1. U.S. Financial Regulations

2. COURSE OVERVIEW
1) INTRODUCTION
2) FINANCIAL INSTITUTIONS & SERVICES
3) LEGAL SOURCES & DEVELOPMENTS
4) BANKING, SECURITIES, INSURANCE
5) FINANCIAL CRISIS & REFORMS
6) INTERNATIONAL FINANCIAL SYSTEMS
7) CLASS PRESENTATIONS

3. INTRODUCTION

4. REGULATORY SYSTEM BANKING SECURITIES INSURANCE
safety and soundness of banks
market integrity, investor protection
ability of insurance firms to meet their commitments to the insured
federal (Fed, OCC)
and state regulators
federal (SEC)
state regulators

5. BANKING DEPARTMENT OF THE TREASURY
OFFICE OF THE COMPTROLLER OF THE CURRENCY (OCC)
1863 National Currency Act
1865 National Banking Act
charter and examine national banks
dual banking system (state vs. national banks)
OFFICE OF THE THRIFT SUPERVISION (OTS)
regulate formation and management of thrifts (federally-chartered savings and loan associations; manage large savings deposits and issue mortgages)
government revenues
US currency

6. BANKING FEDERAL RESERVE SYSTEM (FED) 1913 Federal Reserve Act
central bank and lender of last resort
monetary policy and payment system
monitor holding companies (incl. banks)
promote stable prices and economic growth
Board of Governors
12 regional reserve banks

7. BANKING FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC)
1933 Banking Act (“Glass-Steagall Act”)
commercial banking (taking deposits, making loans)
investment banking (underwriting and dealing in securities)
deposit insurance for commercial banks
funded with insurance premiums paid by participating banks
moral hazard problem despite market discipline and banking supervision
minimum capital requirements
disclosure and transparency
Basel I + II

8. BANKING 1933 Banking Act (“Glass-Steagall Act”)
commercial vs. investment banking
1956 Bank Holding Company Act
limit commercial banks
1999 Financial Services Modernization Act (“Gramm-Leach-Bliley Act”)
revoke Glass-Steagall Act / Bank Holding Act
permit financial holding companies (FHC) combining
commercial banks (Fed, OCC)
investment banks (SEC)
insurance companies (state regulators)

9. SECURITIES NEW YORK STOCK EXCHANGE (NYSE) 1929 stock market crash
1933 Securities Act (primary market)
1934 Securities Exchange Act (secondary market)
SECURITIES AND EXCHANGE COMMISSION (SEC)
1934 Securities Exchange Act
independent government agency
primary regulator of securities markets
regulatory authority over securities firms (“broker-dealers”)
NATIONAL ASSOCIATION OF SECURITIES DEALERS (NASD)
SECURITIES INVESTOR PROTECTION CORPORATION (SIPC)

10. FINANCIAL CRISIS AND REFORM
Many countries (e.g. UK) have consolidated their financial regulatory structure, but the US has chosen to maintain its structure.
Financial Services Regulators communicate across financial sectors, but do not effectively identify cross-cutting risks, fraud and abuse.
Need to monitor risks across
markets
industries
national borders

11. INTERNATIONAL SYSTEMS
global standards and harmonization
IMF
WORLD BANK
BRETTON WOODS
BASEL ACCORDS
EUROPEAN UNION FINACIAL SERVICES PLAN