Financial Institutions

(7,155,1.00)

Course outline Fall term 2013 Prof. Dr. Martin Brown

Why do banks exist and what should they do ?

Financial Institutions (7,155,1.00), Prof. Dr. Martin Brown

Why are bank contracts the way they are ?

Financial Institutions (7,155,1.00), Prof. Dr. Martin Brown

Why is the banking sector so fragile ?

Financial Institutions (7,155,1.00), Prof. Dr. Martin Brown

How does banking affect the real economy ?

Financial Institutions (7,155,1.00), Prof. Dr. Martin Brown

Why and how should banks be regulated ?

Financial Institutions (7,155,1.00), Prof. Dr. Martin Brown

Objective
You will understand the economics of banking
the existence of banks the types of contracts (loan, deposit) banks offer and the type of relationships they maintain with

the interactions between banking, business cycles and growth banking regulation

You will get a (brief) overview of the risks which financial institutions must manage

Financial Institutions (7,155,1.00), Prof. Dr. Martin Brown

Banking courses available in the MBF

Risk management Economics of banking Financial Institutions

Financial institutions management Commercial banking Investment banking Private banking Treasury management

Central banking

Household finance

Financial Institutions (7,155,1.00), Prof. Dr. Martin Brown

Approach
What can you expect?

Key concepts
Greenbaum & Thakor: "Contemporary Financial Intermediation"

Theoretical underpinning
examples from Greenbaum & Thakor

Empirical evidence
classroom experiments research papers

Financial Institutions (7,155,1.00), Prof. Dr. Martin Brown

Self - Study
Basic concepts
Greenbaum & Thakor, Chapter 1

3 Problem sets
analytical exercises

Financial Institutions (7,155,1.00), Prof. Dr. Martin Brown

Exam
Analytical exercises Open questions on concepts & empirical evidence Multiple choice questions on concepts & empirical evidence

Financial Institutions (7,155,1.00), Prof. Dr. Martin Brown

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Outline
before the mid-term break
Date (Time) Room
September 18 (10.15 13.00) 02-001 September 25 (10.15 14.00) 02-001 October 2 (10.15 14.00) 02-001 October 9 (10.15 14.00) 02-001 October 16 (10.15 14.00) 02-001 October 23 (10.15 14.00) 02-001

Topic
What is financial intermediation? Loans: Credit analysis

Literature (Greenbaum & Thakor)

Chapter 2: p. 42-72 Chapter 3: p. 92-103 Chapter 4: p. 127-158 Chapter 5

Self-study

Problem set 1 Loans: Contracts and relationships Deposits Chapter 6 Problem set 2 Chapter 10 Problem set 3

Deposit Insurance, the Interbank market and the Lender of Last Resort Corporate Governance & Diversification

Chapter 10

Chapter 14 De Haan & Vlahu (2013) Cornett & Saunders, Chapter 21

Santander case study

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Financial Institutions (7,155,1.00), Prof. Dr. Martin Brown

Outline
after the mid-term break
Date (Time) Room
November 13 (10.15 14.00) 02-001 November 20 (10.15 14.00) 02-001 December 4 (10.15 14.00) 02-001 December 18 (08.15 10.00) 02-001 09-010

Topic
Financial intermediation and macroeconomic performance Bank regulation

Literature (Greenbaum & Thakor)

Levine (1994) Bernanke and Gertler (1995) Chapter 11

Self-study

Trial exam

Repetition session

Final exam

Financial Institutions (7,155,1.00), Prof. Dr. Martin Brown

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Information and support

StudyNet:
lecture notes formulae sheets (for theoretical models) problem sets

Support and contact:

Benjamin Guin (benjamin.guin@unisg.ch)

Financial Institutions (7,155,1.00), Prof. Dr. Martin Brown

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