This course examines important current issues in the regulation of the U.S. capital markets and the financial system, with emphasis on the global financial crisis, reform efforts since then, and potential future actions in light of the COVID-19 crisis. Specific topics will likely include: mechanisms for controlling risk in financial institutions, particularly capital and liquidity requirements; the unique problem of systemic risk; environmental, social, and governance (ESG) issues; dealing with illiquid and insolvent institutions, including resolution authority; optimal regulatory structure and use of cost-benefit analysis; market microstructure for securities trading; regulation of derivatives trading; consumer protection; Money Markets Funds, Exchange Traded Funds and the Shadow Banking System; Federal Reserve measures during the COVID-19 crisis; and recent trends in FinTech and digital currencies. Classes will be primarily based on lectures and interactive discussion, and will also include regular guest speakers. Required written work will be a final take-home examination, with a week between distribution and due date.
This course was previously offered jointly by the Kennedy School and Law School. It may be of particular interest to students at the Kennedy School, Law School and Business School.