Course Law and Finance of Banking - Law 611G
Instructor Simone M. Sepe
Units 3 (Graded)

No prerequisites, but it is strongly recommended that students have taken Business Organizations (or be taking it while enrolled in this course).

Recommended Courses:  

Students who want to understand the U.S. economy and its financial institutions, including the past financial crisis, will benefit from this course. 


In July 2010, Congress passed the Dodd-Frank Act, one of the most significant and comprehensive pieces of financial regulation in the history of the United States.  This course will explain how and why we have arrived at this point, and will do so from historical, economic, and legal perspectives.


The class will begin with an historical overview of banking and will provide overview of the most important financial institutions, mainly commercial banks and investments banks, offering an interdisciplinary perspective of financial regulation.


The course will then introduce the basics of corporate finance to introduce the students to the economics of financial institutions such as commercial banks, investment banks, and insurance companies, explaining the market failures associated with such industries.  This course will also examine why we need financial institutions and why they collapse.  We will discuss the recent examples of financial failures and bailouts. 


Classical topics such as entry into the business of banking; the Dual Banking System; corporate governance of banks, activities restrictions and limitations on investments; the regulation of deposit taking; and safety and soundness regulation will be covered. Emphasis will be given to prudential regulation of financial institutions. Regulatory “arbitrage” and “shadow banking” will be analytically treated.



A generic reference for this course, and required for the course, is Carnell, Macey & Miller, The Law of Financial Institutions (5th ed. 2013). Other materials (articles, regulations, and lecture notes) will be distributed during the course.

Course Format

The course will be in the form of lecture-discussion. Students will be required to present articles or other materials chosen by the teacher.  The class will meet in two hour and half segments during the beginning of the semester; at the end of the semester additional sessions (up to a maximum of two) may be scheduled to allow for student presentations.

Written Assignments

Students may be required to write brief comments on articles presented in class.

Type of Exam
Essay Questions. A 24-hour take-home exam will be given on a specified date.

Basis for grading

Class participation will be seriously taken into account (20%). The teacher will have discretion to readjust grades on the basis of class participation.

Additional Comments

Useful websites:  Federal Reserve System:
Treasury Department:; and Bank for International Settlements:

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