710.02 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.

Final grades are based on a final exam and in class participation.

Enrollment Pre-/Co- Requisite Information

Students must have taken or be currently taking Big Bank Regulation and/or Securities Regulation and/or Corporate Finance.

Fall 2021

Course Number Course Credits Evaluation Method Instructor
Course Credits
Final Exam
Class participation
Gina-Gail S. Fletcher
Sakai site: https://sakai.duke.edu/portal/site/LAW.710.02.F21
Email list: LAW.710.02.F21@sakai.duke.edu
Degree Requirements
Course Requirements - JD
Course Areas of Practice