Financial contracts form the backbone of the financial system. In this class, students will familiarise themselves with run-of-the-mill products like bonds and syndicated loans, but also with more exotic offerings, in particular structured products, like asset-backed securities (ABS) or collateralised debt obligations (CDOs) and the myriad of derivatives, e.g. interest rate and credit-default swaps (CDS) or contracts for differences (CFD). The role these instruments have played during the last global financial crisis and the regulatory reactions they have triggered will be analysed. Topics of study include the obligation to trade derivatives on exchanges, to centrally clear them and report trades, as well as the regulation of commodity swaps, the introduction of production intervention powers and the control and liability of rating agencies. At the end of the class, students will be knowledgeable both about the contract practice of operators in the financial industry and about the regulatory framework that they must obey.
3 ECTS credits