304.01 Big Bank Regulation

Banking has evolved rapidly in just a few years. Global trade and investment have been supported and promoted by an emerging global financial system. This has in turn encouraged the growth of giant universal banks, based in the United States, the United Kingdom, mainland Europe, China and Japan. Most modern banks of any significant size (greater than $100 billion in total assets) have transnational and often truly global operations, but they also create major new risks and regulatory challenges. The debate over big banks and "too big to fail" concerns continued to be an important public policy concern in the 2016 Presidential election campaign and is certain to be so for the 2020 election. Since the Global Financial Crisis of 2008, the largest in a long run of domestic and international crises since the Great Depression of the 1930s, a new Dodd-Frank framework has been emerging. This framework has fundamentally changed the way in which such financial institutions are regulated. After more than a decade of reform, however, the framework remains fundamentally controversial, at least in the United States, and executive and congressional efforts to reverse the Dodd-Frank and Basel models are currently on the main national political agenda. This controversy has now become more complicated and has escalated in light of actions taken by the Treasury Department and the Fed to address financial and economic difficulties inflicted by COVID-19. Climate change is also starting to have a deep impact on financial markets, and this in turn is shaping some of the actions of regulators and banks. The walls between the three main sectors of finance - banking, securities and insurance - have broken down, yet at their core banks continue to be somewhat unique in their functions and the challenges they present for financial stability.

This course will review all the domestic and international regulatory developments since the Global Financial Crisis, focusing on the established and emerging regulatory architectures and systems, both domestic and international, currently proposed reforms, and future challenges and prospects for global and domestic financial reform. Conducted all online, the course will also involve substantial class interaction in addition to lectures. On a number of occasions students will take turns in presenting issues to “congressional committees,” also consisting of students, and Professors Baxter, Strauss and Reiners will be actively involved in these “hearings.”

 

Fall 2020

Course NumberCourse CreditsEvaluation MethodInstructorMeeting Day/TimesRoom
304.01
Final Exam
Lawrence G. Baxter, Emily N. Strauss, Lee Reiners
MWTh
11:00 AM-12:15 PM
Sakai site: https://sakai.duke.edu/portal/site/LAW.304.01.F20
Email list: LAW.304.01.F20@sakai.duke.edu
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