Unit information: Banking Regulation and Financial Stability in 2020/21

Unit name	Banking Regulation and Financial Stability
Unit code	EFIMM0053
Credit points	15
Level of study	M/7
Teaching block(s)	Teaching Block 2 (weeks 13 - 24)
Unit director	Dr. Danisewicz
Open unit status	Not open
Pre-requisites	None
Co-requisites	Specifically for students studying on the MSc in Economics and Finance - if taking this unit, you can not take: EFIMM0006 - Banking OR EFIMM0054 - Principles of Financial Intermediation 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

This module starts with an introduction to banking crises, and discusses how central banks address financial stability considerations. Subsequently, the module discusses the role of monetary policy for bank risk taking, and how financial stability affects the real economy. The following themes are also covered: measurement of systemic risk; contagion in interbank markets; macroprudential regulation; bank bailouts; and stress testing financial systems. Students of this module will obtain a comprehensive overview of the role of regulation and supervision in banking.

Intended Learning Outcomes

On completion of this unit students should be able to:

1. Demonstrate an understanding of key topics in the empirical banking literature focused on financial regulation and stability;
2. Demonstrate knowledge of the importance of financial stability considerations both from a micro-, as well as from a macroeconomic perspective;
3. Comprehend and analyze sources of instabilities in the financial system and evaluate their effect on other agents in the financial system.
4. Explain the importance of financial stability considerations in central banks;
5. Gauge the extent to which regulation and supervision affect commercial banks’ conduct, and, ultimately, the real economy;
6. Analyse and interpret central bank statements concerning financial stability;
7. Appropriately use microeconometric techniques to answer research questions in banking.

Teaching Information

Teaching will be delivered through a combination of synchronous and asynchronous sessions including lectures, tutorials, drop-in sessions, discussion boards and other online learning opportunities

Assessment Information

This unit will be assessed by group coursework 30%, individual coursework 60% and tests 10%

Reading and References

There is no core text book available. This module relies on research papers and reports issued by central banks and international organisations. The papers in the journals from the reading list are essential reading material. The academic literature will be drawn from the following journals: American Economic Review; Journal of Finance; Journal of Financial Economics; Review of Financial Studies; Journal of Financial Intermediation; Journal of Money, Credit, and Banking. Students are expected to have obtained and read a copy of each paper in the essential reading list prior to each lecture or workshop.