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2688 Banking and Finance, 6 cr 
Code 2688  Validity 01.01.1950 -
Name Banking and Finance  Abbreviation BankingFinance 
Credits6 cr  Date of expiry 10 years
TypeAdvanced studies Subject260 Economics 
KindCourse  Hours  
Study right   GradingStandard Scale 
Recommended time 
   
Organisation Economics, Helsinki 

Description
Course Description 

This course has two parts. The first part consist of an introduction to financial economics.  The second part deals with microeconomics of financial intermediation. The course will emphasize the role of asymmetric information in financial and credit markets. It will also explore the design of risk management as well as the theories of financial intermediation and its regulation. The course will focus on the following issues:

-the role of financial markets,
-informational efficiency of markets,
-risk pricing and management,
- corporate governance
- entrepreneurial finance
- asymmetric information, adverse selection, and moral hazard in corporate finance and credit markets
- relationship lending and bank monitoring
- screening and the use of collateral in bank lending
- financial stability and financial crises
-bank runs, deposit insurance and systematic risk, 
-securitization and the subprime crisis,
-the regulation of banks

 
Learning Goal 

Banking: After the course students have an analytic perspective on crucial issues in modern banking with a particular emphasis on the implications of asymmetric information and they are familiar with the topical issues related to European bank regulation.

Finance: Students understand the limitations of frequently used models for risk pricing and management in financial markets and are able to analyze and propose solutions to problems caused by informational asymmetry in these markets.

 
After completing the course, you will be able to 
  • understand the implications of asymmetric information for financial and credit market efficiency
  • analyze and propose solutions to problems caused by informational asymmetry in financial and credit markets.
  • understand the role of banks in an economy and their vulnerability to crises
  • understand the limitations of frequently used models for risk pricing and management in financial markets 
  • understand the goals and limitations of bank regulation 
  • analyze the topical issues related to financial intermediaries and their regulation 
  • participate in the debates concerning financial crisis and bank regulation analytically
 
Pre-requisites 

An Intermediate level course in  microeconomics, a course in econometrics.

 
Total Student Workload 

160 hours divided into
Scheduled (contact) hours: 30 h
Non-scheduled work: 130 h

 
Instruction 

Lectures,individual assignment,bilateral intervews

 
Literature and Course Material 
  • Bénéplanc, G. & Rochet, J.-C. (2011). Risk management in turbulent times. New York: Oxford University Press
  • Freixas, X. & Rochet, J.-C. (2008). Microeconomics of banking. 2nd Edition. Cambridge, Mass: MIT Press. 
  • Tirole, J. (2006). The Theory of Corporate Finance. Cambridge, Mass: MIT Press. (Selection of chaptersfor the books above according to instructions from lecturer)
 
Assessment 

Exam

individual assignment including an oral examination with a lecturer

 
Non-degree studies (Open University, JOO and Contract Studies) 

Open university quota: 3
Quota for JOO-students: 3

 


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