This module advances the student's understanding of financial market failure and regulation, with particular reference to the British financial system. It introduces modern theories of asymmetric information and applies them to financial institutions, relating the analysis to current developments.
Module learning outcomes
On completing the module a student will be able to:
Appreciate the nature of asymmetric information and its implications
Understand the reasons for financial market failure and regulation
Argue the case for and against industrial self-regulation
Apply theories of agency capture and moral hazard to the regulator
Have a broad institutional knowledge of the UK and US financial systems and the main differences between these and continental financial systems
Assessment
Task
Length
% of module mark
Online Exam - 24 hrs (Centrally scheduled) The Structure & Regulation of Financial Markets
8 hours
100
Special assessment rules
None
Reassessment
Task
Length
% of module mark
Online Exam - 24 hrs (Centrally scheduled) The Structure & Regulation of Financial Markets
8 hours
100
Module feedback
Information currently unavailable
Indicative reading
The basic text for the module is:
Spencer, P D. (2000). The Structure and Regulation of Financial Markets. Oxford University Press.
Required reading: A good introduction to this material is provided by:
Mishkin, F S. (2002). The Economics of Money, Banking and Financial Markets. 6th ed. New York: Addison-Wesley. Chapter 8 provides a useful introduction to the theory of asymmetric information and the way it can be applied to financial institutions. Chapters 10-12 provide a useful description of the US system, including the 1999 Financial Services Modernisation Act.
Pagano, M. & Roell, A. (1992). Failure of Financial Markets in Newman, Milgate and Eatwell (eds) The New Palgrave: Dictionary of Money and Finance. Macmillan.
Davis, E P. (1993) Theories of Intermediation, Financial Innovation and Regulation. National Westminster Bank Review. May, 41.