International Banking

ASB4411 – International Banking

Assignment 2014-15

Working in groups of three students only, your assignment is to construct a debate in the form of an essay of no more than 3,000 words the topic below:

International banks are too big and too complex and needing reform. With concern for the impact of financial crises on the wider economy, government actions in the US, UK and European Union legislate the functional separation of banks. Basel 3 already requires banks to hold greater amounts of regulatory capital whilst other commentators are calling for large banks to face incremental capital charges. The response to the 2007-09 global crisis would appear to pay little attention to the benefits of size and diversification, which it seems from official initiatives are deemed to be root causes of current banking sector problems. Your task is to provide a critical assessment of this issue using the structure, which we show below in the rubric.

Rubric: Your essay must comprise three parts:

1. One graduate student should review the terms of the Volcker rule, Vickers proposal, Liikanen and other recent European initiatives;

2. A second graduate student should argue in favour of universal banking;

3. A third graduate student should critically evaluate the Basel 3 requirements on bank capital proposals for large banks to face a “capital charge”.

Hints and Suggestions:

 Familiarise yourself with the debate on the future of large banks.

 Which legislative actions did the authorities in different countries enact and what are the requirements? How do the requirements differ?

 Evaluate arguments relating to issues such as universal banking, diversification, economies of scale and scope, casino banking, financial stability, regulation.

 Read academic articles – see your reading list.

 Include empirical evidence if appropriate.

 Include references at the end of the assignment (references do not count towards the word limit).

 Incorrect and/or sloppy presentation of materials and references will be penalised.

 Please write the number of words on the title page of your essay.

 Write around 1,000 per section. You must submit your essay in two forms:

1. In hard copy format. 2. Electronically via the TurnItIn software in Blackboard.

It is your responsibility to allow enough time for submission. Failure to submit in both formats will result in a zero mark. Please note the University does not tolerate unfair practice. I expect you to behave professionally and courteously to each other at all times. You may select your partners and I do not expect to hear of free riding or other examples of poor behaviour. The School is unable to consider extensions for assignments unless certifiable evidence of a genuine complaint or circumstance supports a request and normally before the submission date. The assignment constitutes 25% of the overall mark for this module. The submission date is Friday 28th November 2014.

PROFESSOR JONATHAN WILLIAMS