Module description
AVAILABLE TO LAW & NON-LAW STUDENTS.
Austerity, rising interest rates and inflation are dominating the 24h news cycle. These issues are intrinsically linked to the functioning of the financial system. It is important to equip our students with a critical awareness of the functioning of the financial system as a whole.
The module is interdisciplinary in nature, based on law, economics, and finance. It will focus on the institutional set up and functioning of the financial system as a whole.
The first part of the module will look at financial institutions, including central banks, commercial banks, broker-dealers, money market funds, and hedge funds, as well as financial markets and their infrastructures. We will analyse the underlying business models as well as the legal and regulatory environment in which these institutions and markets operate.
The second part will focus on financial products, with a particular emphasis on money and money-like financial instruments. This will include the basics of finance theory, monetary theory, the money creation process, but also derivatives and repurchase transaction and the role they play in the modern economy.
Assessment details
Written Examination (100%)
Educational aims & objectives
This module aims to introduce students to the principles of finance theory, and its practical application in the context of debt finance and secured lending. The focus is on modern lending techniques (term loans, lines of credit, syndicated loans) and debt securities (bonds, notes, hybrid instruments) as well as the mechanisms for securing repayment (security interests, quasi-security and guarantees).
Learning outcomes
Knowledge and Understanding
The module will provide students with a detailed understanding of the substantive elements of the principles of finance, credit and security law and the policy considerations underlying this field.
Students will also acquire a detailed knowledge of the interplay of several different sources of law in this field, notably statute and case law; and understand how to assess the wider policy implications as they affect other areas of corporate and commercial law.
Cognitive and Intellectual Skills
Students taking this module will develop the skills to critically engage a complex and dynamic area of law. Through discussion of legislation and case-law they will learn of the difficulties of doctrinal legal analysis in such a context and the range of questions posed for lawyers.
These problems will be discussed through policy clashes, jurisdictional clashes and substantive legal clashes. Students will learn to address these questions by synthesising materials from different academic disciplines and then applying their analysis to on-going policy debates.
Key/Transferable Skills
In class discussion based on readings and presentations will be key parts of the module. The former will help students develop oral communication skills while the latter will require them to learn how to work as part of a group of researchers. The module will draw on a range of resources (literature, electronic and print media, and audio-visual materials) and students will learn to critically evaluate with these resources. Each seminar will end with a reflection on where that week’s materials fit with the overall objectives of the course and students will be encouraged to reflect on their learning each week.
Teaching pattern
Semester 2 (contact hours 32): seminar (1 x 2 hour per week); tutorial (1 x 1 hour per week)
Suggested reading list
- W Klein, J Coffee and F Partnoy, Business Organization and Finance – Legal and Economic Principles (Foundation Press, 11th edn 2010).
- L Gullifer and J Payne, Corporate Finance Law: Principles and Policy (Hart, 2nd edn 2015).
- I Welch, Corporate Finance (4th edn 2017); this is a textbook on finance for MBA students; it explains some of the underlying mathematical concepts. You can read the book (or rather selected chapters) online at http://book.ivowelch.info/read/
- E Ferran and L Chan Ho, Principles of Corporate Finance Law (OUP, 2nd edn 2014).
- P Wood, Law and Practice of International Finance (Sweet & Maxwell, 2008) (extracts will be made available on KEATS).
- L Gullifer, Goode on Legal Problems of Credit and Security (Sweet & Maxwell, 5th edn 2014).
- H Beale et al. The Law of Security and Title Based Financing (OUP, 2nd edn 2012).