MPF_RDFT Regulation and Supervision of Financial Markets

Faculty of Economics and Administration
Spring 2023
Extent and Intensity
0/2/0. 4 credit(s). Type of Completion: zk (examination).
Teacher(s)
Mgr. Ing. Filip Hampl, Ph.D., LL.M. (seminar tutor)
prof. Ing. Eva Horvátová, CSc. (seminar tutor)
Guaranteed by
Mgr. Ing. Filip Hampl, Ph.D., LL.M.
Department of Finance – Faculty of Economics and Administration
Contact Person: Iva Havlíčková
Supplier department: Department of Finance – Faculty of Economics and Administration
Timetable of Seminar Groups
MPF_RDFT/01: Thu 12:00–13:50 VT105, except Thu 30. 3., F. Hampl
Prerequisites
The course assumes basic knowledge and skills in the areas of:
- central and commercial banking,
- financial markets and the activities of financial institutions,
- theory of law (systematics of law, the distinction between private and public law) and legal regulation of direct protection of persons in a weaker position on financial markets in the scope of the course Legal Investor Protection,
- work with legal information.
Course Enrolment Limitations
The course is also offered to the students of the fields other than those the course is directly associated with.
fields of study / plans the course is directly associated with
Course objectives
The aim of the course is to acquaint students with the reasons (the „why“), bodies (the „who“), and tools (the „how“) of financial markets supervision and aspects of their legal regulation. The course is designed as a combination of theoretical and practical seminars and as such it serves as a comprehensive excursion into the issues of financial regulation, not only in the Czech Republic, the European Union but also in the international context. The course uses historical events in financial markets as a starting point to explore the challenges of regulating financial markets, emphasizing risks to financial systems. It focuses on regulatory tools from two perspectives: (i) public law aspects of financial market supervision as a whole, including current topics such as high frequency trading, virtual assets or FinTech; and (ii) financial stability and the role of macroprudential policy. The course also pays attention to the institutional and functional aspects of the supervisory and regulatory bodies.
Learning outcomes
After completing the course, students will be able:
- To formulate reasons, goals, and methods of supervision and regulation of financial markets.
- To understand the legal aspects of supervision and regulation of financial markets and to formulate their quantitative impacts on financial institutions as well as on financial systems.
- To apply the knowledge gained in the field of macroprudential policy in assessing the stability of individual financial systems.
- To orientate in the system of supervisory and regulatory bodies in the Czech Republic, but also in the European Union and internationally.
- To formulate the impact of new trends on the area of regulation and supervision of the financial markets.
Syllabus
  • 1. The financial system and its disadvantages as reasons for financial regulation and supervision. Objectives of financial regulation and supervision as a set of means to remedy market failures. Limits to financial regulation and supervision as a way of understanding the practical constraints to which it is subject.
  • 2. Risks for the financial system. Systematic risk and its dimensions. A quick guide to Refinitiv. Case study.
  • 3. Policies, legal basis and regulatory and supervisory bodies. Models of supervisory arrangements (sectoral, functional and unified supervisory model). Supervisory authorities (European System of Financial Supervision - ESRB, EBA, ESMA, EIOPA; Czech National Bank).
  • 4. Macroprudential and microprudential supervision of banks I – maintenance of financial stability. Functions of banks and their vulnerability as a reason for regulation. BCBS and a historical excursion into Basel standards. Capital regulation under Basel III (Pillar 1). Basel III and its Pillar II and Pillar III.
  • 5. Macro-prudential and micro-prudential supervision of banks II - Basel III and liquidity requirements (LCR and NSFR). Borrower-based limits LTV, D(S)TI, LTI. Case studies focused on capital adequacy.
  • 6. Macroprudential and microprudential supervision of banks III - Case studies focused on capital adequacy and borrower-based limits LTV, D(S)TI, LTI.
  • 7. Macroprudential and microprudential supervision of capital market I - overview of obligations imposed on investment firms according to MAR and MiFID, prudential and other requirements imposed on investment firms in the IFR/IFD regime.
  • 8. Macroprudential and microprudential supervision of the capital market II - case studies focused on prudential and other requirements imposed on investment firms in the IFR/IFD regime.
  • 9. Macroprudential and microprudential supervision on the capital market III – market abuse according to MAR, case studies.
  • 10. Macroprudential and microprudential supervision on the capital market IV - regulation of information asymmetry, prospectus regulation and credit rating agencies, case studies.
  • 11. Discussion on specific fields and new challenges of financial market regulation and supervision – e.g. banking union, virtual assets, FinTech or P2P lending.
  • 12. Lecture and discussion with a financial professional.
  • Students of the course Regulation and Supervision of the Financial Markets shall use the web portal pravoesf.econ.muni.cz. They should also pay attention to the study texts in the course Legal Investor Protection, which lists the basic legal institutes, the knowledge of which is assumed to be understood by the participants of the course Regulation and Supervision of the Financial Markets. The course employs the legal information systems ASPI and Refinitiv. Students can access the ASPI in all computer classrooms in the ESF building and also via a remote desktop within the Orion terminal server (connection instructions are available on the econ.muni.cz website). Access to the Refinitiv is possible in the ESF building.
Literature
    required literature
  • ARMOUR, John, Daniel AWREY, P. L. DAVIES, Luca ENRIQUES, Jeffrey N. GORDON, C. P. MAYER and Jennifer PAYNE. Principles of financial regulation. First edition. Oxford: Oxford University Press, 2016, xxvii, 669. ISBN 9780198786481. info
  • ALEXANDER, Kern. Principles of banking regulation. First edition. Cambridge: Cambridge University Press, 2019, xxii, 473. ISBN 9781108427265. info
    recommended literature
  • KABELÍK, Karel. Banking regulation : trends & impacts. First edition. Prague: Czech Banking Association, 2014, 219 stran. ISBN 9788026073345. info
  • ZRŮST, Lukáš. Selhání subjektů finančního trhu. Vydání první. Praha: Wolters Kluwer, 2019, xiv, 228. ISBN 9788075985118. info
  • BLAHOVÁ, Naďa. Rizika bank a jejich regulace. 1. vydání. Jesenice: Ekopress, 2018, 283 stran. ISBN 9788087865477. info
Teaching methods
Seminars, discussions, case studies, self-study of assigned literature.
Assessment methods
The course is completed by a written exam. To successfully pass the written exam, it is necessary to obtain at least 60% of the points. The condition for admission to the exam is participation in seminars (max. 2 unexcused absences). In addition, students can obtain bonus points for active participation in seminars during the semester. The number of bonus points available for the students will be determined at the beginning of the semester. The bonus points will be added to the overall evaluation of the course if the written exam would be successfully passed (i.e if students obtained at least 60% of the points).
The following classification scales apply to student evaluation: A: 93 - 100%, B: 92 - 85%, C: 84 - 77%, D: 76 - 69%, E: 68 - 61%, F: less than 61%.
Note: “Any copying, recording or leaking tests, use of unauthorized tools, aids and communication devices, or other disruptions of objectivity of exams (credit tests) will be considered non-compliance with the conditions for course completion as well as a severe violation of the study rules. Consequently, the teacher will finish the exam (credit test) by awarding a grade "F" in the Information System, and the Dean will initiate disciplinary proceedings that may result in study termination."
Language of instruction
Czech
Further comments (probably available only in Czech)
Study Materials
The course is taught annually.
Teacher's information
Other resources:

- Information sources of the Czech National Bank (https://www.cnb.cz/cs/)

- Information sources of the European Central Bank (https://www.ecb.europa.eu/)

- Information sources of the European financial supervisory authorities: European Securities and Markets Authority (ESMA, https://www.esma.europa.eu/), European Banking Authority (EBA, https: //www.eba. europa.eu/), the European Insurance and Occupational Pensions Authority (EIOPA, https://www.eiopa.europa.eu/), and the European Systemic Risk Board (ESRB, https: //www.esrb.europa. eu /).

The course is also listed under the following terms Autumn 2009, Autumn 2010, Autumn 2011, Autumn 2012, Autumn 2013, Autumn 2014, Autumn 2015, Autumn 2016, Autumn 2017, Autumn 2018, Autumn 2019, Autumn 2020, Spring 2022, Spring 2024, Spring 2025.
  • Enrolment Statistics (Spring 2023, recent)
  • Permalink: https://is.muni.cz/course/econ/spring2023/MPF_RDFT