Магистратура
2020/2021
Банковское дело
Статус:
Курс по выбору (Финансовая экономика)
Направление:
38.04.01. Экономика
Кто читает:
Международный институт экономики и финансов
Где читается:
Международный институт экономики и финансов
Когда читается:
2-й курс, 3 модуль
Формат изучения:
без онлайн-курса
Прогр. обучения:
Финансовая экономика
Язык:
английский
Кредиты:
3
Контактные часы:
32
Course Syllabus
Abstract
Banking is an optional course for the master level students at ICEF. The course is divided into parts. The first part of the course (part A) is focused on theoretical aspects of banking. The second part of the course (part B) is will cover the main empirical contributions that have been recently published in the academic journals. This material will illustrate how banking theories introduced in the first part of the course stand against the empirical evidence. Prerequisites: For part A, some knowledge of game theory and the basic concepts of modern finance is recommended. For part B, a good knowledge of panel data econometrics methods and bachelor’s level of banking is recommended.
Learning Objectives
- to provide an overview of the theoretical aspects of banking
- to advance the students’ understanding of the main regulatory debates regarding the role of banking industry in the economy
Expected Learning Outcomes
- Explain why financial intermediaries exist
- Outline the role played by asymmetric information in the financial intermediation process
- Explain the credit rationing phenomenon
- Explain bank runs and banking regulation
- Critically analyze the main empirical contributions that have been recently published in the academic journals
Course Contents
- Banking theory: 1) Why financial intermediaries exist.Our first objective is to understand what a bank is, what banks do, and the role of banks in the resource allocation process. In particular, in order to assess why financial intermediaries exist, we will study what are the important features of reality that are overlooked in the Arrow-Debreu model of complete contingent markets.
- Banking theory: 2) The asymmetric information justifications of financial intermediation.Our second objective is to present the asymmetric information justifications of financial intermediation by exploring different theories of financial intermediation. In particular, we will focus on the model with adverse selection by Leland and Pyle (1977) to show that if borrowers form partnerships (which are interpreted as financial intermediaries), they are able to obtain better financing conditions than by borrowing individually.
- Banking theory: 3) The equilibrium of the credit market.We study credit market by focusing on the possibility of credit rationing (the demand from credit exceeds supply at the prevailing interest rate).
- Banking theory: 4) Bank runs and the lender of last resort.Bank runs may develop into a bank panic. We focus on how the Central Bank could prevent such contagion by playing the part of a lender of last resort.
- Banking theory: 5) Regulation and its justifications.We examine the justifications of banking regulation (fragility of banks and cost of bank failures; protection of depositors’ and customers’ confidence, cost of bank failures) and instruments of banking regulations.
- Banking empirics: 1. Overview of the bank’s financial statements, measures of market power and bank’s soundnessNon-performing loans, Bank reserves, Net interest rate margin, HirschmannHerfindahl index, CR3, Panzar-Rosse H-statistic, Lerner index, Z-score
- Banking empirics: 2. Bank lendingLoan pricing, Credit rationing, Adverse selection, Relationship lending, Risk overhang
- Banking empirics: 3. Bank funding and liquidity riskDeposit contracts, Market discipline, Bank runs, Liquidity insurance, Deposit insurance
- Banking empirics: 4. Deposit insurance and banks’ risk takingMoral hazard, Liquidity regulation, Liquidity risk management, Liquidity coverage ratio
- Banking empirics: 5. Competition, risk taking, capital requirementsCompetition-fragility hypothesis, Competition-stability hypothesis, Franchise or charter value of banks, risk-shifting problem, rationale for capital requirements, screening of borrowers
- Banking empirics: 6. Banks’ size, Too-Big-to-FailEconomy of scale, Too-Big-to-Fail (TBTF)
- Banking empirics: 7. Bank capital and regulationCapital structure of banks, capital regulation, regulatory capital, Basel accords, riskweighted assets
- Banking empirics: 8. Bank ownership and governanceGovernment ownership of banks, cooperative banks, corporate governance of banks
- Banking empirics: 9-10. Student’s presentations of academic papers
Interim Assessment
- Interim assessment (3 module)0.06 * attendance + 0.03 * class participation + 0.65 * final examination + 0.08 * in-class performance + 0.18 * presentation
Bibliography
Recommended Core Bibliography
- Microeconometrics of banking : methods, applications, and results, Degryse, H., 2009
- Microeconomics of banking, Freixas, X., 1999
Recommended Additional Bibliography
- Contemporary financial intermediation, Greenbaum, S. I., 1995
- Frederic S. Mishkin. (2013). The Economics of Money, Banking and Financial Markets: Pearson New International Edition : The Business School Edition. Harlow, United Kingdom: Pearson. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1418827