ACFI7012 Financial Markets and Institutions Assignment

How to Approach the Assignment

The point of this assignment is to encourage you to think about the significance of the Basel 3 framework for financial regulation. The assignment asks three main questions and it would be sensible to take them in sequence. Start by looking at the initial Basel 3 framework introduced following the 2007-2008 crisis and consider what the problems were that the framework was trying to solve and whether it was sufficiently rigorous and robust to solve those problems. Then move on to consider the ways in which it is now being proposed that the framework should be modified and discuss whether the proposed changes appear sensible or not. That will then give you a good basis for considering ways in which the framework might be extended and developed in the future. When carrying out your analysis you should think about the costs and benefits of financial regulation. There is always a trade-off involved between the safety and stability which arises from strong regulation and the need for dynamism in the financial system, which may involve taking risks. You should consider how the Basel 3 framework manages that trade-off and whether current or future reforms to that framework might improve the way the trade-off is managed.

Assessment criteria

The assessment criteria for assignment two are as follows (all given equal weight) 

• Understanding of the theory and practice of the regulation of financial institutions

• Ability to apply that understanding to the practical context of the Basel 3 Accord.

• Ability to use your analysis of Basel 3 to assess the adequacy of regulation and to suggest reforms if necessary 

• Structure and coherence of the assignment (including choice of relevant source material)

See the marking grid below for further discussion of these criteria.

Hand-in date and instructions

Assignment two should be uploaded electronically to the Assignment Two Turnitin drop-box on the ACFI7012 Moodle site by 1.00 pm on Tuesday 7 May 2024 (week 13). You should provide your student number but not your name, to ensure anonymous marking.

Important – Assignment Plans

to provide formative feedback on assignment two you are required to submit an assignment plan for assignment two to the assignment plan drop-box set up on the Moodle site for the module by 1.00 pm on Monday 15 April 2024. I will aim to get comments on the assignment plans back to you by one week following submission. The assignment plans should be no more than two sides of A4 and should contain the following

• A list of four or five key issues you plan to investigate in the assignment (these should be important areas that you think you will need to look at to do the assignment well. You may well find it useful to set out these issues in the form of questions that you think a good essay would need to answer).

• A brief account of the planned structure of your essay

A short account of some of the main sources you plan to use

Learning outcomes assessed

Both assignments are designed to test your ability to

1. Exhibit a thorough understanding of  the main theoretical frameworks  which have been used to analyse  developments in financial markets  and of their key assumptions and  methodologies

2. Demonstrate skills of critical  appraisal with regard to the evidence put forward to validate  theoretical approaches

3. Apply the theoretical and empirical knowledge obtained in the module to the analysis of the impact of financial markets and institutions on businesses using funds and the regulatory issues which arise from this impact.

4. Demonstrate an ability to apply  academic knowledge and skills in  practical contexts

5. Demonstrate an ability to engage in  problem solving in ways appropriate  to both participants in and regulators  of the financial system

6. Demonstrate an ability to apply  formal modelling techniques in the  context of financial theory