This lesson examines the regulatory frameworks governing financial markets and institutions, and the concept of market efficiency .

8.1 The Rationale for Financial Regulation
The objectives of regulation include protection of investors and depositors, systemic stability, consumer protection, and market efficiency . Regulatory frameworks in the US and Europe share common objectives but differ in structure and approach . Students compare international regulatory frameworks and assess their impact on market stability .

8.2 Regulatory Frameworks
Key regulatory frameworks include: Basel Accords (capital adequacy), MiFID II (European securities regulation), Dodd-Frank Act (US post-crisis reform), and EMIR (European derivatives regulation) . Students assess the effectiveness of prudential and conduct regulation .

8.3 Market Efficiency and Ethical Considerations
Market efficiency theory suggests prices reflect all available information . The role of regulation in incentivising ethical behaviour and improving market efficiency is critically evaluated . Sustainability and ethics in financial decision-making are explored . Students analyse historical financial crises and their lessons for regulation