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International Banking Law

Module description

This module introduces you to key aspects of the operation of the law of international commercial banking (and shadow banking), paying particular attention to both transactional and regulatory elements of the subject, including securities finance. You will examine the regulatory structure in which banks operate at an international, EU and UK level, looking for example at the role of Fintech, the Bank of International Settlements, the European Central Bank, EU European Banking Authority and the roles, in the UK of the Prudential Regulatory Authority and Financial Conduct Authority. You will learn about and engage with the Sustainable Finance, the Law and Stakeholders (SFLS) Research Network, which is collaborating with global partners to improve and transform global banking and broader securities finance culture. You will learn about the roles of the World Bank Group, International Monetary Fund, the Financial Stability Board and International Capital Markets Association, alongside innovative and niche groups and think-tanks such as the Global Alliance for Banking on Values and World Pensions Council. You will learn about the causes of the Global Financial Crisis and critically discuss the current regulatory and developments aimed at avoiding future crises. You will be exposed to the key aspects of common law relating to banking. You will have the opportunity to discuss the banker-customer relationship, to look at the operation of syndicated loans in relation to international project finance, and to reflect on the increasing role environmental considerations play in relation to bank lending for major construction projects and in particular the operation of the Equator Principles. Further, you will consider the control of money laundering and terrorist financing, as well as the duties imposed on banks to assist the law enforcement agencies. The module may include presentations from guest lecturers.

Module aims - intentions of the module

The module aims to introduce those students interested in commercial law, international law, and wider development studies to the operation of the international banking and securities finance systems. It aims to give you the opportunity to explore the development and purpose of banking regulations, and to discuss their operation in context, including Fintech. While a key aim is to give you the opportunity to acquire an in-depth knowledge of the law in this area, the module also aims to enable you to evaluate the competing pressures on the banking market today, and the innovative sustainable finance developments. It aims to give students interested in pursuing a career in the area of commercial law a sound introduction to the key principles and practices of international banking law.

Intended Learning Outcomes (ILOs)

ILO: Module-specific skills

On successfully completing the module you will be able to...

• 1. Demonstrate a detailed and systematic knowledge of the international regulatory structures applied to modern banks, and evaluate whether such structures address the problems of regulation posed by the recent international financial crisis (the so-called credit crunch);
• 2. Demonstrate a detailed and systematic understanding of the role of bank lending in relation to major infrastructure projects with particular attention to environmental considerations;
• 3. Demonstrate deep and critical awareness of a wide range of social and contextual implications of the various legal dimensions of international banking;

ILO: Discipline-specific skills

On successfully completing the module you will be able to...

• 4. Demonstrate detailed and comprehensive knowledge of international, European Union and UK legal instruments, case-law, statutory materials and critical legal literature as well as critical awareness of their contextual implications;
• 5. Demonstrate flexible and innovative capacity to analyse complex legal problems, identify the relative significance of applicable rules and principles, and select appropriate methods for investigating and critically evaluating them;
• 6. Apply detailed and comprehensive legal knowledge to a problem and argue alternative approaches;

ILO: Personal and key skills

On successfully completing the module you will be able to...

• 7. Identify, retrieve and use the full range of available resources efficiently and autonomously for specific learning tasks;
• 8. Clarify, plan and undertake tasks confidently and independently, individually and/or with others, to reflect critically on the learning process and to make use of feedback effectively;
• 9. Work independently, within a limited time frame, to complete a specified task.

Syllabus plan

Whilst the module’s precise content may vary from year to year it is envisaged that the syllabus will cover the following topics:

• General history and introduction of the development of modern banking, including shadow banking, securities finance and Fintech
• The structure of international banking regulation in particular the work of the Financial Stability Board and the Bank of International Settlements and Basle I-III Agreements
• European Union Banking regulation in particular the operation of the Single Supervisory Mechanism and the European Banking Authority
• UK banking regulation – the role of the Bank of England, the Prudential Regulatory Authority and the Financial Conduct Authority in relation to the operation of banks
• Old and new currencies, including Bitcoin.
• The regulation of money laundering and terrorist financing
• The banker-customer relationship and the key private law elements of typical banking contracts that are important in relation to business lending
• The law relating to commercial loans – using a syndicated loan as a case study
• Sustainable Finance, the Law and Stakeholders framework.
• The role of multilateral financial institutions (e.g. the World Bank Group) and niche organisations such as the Global Alliance for Banking on Values in bringing regulatory changes for sustainable banking
• Environmental obligations imposed on banks in relation to large scale project finance – and in particular the operation of the Equator Principles

Learning activities and teaching methods (given in hours of study time)

Details of learning activities and teaching methods

Formative assessment

Summative assessment (% of credit)

Details of summative assessment

Details of re-assessment (where required by referral or deferral)

Indicative learning resources - Basic reading

A. Arora Banking Law (Pearson 2014)

I. Chiu, J. Wilson Banking Law and Regulation (OUP 2019)

L. Dragomir European Prudential Banking Regulation and Supervision: The Legal Dimension (Routledge 2010)

E. P. Elinger, E. Lomnicka, C.V.M Hare Ellinger’s Modern Law of Banking (5th ed.,OUP 2011)

A. Hudson The Law of Finance (Sweet & Maxwell 2013)

Indicative learning resources - Web based and electronic resources

Use of law databases – such as Westlaw, Lexisnexis, Lawtel as well as the Library Electronic Journals database, to consult especially the Journal of International Banking Law and Regulation. You will also be encouraged to use the FT.com website.

Key words search

Banking; Money Laundering; Sustainable Finance