Courses and study plans / Economics
2688 Banking and Finance
|Period: 3||20.1.2014 - 7.3.2014|
This course presents a modern approach to the economics of financial intermediation. The course will emphasize the role of asymmetric information in credit markets. It will also explore the design of risk management as well as regulation of banks. The course will focus on the following issues:
-the role of financial markets,
-informational efficiency of markets,
-risk pricing and management,
-information asymmetry in corporate finance.
-models of credit markets with asymmetric information,
-information acquisition by banks,
-effects of competition in credit markets,
-competition versus financial stability,
-bank runs, deposit insurance and systematic risk,
-information exchange between banks,
-securitization and the subprime crisis,
-the regulation of banks.
After the course students have a good perspective on the crucial issues in modern banking with a particular emphasis on the implications of asymmetric information. Students are also familiar with the topical issues related to the successful operation of financial intermediaries and the effects of different types of regulation.
Finance: Students understand the limitations of frequently used models for risk pricing and management in financial markets and are able to analyze and propose solutions to problems caused by informational asymmetry in these markets.
Language of Instruction
Intermediate microeconomics, a course in econometrics.
Selected parts of
Frexias, X. & Rochet, J-C (2008): Microeconomics of Banking. MIT Press, second edition.
Bénéplanc, G. & Rochet, J.-C. (2011) Risk Management in Turbulent Times.
as specified by the instructors.
Evaluation and Examination