Banking Law & Regulation (LAW-857-001)
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This course examines the development of financial intermediaries in the United States, including the banking, thrift, insurance, and securities industries. Traditionally, in the United States these industries have been separated with regulatory control divided between the states and the federal government. Sometimes this separation and division of oversight was by conscious design and sometimes it was by historical happenstance. Some have called our banking system a "historical accident." The debate between Thomas Jefferson and Alexander Hamilton lives on. Jefferson feared the concentrated power of large money-center financial institutions while Hamilton believed they were a necessity to assure economic prosperity and financial stability. Our dual banking system is to some extent a product of this debate. The separation of commercial banking, investment banking, and insurance reached its high-water mark in reaction to the Great Depression. By the 1980's and 1990's, however, that separation began to give way. Today, through the use of the holding company corporate structure, large holding companies participate in all three industries through their affiliates and subsidiaries. In this course, we will study the modern financial services structure as well as the dramatic upheaval that has taken place as a result of the credit crisis that began in 2007-08 in the sub-prime real-estate market but soon spread to all facets of credit. In response to the Great Recession, the regulatory pendulum to some extent has swung back toward greater structural separation and regulation as happened in the 1930's in response to the Great Depression. In 2010, Congress passed and President Obama signed into law the Dodd–Frank Wall Street Reform and Consumer Protection Act. This course will examine the changes Dodd- Frank has made in the way we regulate financial institutions. Lastly, we will focus a portion of each class on what is happening currently in the financial industry.
Textbooks and Other Materials
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The textbook information on this page was provided by the instructor. Students should use this information when considering purchases from the AU Campus Store or other vendors. Students may check here to determine if books are currently available for purchase at the AU Campus Store. Carnell, Macey, and Miller, The Law of Banking and Financial Institutions (Fifth Ed. 2013); Sheila Bair, Bull by the Horns (2012); Niall Ferguson, The Ascent of Money: A Financial History of the World (2008); Michael Lewis, The Big Short--Inside the Doomsday Machine (2010)
First Class Readings
Class One: The Ascent of Money, pp. 1-118; The Law of Banking and Financial Institutions, Chapter 1. Class Two: The Big Short; Bull by the Horns, pp. 1-121; The Law of Banking and Financial Institutons, Chapter 2.
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