Banking and Financial Institutions: U.S. Regulation (LAW-857-001)
See Syllabus for first class assignments
Welcome to your course in Banking Law and Financial Institution Regulation. In this course we will study 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 historic happenstance. Some have called our banking system an “historical accident.” Other countries with different histories do not separate and regulate these industries as we do. To some extent, the separation reflects the ambivalent attitude that Americans have had from the beginning of the republic about large financial institutions. 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 necessary 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. In the 1980’s and 1990’s, however, this separation began to give way. Today, through the use of the holding company 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 took place beginning in late 2007 in the credit markets and led to what some have called the Great Recession. In 2010, the Dodd Frank Act was signed into law. Dodd Frank attempts to address the root causes of the crisis and to put in place reforms that would better enable the government to address a similar crisis in the future. We will study the principal components of Dodd Frank.
Textbooks and Other Materials
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Carnell, Macey, and Miller, The Law of Banking and Financial Institutions (Aspen Publishers 5th Ed. 2013) Carnell, Macey, and Miller, The Law of Banking and Financial Institutions: Statutory Supplement (Aspen Publishers 2013). Student Presentation Books (see below): Niall Ferguson, The Ascent of Money: A Financial History of the World (Penguin Press 2008) Michael Lewis, The Big Short: Inside the Doomsday Machine (2010, W.W. Norton) The Financial Crisis Inquiry Report: Final Report of the National Commission of the Causes of the Financial and Economic Crisis in the United States (Public Affairs, Perseus Books Group 2011) Benjamin Bernanke, The Federal Reserve and the Financial Crisis (Princeton University Press 2013)
First Class Readings
See Syllabus for first class readings
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