Law and Economics: Key Features

The Doctorate / Ph.D. Program in Law and Economics of Money and Finance offers profound academic training to highly qualified international students, who have previously graduated from either law schools or economics departments/business schools. The program will enable its graduates to successfully apply for academic and non-academic international positions.

The research topics broadly cover three areas: (1) regulation of financial markets and the intermediaries acting on these markets; (2) the role of financial markets in shaping corporate structure and development; and (3) financial stability and stability of the financial market system, the institutional framework for monetary and fiscal policies.

The first area builds on the observation that financial markets have become more interconnected, both internationally and across the different financial sectors. This change in the market environment raises radically new questions for regulators of financial markets and intermediaries. The questions to be addressed take into account the new complexities: What is the optimal structure of investor protection in a competitive financial environment? How should households in precarious financial conditions be specifically supported and protected? What is the impact of European harmonization efforts in financial regulation of banks and rating agencies? In all these questions, the interaction between the legal environment and individual, economic behavior plays an important role and has to be taken into account.

The second area considers the determinants of corporate development, in terms of financial structure, organization and governance. This requires taking into account institutional aspects, in particular the historical development of legal systems and accompanying institutions. The institutional environment is a crucial determinant of how a market system and its agents react to the changing conditions in financial markets and in the corporate sector. These changes in particular affect the role of financial intermediaries and the market for corporate control. This area of research considers the various instruments available to determine corporate financial structure and control and how they interact with the institutional environment. Moreover, it analyzes to what extent private contracting between the corporate and financial sector substitutes or counters the development of the regulatory and legal system.

In light of the interdependence between capital markets and financial and monetary stability, the goal of the third research area is to examine essential aspects of the effectiveness and implications of monetary and fiscal policy, the coherence between the development of financial markets and monetary and macroeconomic stability, as well as questions concerning the institutional structuring of important policymakers.

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