Entire Postgraduate Module for International Investment Law, provides an introduction to Investment Law on a global scale for furthering research, for commercial, law graduates, or aspiring investors alike.
When is regulation useful?
Financial regulation is justified on consequentialist grounds
Benefit cost-analysis
o Provides rational process for intervention
o And for setting priorities
Also, in principle for handling clashes -
Conflicting regulatory goals
Portfolio regulation of collective investment vehicles
o Protects investors in individual firm
o But may increase correlation of investment behaviour across system,
implications for market efficiency, systemic stability?
Fostering competition in financial services
o May increase propensity to risk-taking by banks and problems of contracting
failure for investors?
For example, splitting up of the financial services authority in the UK
Financial conduct authority; concerned with consumer protection (low rates of
lending)
Prudential regulation authority; focuses on financial stability (high rates)
Could lead to institutional frictions:
o How will they share information?
Boundary issues
There is danger that in a heavily regulated banking sector, activity will shift and be
conducted in less regulated parts of the financial system (shadow banking)
“Shadow banking ads usually defined, comprises a diverse set of institutions and markets
thast collectively carry out traditional banking functions but do so outside, or in ways only
loosely linked to the traditional system of regulated depository institutions – Ben Barnanke
2012 – an example is cryptocurrency.
Iceland owned homage to many banks due to it’s lack of financial regulation, therefore led
to the effects when banks went bust – increased living costs.
Arbitrage
Bank capital requirements
Securitization removed debt from bank balance sheets
Capital requirements applied less stringently to collective investment vehicles
In some cases, internal transfer from banking book to trading book
Credit ratings of securitizations
Credit ratings are less granular than underlying data
High concentration of ratings forecasts just above threshold for next lowest class
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller lochridge. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £5.49. You're not tied to anything after your purchase.
