S. International Banking and Finance: The Challenges

A global pandemic. Soaring sovereign debt. Huge budget deficits. Credit problems. Equity markets crashing and rebounding. Inflation. China’s financial crisis. Increased interest rates. Russian aggression against Ukraine. Energy and food crisis… and the collapse of the crypto sphere.

The world is in the middle of the deepest and wider crisis of its history.

In just three years, risks associated with financial services have exploded, provoking a massive dislocation of assets and liabilities across the private and public sectors and threatening financial stability in both advanced and emerging economies. Massive stimulus actions and quantitative easing by central banks are now rescinded (except in Japan). While financial risks are nothing new, understanding the way in which they have evolved is critical. 14 years after the Great Recession and global financial crisis, the risks taken by governments, central banks, banks, insurance companies, and capital markets have changed. What have we learned from these evolutions? How has the continuing COVID-19 crisis exacerbated risks to global financial markets risks? How effective has the new wave of regulations been in easing financial concerns related to the global lockdown? Who will foot the bill of these massive costs?

The regulatory efforts have not been robust enough to limit the damage, and in some cases, they have been at the origin of disruptions.

The classes

This course will explore
 the purposes of financial regulations;
 foundational principles of banking and insurance;
 central banks and other regulatory and supervisory authorities;
 sovereign debt and default risks;
 risk management and regulation;
 insurance and solvency;
 banking ratios and the uniform application of global financial regulations;
 climate change and challenges to financing the energy transition;
 shadow banking and securitization;
 the future of global capital markets;
 governance, culture, and conduct in the financial industry, including the impact of
financial markets on increasing inequality;
 the regulation of financial innovations such as electronic payment systems and cryptocurrencies;
 New developments in financial regulation.

Course sessions will include lectures, student presentations, and guest speakers. A paper will be requested by the end of the course on an agreed upon topic. LLM and JD papers on the course topics are accepted. The style of the class is very interactive. No previous economic or financial expertise is requested. In addressing these topics, the course seeks to improve students’ understanding of international banking and finance and provide them with the background necessary to discuss recent issues in financial regulation.