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, models.

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.