Such instruments and the role they play in modern markets remain little understood, yet some basic understanding has become important in modern financial law practice and discussions on financial policy.This course will review the workings of the capital markets and how financial instruments themselves are used.  The relationship between banking and capital markets, and between government and the private markets, will be explored, as will the most important legal and fiduciary responsibilities involved.  Various principal types of government securities and derivatives will be examined.Warren Buffet once called derivatives "weapons of mass financial destruction."  We will consider the numerous public policy issues relating to derivatives, their role in the Crisis of 2008 (and more recent financial crises), the history of attempts to regulate these instruments, and the current regulatory framework.Required CourseworkThe course will be graded and will likely include both a written research paper component and a short exam (2 hours).Required TextCourse reading materials will be supplied by the Professor.

Pre/Co-requisites
None
Enrollment Restrictions
None
2012
Spring 2012
Course Number Course Credits Evaluation Method Instructor Meeting Day/Times Room

710.01 3 Kimberly D. Krawiec M/W 4:30-5:51 pm M/W 4:30-5:51 pm Room 4045
Modern capital and financial markets rely on a wide variety of complex instruments, including Treasury securities, debt and equity instruments, and derivatives of various kinds.  Public awareness regarding these instruments has grown since the Financial Crisis of 2008 because they were seen to have played an important role in both the rapid growth of financial markets ("financialization") and their destabilization.  Such instruments and the role they play in modern markets remain little understood, yet some basic understanding has become important in modern financial law practice and discussions on financial policy.This course will review the workings of the capital markets and how financial instruments themselves are used.  The relationship between banking and capital markets, and between government and the private markets, will be explored, as will the most important legal and fiduciary responsibilities involved.  Various principal types of government securities and derivatives will be examined.Warren Buffet once called derivatives "weapons of mass financial destruction."  We will consider the numerous public policy issues relating to derivatives, their role in the Crisis of 2008 (and more recent financial crises), the history of attempts to regulate these instruments, and the current regulatory framework.Required CourseworkThe course will be graded and will likely include both a written research paper component and a short exam (2 hours).Required TextCourse reading materials will be supplied by the Professor.

Pre/Co-requisites
None
Enrollment Restrictions
None

*Please note that this information is for planning purposes only, and should not be relied upon for the schedule for a given semester. Faculty leaves and sabbaticals, as well as other curriculum considerations, will sometimes affect when a course may be offered.