Handboksinformation

Mål

The course provides an overview of recent theories explaining the role of financial institutions, in particular banks, in a modern economy. Theories on asymmetric information, moral hazard, monitoring and screening will have an important part in the course. Why do bank-customer relationship seem to be important in credit markets? How can we explain market imperfections in the credit markets, and what do these imperfections imply for standard welfare theory and macroeceonomics? Are credit markets characterised by market power or are they competitive, what is socially preferable? In addition the course will look at some explanations of banking crises, and what role the deposit insurance should play. We will try to uncover issues which will help understand the working of banks and banking markets with its specific characteristics. Attention will be directed toward the understanding of the reasons for the existence of the banking firm and various theories which try to explain the behavior of banks and problems related to these. Attention will also be directed toward the formation and estimation of econometric models of oligopolistic banking markets and the interpretation of results and their application to policy formation concerning competitive viability, efficiency, and government intervention.

Undervisningsspråk

English

Förkunskaper

Intermediate microeconomics, a course in econometrics.

Undervisningstimmar

30h

Undervisningsformer

Lectures

Litteratur

Frexias, X. & Rochet, J-C (1998): Microeconomics of Banking. MIT Press. Chapters 2-5 & 9.
De Gryse, H, Kim, M. & Onega, S (2009): Microeconometrics of Banking: Methods Applications and Results. Oxford University Press.

Examination

Term paper

Examinator

Hauswald, Robert