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2010/1 Module Catalogue
 Module Code: LAWM036 Module Title: BANKING REGULATION
Module Provider: School of Law Short Name: LAWM036
Level: M Module Co-ordinator: GOLDBY MA Dr (Schl of Law)
Number of credits: 30 Number of ECTS credits: 15
Module Availability

Autumn Semester

Assessment Pattern

Unit(s) of Assessment

Weighting Towards Module Mark (%)





Qualifying Condition(s)
Overall mark of 50%

Module Overview

This module will be aimed at giving students an insight into the workings of banks.  We will look at why and how the risks they take can and should be controlled, and we will examine the laws which regulate the risks taken by banks and financial institutions and the principles and policies underlying these laws.  The way in which banking markets function will be views in the light of globalisation and European integration and freedom of movement.  The module will also examine how the law attempts to halt and prevent potential abuses of the financial system by money laundered and financers of terrorism.



Module Aims



The module aims to provide students with an understanding of the issues surrounding risk-taking by banks as well as the standards that have developed with regard to their regulation and the prevention of their use for money laundering and terrorism financing. It will also provide students with an appreciation of the practical realities which have influenced and continue to influence the development of banking law.



Students will address such questions as:



·              What is the nature of traditional banking business?



·              What roles and functions have banks traditionally performed with respect to the availability and provision of credit?



·              How has banking business changed in recent years?



·              What is systemic risk and how does it affect banks?



·              What is regulation and why should banks be regulated?



·              Who should regulate banks and how should they be regulated?



·              What is the role of banks in the fight against money laundering and terrorism financing?






Learning Outcomes



At the end of the module, students should be able to:



1.              Demonstrate a conceptual understanding of the nature of banking business and the role banks perform in the economy;



2.              Demonstrate a critical awareness of banking risk and what operates to exacerbate and magnify it;



3.              Analyse critically the way in which banking business has developed in recent years and the impact this has had on the nature and spread of systemic risk;



4.              Demonstrate an in-depth understanding of the progress that has been made in the regulation of banks at the national, supranational and international levels.



5.              Discuss critically the ways in which and the reasons why banking regulation has not been successful in eliminating the risk of systemic failure;



6.              Assess the suitability and possible shortcomings of regulatory measures which have been taken in response to the recent banking crisis of 2007-2009;



7.              Demonstrate a critical awareness of the difficulties of harmonisation in this area of law;



8.              Discuss critically the role assigned to banks by the law in the fight against money laundering and terrorism financing;



9.              Apply acquired knowledge to respond to complex questions, demonstrating (i) self-direction and originality in responding to such questions, and (ii) a critical awareness of current issues and new insights in banking law;



10.          Deal with complex issues both systematically and creatively, make sound judgements in the absence of complete data and communicate conclusions clearly to specialist and non-specialist audiences;



11.          Demonstrate a conceptual understanding that enables the student to evaluate critically current research and advanced scholarship in banking law.





Module Content



·               Introduction to Banking, Risk and Regulation: The Financial Safety Net



·               International Banking Regulation: The Basel Committee on Banking Supervision



·               Core Principles for Banking Supervision and Capital Adequacy



·               The Financial Safety Net at EU Level 1: Prudential Supervision and CEBS



·               The Financial Safety Net at EU Level 2: Deposit Protection and Lender of Last Resort



·               The Financial Safety Net in the 1: Regulation and Deposit Protection



·               The Financial Safety Net in the 2: Crisis Management



·               Prevention of the Use of the Financial System for Money Laundering and Terrorism Financing









Methods of Teaching/Learning

One 3-hour seminar (weekly for 8 weeks.  Seminars will be supported by handouts, exercises and specimen questions.





The seminars will provide a forum where the essential principles of each topic and their practical significance can be discussed.  Students will be expected to come to these sessions having read a number of set materials in order that they may participate actively in the proceedings.  They may also be asked to contribute to seminars by presenting a set topic and raising the main issues surrounding it.  The handouts which the students will receive before the lecture will introduce students to cases and texts as well as list the materials to be read before each session.





The teaching and learning strategy is designed to stimulate private study using primary and secondary sources, both paper-based and electronic.  The aim of the strategy is to develop an understanding and critical awareness of the essential principles and underlying policies of banking law in the EU.





Selected Texts/Journals

International Regulation



Abrams, R. K. & Taylor, M. W. ‘Issues in the Unification of Financial Sector Supervision’, IMF Working Paper WP/00/213 (IMF, 2000)



Alexander, K. ‘The Need for Efficient International Financial Regulation and the Role of the Global Supervisor’ Journal of Money Laundering Control (5: 52-65, 2001)



Bollen, R. ‘The International Financial System and Future Global Regulation’ Journal of International Banking Law and Regulation (23: 458-473, 2008)



Ghosh, S. ‘Evolving International Supervisory Architecture: Design, Rationale and Policy Reform’ Journal of Banking Regulation (6: 246-260, 2005)



Goodhart, C. A. E. ‘The Organisational Structure of Banking Supervision’ FSI Occasional Papers No. 1 – November 2000-10-25 (Financial Stability Institute, Bank for International Settlements, 2000)



Peek, J., Rosengren, E. S. & Tootell, G. M. B. Is Bank Supervision Central to Central Banking? (1997)



Walker, G. A. International Banking Regulation: Law, Policy and Practice (Chapter 1) (Kluwer, 2001)





European Banking Regulation



Basel II and the Scope for Prompt Corrective Action in Europe ’, European Shadow Financial Regulatory Committee, Statement No. 25, 2006 Journal of Banking Regulation (8: 192-194, 2007)



Alford, D. ‘The Lamfalussy Process and EU Banking Regulation: Preliminary Assessment and Future Prospects’ Journal of International Banking Law and Regulation (21: 59-68, 2006)



Blair, C. E., Carns, F. & Kushmeider, R. M. ‚Instituting a Deposit Insurance System: Why? How?’ Journal of Banking Regulation (8: 4-19, 2006)



Cariboni, J., Branden, K. V., Campolongo, F. & de Cesare, M. ‘Deposit Protection in the EU: State of Play and Future Prospects’ Journal of Banking Regulation (9:82-101, 2008)



Chalmers et al European Union Law: Text and Materials  Chapter 18 (Cambridge University Press, 2006)



Garcia, G. G. H. & Nieto, M. J. ‘Banking Crisis Management in the European Union: Multiple Regulators and Resolution Authorities’ Journal of Banking Regulation (6: 206-226, 2005)



Gkoutzinis, A. A. Internet Banking and the Law in Europe: Regulation, Financial Integration and Electronic Commerce ( Cambridge University Press, 2005)



Horng, D. ‘The Principle of Mutual Recognition: The European Union’s Practice and Development’ World Competition (22: 135-155, 1999)



LaBrosse, J. R. & Walker, D. K. ’Contingency Planning: A Practitioner’s Guide Drawing From Lessons Learned from Dealing with Banks Failures’ Journal of Banking Regulation (8: 51-65, 2006)



Marttila, J. ‘The Main Challenge for CEBS: Convergence of Supervisory Practices across the European Union’ Journal of International Banking Law and Regulation (20: 341-344, 2005)



Mohamed, S. ‘A Single Regulator for the EC Financial Market’ Journal of International Banking Law (16: 203-212, 2001)



Nieto, M. J. & Wall, L. D. ‘Preconditions for a Successful Implementation of Supervisors’ Prompt Corrective Action: Is There a Case for a Banking Standard in the EU?’ Journal of International Banking Regulation (7: 191-220, 2006)



Roldan, J. M. ‘ Basel II – an Opportunity for Convergence in the EU’ Journal of Financial Regulation and Compliance (14: 24-28, 2006).  Available at



Walker, G. A. European Banking Law – Policy and Programme Construction (Sir Joseph Gold Memorial) (British Institute of International and Comparative Law, 2006)








Dempegiotis, S. I. ‘The Hard to Drive Tandem of Immunity and Liability of Supervisory Authorities: Legal Framework and Corresponding Legal Issues’ Journal of Banking Regulations (9: 131-149, 2008)



Gray, J. ‘Lessons from the BCCI Saga for the Current Accountability Debate Surrounding Northern Rock?’ Journal of International Banking Law and Regulation (23: 37-43, 2008)



Hart, A. ‘Paul Davidson and Ashley Tatham v. FSA (2006) – the Case and its Implications’ Journal of International Banking Law and Regulation (22: 288-292, 2007)



Hewetson, C. & Khan, A. ‘Hoodless Brennan: Implications of the Tribunal’s Decision’ Journal of International Banking Law and Regulation (19: 146-149, 2004)



Parish, P. ‘The Human Rights of Banks and Financial Institutions: An Analysis of the Impact of the Human Rights Act 1998 on UK Financial Regulations’ Journal of International Banking Law (15: 236-242, 2000)



Tison, M. ‘Do Not Attack the Watchdog!  Banking Supervisor’s Liability after Peter Paul’ Common Market Law Review (42: 639-675, 2005)





Anti Money Laundering



Brown, G. & Evans, T. ‘The Impact: The Breadth and Depth of the Anti-Money Laundering Provisions Requiring Reporting of Suspicious Activities’ Journal of International Banking Law and Regulation (274-277, 2008)



Ellinger, E. P. et al Modern Banking Law Chapter 4 (4th Edition, OUP, 2006)



Gill, M. & Taylor, G. ‘The Risk-based Approach to Tackling Money Laundering: Matching Risk to Products’ The Company Lawyer (24: 210-213, 2003)



Gill, M. & Taylor, G. ‘Preventing Money Laundering or Obstructing Business?  Financial Companies’ Perspectives on “Know Your Customer” Procedures’ British Journal of Criminology (44: 582-594, 2004)



Mitsilegas, V. Money Laundering Counter-Measures in the European Union (Kluwer Law International, 2003)



Ryder, N. ‘A False Sense of Security? An Analysis of Legislative Approaches Towards the Prevention of Terrorist Finance in the and the ’ Journal of Business Law (821-850, 2007)



Ryder, N. ‘The Financial Services Authority and Money Laundering: a Game of Cat and Mouse’ Cambridge Law Journal (67: 635-653, 2008)



Stott, C. & Ullah, Z. ‘Money Laundering Regulations 2007: Part 1’ Journal of International Banking Law and Regulation (23: 175-178, 2008)



Stott, C. & Ullah, Z. ‘Money Laundering Regulations 2007: Part 2’ Journal of International Banking Law and Regulation (23: 283-286, 2008)






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