Regulation and Supervision FIMA
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 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, derivatives transactions, 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.
Teacher(s)
Syllabus
1. Lecture:
- Historical events in the financial markets, their effects on financial stability, risks for the financial system as the material reasons for regulation and supervision of the financial market. The meaning of the term financial stability. (the „why").
- Fundamentals of financial markets. Discussion on the reasons for regulation and supervision of the financial market, the quantitative aspects of risks for financial systems. Brush up on Bloomberg Terminal.
- Macroprudential and microprudential policy – its concept, systematics, and focus. Legal grounding of the regulation and supervision of financial markets, the system, and overview of the legislation. The importance of the European Union's law for the implementation of national supervision.
- Functional and institutional concept of supervision in the Czech Republic and the European Union. European System of Financial Supervision (ESFS) - ESRB (macroprudential supervision) and EBA, ESMA, EIOPA (microprudential supervision). International bodies for the financial market supervision. Possible models and the institutional approaches to supervision. (the "who")
2. Lecture:
- Macroprudential supervision - care for financial stability. Capital adequacy requirements (especially Basel III). (the „how“ I)
- Risks to financial markets addressed by macroprudential and microprudential policy. Mandates of supervisory authorities. Macroprudential supervision I: solving the case studies focused on capital adequacy.
- Macroprudential supervision II: solving the case studies focused on capital adequacy and mortgage loans.
3. Lecture:
- Microprudential supervision - obligations imposed on financial institutions, in particular by MiFID II, AMLD V and MIFIR, MAR, EMIR. (the „how“ II)
- Microprudential supervision: solving the case studies focused on the indirect investor protection within the framework of MiFID II, MiFIR, MAR, EMIR, and AMLD V.
- Specific areas and challenges of financial market regulation and supervision: shadow banking, virtual currencies, FinTech and P2P lending. (the „how“ III)
- Discussion on the specific areas and new challenges to the financial market regulation and supervision – eg. banking union, virtual assets, FinTech, P2P lending.
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 Law and Finance, 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 employes the legal information systems ASPI and Bloomberg Terminal. 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 Bloomberg Terminal is possible in the ESF building upon prior reservation.
