75738 - Economics and Management of Banking

Learning outcomes

The aim of the course is to understand the functions of the bank in renewed national and international framework. The emphasis of the course in on the firm-bank relationship. At the end of the course the expectation is that the student will know: i) the main financial firm sources; ii) on the firm side to evaluate the way to finance its investments; iii) on the bank side to provide a comprehensive set of corporate banking tools; iii) to correctly evaluate the firm credit risk.

Course contents

The aim of the course is to introduce the student to the theoretical and empirical dynamics that characterize the bank-firm relationship. First, the course aims to analyze the firm financial structure, and then the technical characteristics of the financial instruments used to finance the firm investments. After having described the firm-bank relationship lending characteristics the course aims to describe the credit rationing phenomenon during the financial crisis. Finally, data and case studies are introduced to understand the evolution of the firm-bank relationship over the last 10 years of crisis.

1. Introduction to the course. The relationship-based system versus the arm's lenght system.

2. The financial structure: trade-off theory versus pecking order theory - theoretical aspects

3. to be continued - empirical aspects

4. Informational asymmetries and financial constraints. Introduction to Credit Rationing

5. The credit rationing

6. The bank-firm relationship

7. Credit risk management - the Basel Pillars

8. The structure of the banking system in Italy.

8. The rating procedures based on the Basel Accords

9. Local banks and credit rationing during the crisis

10. The indebtedness degree of Italian companies

Readings/Bibliography

P. Brighi - Credit and Enterprise Finance - BUP, Bologna 2008.

Further readings will be offered at the beginning of the course.

Teaching methods

Traditional lectures with projetor support and class case-study discussion.

Assessment methods

The course is recommended because in the classroom, as well as by the teacher and external speakers, further details on specific parts of the program will be offered. The slides constitute a didactic tool used by the teacher to synthesize the topics taught in the lesson but do not replace the study of the book and the supplementary readings suggested by the teacher that remain compulsory. In other words, the slides are not exhaustive of the program, so it is recommended to integrate with the related parts of the book that deal with the topic discussed in the lesson.

The exam is a written test on the whole duration of 1 hour and 30 minutes and an optional oral test to be supported by the same written test. Oral examination may result in both a positive and a negative adjustment to the grade obtained in the written test. Those who in the written examination had reached an inadequate vote (equal to 17) must submit the oral test compulsory in order to achieve the sufficiency. Those who have received insufficient score in the script (less than 17) must repeat the exam. Those who are not satisfied with the final vote can repeat the script in any of the subsequent appeals, with the warning that the new vote will automatically replace the previous one. The result of the written exam if positive is to be recorded on the scheduled date for verbalization. If the student does not appear on the verbalization day, the teacher will proceed to automatic verbalization through the ALMAESAMI system. Therefore, those who intend to reject the vow of the script must be obliged to present themselves on the day of the verbalization by communicating their intentions.

The written exam is structured in three open questions represented by exercises and / or discussion of theoretical arguments that are the subject of the program. Oral examination is optional and may only be supported at the same time as the indicated date.

Teaching tools

Frontal lectures by ppt and lab.

Office hours

See the website of Paola Brighi