OVERVIEW

This course deals with the fundamentals of the European regulation of financial markets. Through a selection of topics in the areas of banking, capital markets, and insurance law, it explores the main building blocks of European financial law and explain students the rationale behind rules. For instance, the course explores the regulation of banks’ capital requirements and governance, the functioning of stock exchanges and initial public offerings (IPOs), the role of takeovers, the prohibition of insider trading and market manipulation, and it addresses the way EU law protects investors and holders of insurance products.

AIMS AND CONTENT

LEARNING OUTCOMES

This course deals with the fundamentals of the European banking, financial markets and insurance regulation. At the end of the course, student will have knowledge of the most important building blocks of the current EU regime on investor and insured protection, financial markets integrity and efficiency, as well as banks’ resilience. Students will be able to understand these building blocks in the light of the market failures they address and on the basis of the general principles of EU market integration.

AIMS AND LEARNING OUTCOMES

This course deals with the fundamentals of the European regulation of financial markets. Through a selection of topics in the areas of banking, capital markets, and insurance law, it explores the main building blocks of European financial law and explains to students the rationale behind the rules. For instance, the course explores the regulation of banks’ capital requirements and governance, the functioning of stock exchanges and initial public offerings (IPOs), the role of takeovers, the prohibition of insider trading and market manipulation, and it addresses the way EU law protects investors and holders of insurance products.

At the end of the course, students will be able to:

• Understand and analyse the main regulatory strategies behind banking, capital markets and insurance law, particularly from two perspectives: (i) the theory of market failures, and (ii) the legal strategies of market integration through EU law (e.g. maximum and minimum harmonization; home country control);
• Understand the rationale and the basic features of the Economic and Monetary Union (EMU);
• Understand, analyse and assess the efficiency and effectiveness of financial and insurance law provisions based on their ability to tackle market failures while minimising regulatory failures;
• Understand, analyse and evaluate the legal techniques that EU law adopts to ensure the stability and good governance of banks, hence improving depositor protection; 
• Understand and analyse the legal techniques EU law adopts to protect investors and holders of insurance products;
• Understand, analyse and evaluate the rules that regulate takeovers in the EU; 
• Understand and analyse the functioning of primary and secondary markets, including regulated markets (stock exchanges) and other trading venues, as well as the rationale behind the prohibition of market abuse. 
• Communicate effectively in oral form, adapt their communication strategy to the context, and properly use sources and visual supports.

PREREQUISITES

General knowledge of Business Law I will facilitate the attendance. Previous knowledge of EU law is not a prerequisite, but will facilitate attendance.

TEACHING METHODS

The course is provided in English through lectures and seminars, both taking place on a weekly basis. During lectures, the teacher explains the fundamental rules of financial law and their rationale. During seminars, the teacher and the students will discuss CJEU decisions and other relevant materials, based on a presentation by a student (depending on the number of attending students, presentations may be carried out in groups). Each attending student will perform one presentation throughout the course, this being the first requirement to get the corresponding extra grades (see below). Presentations are also required to obtain the corresponding Open Badge, as they are key in the developing soft skills such as public speaking and the use of visual supports (PowerPoint presentations). All students must also attend and actively participate in the discussion on all the decisions and materials, this being the second and last requirement to obtain the corresponding Open Badge. In-class interactions will take place in a friendly environment where everyone should feel free to express views and doubts with no risk – the only mistake students can make is not to participate! To facilitate the discussion, all the students must read in advance the decisions and the materials that will be part of the weekly seminars.

SYLLABUS/CONTENT

The course will address the following topics (each topic can be the subject of lectures, seminars, or both): 

1. Why regulate finance? An introduction to market failures
2. Integrating the European market for financial services: freedom of establishment and free provision of financial services
3. Tackling asymmetric information in capital markets:
   1. The prospectus regime
   2. Credit Rating Agencies
   3. Auditors
4. Agency problems in the protection of clients 
   1. Investment services
   2. Insurance distribution
5. Agency problems in capital markets
   1. Shareholder rights
   2. Takeover bids
6. Agency problems in banks: the governance of banks
   1. Ownership
   2. Board composition
   3. Directors’ remuneration
7. Positive externalities, market power and price regulation: the case of regulated markets (stock exchanges)
8. Insights from behavioural economics: short selling bans and product intervention
9. The Economic and Monetary Union (EMU):
   1. The reasons underlying the EMU
   2. The boundaries between economic and monetary policies
10. Negative externalities and banks’ capital requirements:
    1. Why are banks so difficult to regulate?
    2. The EU regulation of banks’ capital 

RECOMMENDED READING/BIBLIOGRAPHY

For both attending and non-attending students, the course handbook is:

• Matteo Gargantini and Michele Siri, Cases and Materials on EU Financial Law (2023), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4430130

For non-attending students, the reading materials also include the following:

• Matteo Gargantini and Michele Siri, Stock and Derivatives Exchanges in the European Union (2021), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4317068
• Filippo Annunziata, The Remains of the Day: EU Financial Agencies, Soft Law and the Relics of Meroni (2021), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3966980

Students qualify as “attending” when they attend in person at least 14 out of 18 lectures and seminars. Attendance is recorded at the beginning of each lecture. Therefore, punctuality is recommended.

TEACHERS AND EXAM BOARD

Exam Board

MATTEO GARGANTINI (President)

IUNIO GIRAUDO

DILETTA LENZI (President Substitute)

MICHELE SIRI (President Substitute)

ILARIA CERIANA (Substitute)

ALESSIA MISTRETTA (Substitute)

ANNA MOLINARI (Substitute)

FRANCESCA PALAZZINI (Substitute)

LESSONS

LESSONS START

Lectures and seminars are held only in the first semester.

Class schedule

EUROPEAN UNION FINANCIAL AND INSURANCE MARKETS REGULATION

EXAMS

EXAM DESCRIPTION

The assessment of the students’ preparation will take place through an oral exam, based on the reading materials specified above and according to the following rules for attending and non-attending students. 

A) The exams for the attending students will be structured as follows: 

1) the first part of the exam will focus on the same reading materials each student has presented during the course (1 or 2 questions)

2) the second part of the exam (1 or 2 questions) will focus on the theoretical parts (i.e., Part I) of the eight chapters of the course manual.

Students that (i) qualify as “attending” and, simultaneously, (ii) have presented at least once during the seminars will have a credit of 1 to 4 extra grades (depending on the quality of the presentation and of their overall participation in the activities of the class).

B) For non-attending students, the exams will be structured as follows:

1) the first part of the exam (1 or 2 questions) will focus on the theoretical parts (i.e., Part I) of the eight chapters of the course manual and on:

-       Filippo Annunziata, The Remains of the Day: EU Financial Agencies, Soft Law and the Relics of Meroni (2021), 

-       Matteo Gargantini and Michele Siri, Stock and Derivatives Exchanges in the European Union (2021)

2) the second part of the exams (1 or 2 questions) will be on the Reading Materials (Part II.B) of the eight chapters of the course manual. This is the part that, in each chapter, provides a selection of the relevant legal provisions. In this case, students shall carefully read the provisions and focus on their rationale. They do not need to learn the provisions by heart or to recollect the articles’ numbers. During the exams, they may be asked to comment on one or more provisions.

Students who have valid certification of disability or Specific Learning Desorders (DSA) on file with the University may request the use of compensatory measures during the exams (e.g. additional time, concept maps, modifications in the written/oral mode), following the guidelines (p. 5) published here. In any case, for further information, please contact the Department’s disability liaison: Isa.Fanlo@unige.it.

ASSESSMENT METHODS

The oral exams consist of three questions, each on a different part of the programme. Questions may be either theoretical, to test the students’ understanding of the rationale and the functioning of financial law, or practical, based on real or hypothetical cases that will allow students to analyse financial law principles and provisions and to evaluate them against specific circumstances. 

The in-class presentation of the reading materials will be graded according to the following criteria: (i) clarity (language, legibility and formatting of slides, persuasiveness of argumentation); (ii) Structure (logical order of the matters addressed); (iii) Substance (quality and originality of the approach, strength of the analysis and the argumentation); (iv) Research (depth of the literature considered, use of sources).

FURTHER INFORMATION

Further information will be provided via the AulaWeb page.