Module description
It is indisputable that banks play a pivotal role in the economy. Almost every adult in the UK has at least one bank current account. In 2019, 40 billion payments were made in the UK and in 2017, for the first time, debit cards overtook cash as the most frequently used payment method in the UK.
This module covers the key legal issues and regulatory frameworks surrounding the bank-customer relationship and payment systems in the UK. This area of law is both practical and dynamic and presents a wide range of legal challenges to banks and their customers. It is practical as payment systems underpin almost every aspect of our modern life: they let us pay a deposit on a house, withdraw money from a cash machine, receive a salary in the bank account, pay direct debit and transfer money via our smartphone. It is dynamic as the law in this area must adapt to new technology, changing banking practices and new regulatory frameworks.
The areas covered in this module include: What do banks do? Can we define a bank and who is a customer?; The contract between a bank and its customer; Scope, application and limitations of the duties and liabilities of banks, including, the duty to obey the customer’s mandate, duty of confidentiality, duty of care, fiduciary obligations and undue influence; Termination of the bank-customer contract and dispute resolution; Current account and special types of accounts; The legal framework of payment cards, the legal nature of an electronic fund transfer and bank as a depository and lender. The module will conclude with two fascinating areas of anti-money laundering and individual accountability of senior managers in banks.
Alongside traditional and long-established legal issues of bank-customer relationship, the module has a special focus on legal challenges posed by the evolving nature of banking practices and payment instruments. It will accordingly explore questions, such as - What is Open Banking? What is Open Finance? How does GDPR affect us as bank customers? What is the impact of the Payment Services Regulations on payment services and the way in which customer account information is handled? Can banks disclose our data to credit reference agencies? What is the role of SMEs in our economy and why lending to SMEs is largely unregulated?
The knowledge built throughout the module will allow the students not only to solve practical legal problems but also position these problems within a wider conceptual context of banking regulation such as, the key role banks play in supporting businesses and driving economic growth; their active role in monitoring money laundering, the importance of ensuring competition and financial stability in the banking sector and the need to preserve the confidentiality of customers’ information.
Assessment details
Examination (100%)
Teaching pattern
Lectures (1 x 2 hour per week) Tutorial (1 x 1 hour per week) Contact hours 30
Suggested reading list
- 3rd edition of Cranston, Principles of Banking Law (2018).
- Iris Chiu and Joanna Wilson, Banking Law and Regulation (OUP, 2019); this will be available to you online on MyReadingList.
All other reading materials are available online on MyReadingList.