Unit information: Banking in 2018/19

Unit name	Banking
Unit code	EFIMM0006
Credit points	15
Level of study	M/7
Teaching block(s)	Teaching Block 2 (weeks 13 - 24)
Unit director	Dr. Fabiana Gomez
Open unit status	Not open
Pre-requisites	None
Co-requisites	If taking this unit, can not take: EFIMM0054 - Principles of Financial Intermediation OR EFIMM0053 - Banking Regulation and Financial Stability OR EFIMM0052 - Banking Management and Risk Management
School/department	School of Accounting and Finance - Business School
Faculty	Faculty of Social Sciences and Law

Description including Unit Aims

The objective of the course is to understand the role of banks in the economy and the sources of fragility of the banking sector. It begins by introducing the main functions of banks in the economy. This is followed by the study of the economic literature about the existence of financial intermediaries. Then, the causes of financial crises are analyzed: financial panics, bubbles, contagion and endogenous risk. Next, the course focuses on the Subprime crisis to analyze its causes and consequences. The course ends with an analysis of banking regulation.

Intended Learning Outcomes

1. To understand the fundamentals of financial intermediaries
2. To identify the main source of risks of individual banks from their balance-sheets.
3. To compare and critically analyse the performance of different banks
4. To recognize the main sources of fragility of the banking sector
5. To understand economic problems behind bank runs, bubbles, financial contagion and endogenous risk
6. To identify the market failures leading to the Subprime Crisis
7. To understand current bank regulation and the rationale behind it

Teaching Information

Lectures and workshops.

Assessment Information

All of the ILOs will be assessed by a 2 hour exam (80%)

ILOs 2, 3 and 7 will be also assessed by a written group course work (20%). All students in a group will be awarded the same mark. The course work will have a length of 1500 words, and groups are made up of up to 4 students. The objective of the coursework is to give students the opportunity to discuss and confront their opinions with their peers in light of the topics covered in the course.

Reading and References

Freixas and Rochet, Microeconomics of Banking, 2^nd edition, 2008 MIT Press

Saunders and Cornett, Financial Markets and Institutions, 6^th edition, 2015, McGraw Hill

Resti and Sironi, Risk Management and Shareholders Value in Banking, 2007, Wiley