87582 - REGOLAZIONE DEI MERCATI FINANZIARI

Learning outcomes

By the end of the course, students must have knowledge of all the main rules that the financial markets and intermediaries sector must comply with, in various areas (capital, liquidity, market risk, client wealth management, etc.) to mitigate credit, liquidity, market, and operational risks. The course's primary objective is to assess the impacts on the financial sector and the broader economic system of the entire regulatory framework developed following the major financial crisis and technological advancements (payment directive, digital operational resilience regulation, cryptocurrency regulation), as well as new political priorities (Paris climate agreement).

Course contents

The course will be divided into ten lectures, which will include, when possible, a guest speaker from the industry and regulation authorities:

1. Regulation of bank capital: from Basel I to Basel III+; European directives and comparison with regulations in other jurisdictions (USA, UK)
2. Liquidity regulation: the new liquidity requirements introduced by Basel III
3. Bank crisis management: the Banking Recovery and Resolution Directive (BRRD)
4. Stress testing as a new supervisory tool
5. Regulation of financial markets: MiFID I, MiFID II, RIS
6. Revision of payment services rules: PSD2
7. Transparency on climate risks: CSRD, SFRD, climate risk taxonomy, new accounting standards
8. Climate risks: new exploratory stress tests
9. Digital finance: digital operational resilience regulation (DORA) and cryptocurrency regulation (MiCA)
10. Non-bank financial intermediaries (NBFI) and macroprudential regulation

Readings/Bibliography

• Basel Committee on Banking Supervision, Basel III - international regulatory framework for banks and banking systems, December 2010 (updated in June 2011)
• Basel Committee on Banking Supervision, Basel III: Finalising post-crisis reforms, December 2017
• EU Regulation No. 575/2013 on prudential requirements for credit institutions and investment firms (CRR) and subsequent amendments (CRR2: EU Regulation No. 876/2019 and CRR3: EU Regulation No. 1623/2024)
• EU Directive No. 36/2013 on access to the activity of credit institutions and prudential supervision of credit institutions and investment firms (CRD4) and subsequent amendments (CRD5: EU Directive No. 878/2019 and CRD6: EU Directive No. 1619/2024)
• Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act)
• Basel Committee on Banking Supervision, Basel III - international framework for liquidity risk measurement, standards, and monitoring, December 2010
• Basel Committee on Banking Supervision, Basel III - The Liquidity Coverage Ratio and liquidity risk monitoring tools, January 2013
• Basel Committee on Banking Supervision, Basel III: The Net Stable Funding Ratio, October 2014
• Financial Stability Board, Key Attributes of Effective Resolution Regimes for Financial Institutions, April 25, 2024
• Financial Stability Board, Principles on Loss-absorbing and Recapitalisation Capacity of G-SIBs in Resolution, Total Loss-absorbing Capacity (TLAC) Term Sheet, November 9, 2015
• EU Directive No. 59/2014 establishing a framework for the recovery and resolution of credit institutions and investment firms (BRRD, Bank Recovery and Resolution Directive)
• Single Resolution Board, Minimum Requirement for Own Funds and Eligible Liabilities (MREL), May 2024
• Basel Committee on Banking Supervision, Stress Testing Principles, October 2018
• European Central Bank, Stress tests link [https://www.bankingsupervision.europa.eu/banking/tasks/stresstests/html/index.en.html]
• European Banking Authority, EU-wide stress testing link [https://www.eba.europa.eu/risk-and-data-analysis/risk-analysis/eu-wide-stress-testing]
• EU Directive No. 65/2014 on markets in financial instruments (MiFID II)
• European Commission, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on a retail payments strategy for the EU (Retail Investment Strategy)
• EU Directive No. 2366/2015 on payment services in the internal market (PSD2)
• EU Directive No. 2464/2022 on corporate sustainability reporting (CSRD, Corporate Sustainability Reporting Directive)
• EU Regulation No. 2988/2019 on sustainability-related disclosures in the financial services sector (SFDR, Sustainable Finance Disclosure Regulation)
• EU Regulation No. 852/2020 on the establishment of a framework to facilitate sustainable investment (Taxonomy Regulation)
• European Financial Reporting Advisory Group (EFRAG), European Sustainability Reporting Standards (ESRS), November 2022
• European Central Bank, Climate risk stress test, October 2021
• European Commission, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on a digital finance strategy for the EU (Digital Finance Strategy)
• EU Regulation No. 2554/2022 on digital operational resilience for the financial sector (DORA, Digital Operational Resilience Act)
• EU Regulation No. 1093/2010 on markets in crypto-assets (MiCA, Markets in Crypto-assets Regulation)
• Financial Stability Board, Global Monitoring Report on Non-Bank Financial Intermediation 2023, December 2023
• European Systemic Risk Board, NBFI Risk Monitor 2024, June 2024
• European Commission, Report to the European Parliament and the Council on the macroprudential review of credit institutions, systemic risks related to non-bank financial intermediaries (NBFI), and their interconnections with credit institutions, January 2024
• European Commission, Target Consultation Document assessing the adequacy of macroprudential policies for Non-bank Financial Intermediation (NBFI), May 2024

Additional bibliographic references will be provided during the course and made available on the platform virtuale.unibo.it .

Teaching methods

Lectures

Assessment methods

The exam consists of a written test, where students will be required to analytically and numerically apply the knowledge developed in the lectures. Specifically, the written exam covers the topics of the two modules and is divided into two parts, each lasting 55 minutes: the first part consists of 18 multiple-choice questions (a mix of theoretical questions and simple exercises), and the second part consists of two more complex exercises (problems), also in a multiple-choice format. Each correct answer in the 18 questions is worth 1 point (+1); each incorrect answer results in a 0.25 point deduction (-0.25); no answer results in 0 points. Correct answers to the two exercises, also in multiple-choice format, are awarded differentiated points based on difficulty, for a total of 9 points per exercise (18 points for the two exercises). The score distribution for each exercise will be specified in the text. Incorrect answers will result in a 0.25 point deduction (-0.25); no answer results in 0 points. The final grade, in thirtieths, is obtained by proportionally adjusting the total score (first and second part) to a value of 32 (rounded).

Teaching tools

Lectures with projector support

Office hours

See the website of Giuseppe Lusignani