The objective of this course is to study the workings of the financial system,as constituted by the financial contracts and securities that are
traded in markets, devoting special attention to financial intermediaries. We
will analyze the reasons why and how money and credit flows from savers to
entrepreneurs to create value.
Through a good understanding of the micro-structure of credit flows,
students should get a better grasp of the macroeconomic consequences of
regulation, monetary, and central bank balance sheet policies. The approach relies
on a discussion of facts together with the analysis of formal, albeit simple,
The models of financial intermediaries, financial contracts
and markets studied in the course will allow students to evaluate empirical applications, concerning
how financial systems operate and the consequences of regulation and central
bank policies. In particular, they: (i)
learn what are financial intermediaries and why they exist; (ii) can identify
the main banking risks and propose management tools for these risks; (iii)
comprehend the implications of on and off balance sheet items; (iv) grasp the
implication of regulations on the funding and activities of banks and other
intermediaries; (v) learn how to analyze the effects of banking regulation;
(vi) understand the importance of liquidity
and its determinants.
Employability skills also include the development of (i) awareness of
the operation of financial markets in advanced economies; (ii) clear, concise
and well organised answers to assigned questions; (iii) personal time
management, target-setting to achieve the timely completion of term assignments
and other reading assignments.