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 recent financial, sovereing debt and recent pandemic crises. 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 - the recent concolidation process.

9. Seminars

Readings/Bibliography

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

Ch. 15 Hillier-Ross-Westerfield-Jaffe-Jordan, Corporate finance, McGraw Hill III ed.

Further readings will be offered at the beginning and during 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 of 1 hour based on an open question and 10 multiple choices. Those who have received insufficient score in the written exam  (less than 17) must repeat it. Those who are not satisfied with the final mark can repeat the written exam in any of the subsequent sessions, with the warning that the new mark will automatically replace the previous one. The result of the written exam if positive must be recorded on the scheduled date for registration. If the student does not show  on the registration day, the teacher will proceed to automatic registration through the ALMAESAMI system. Therefore, those who intend to reject the mark must be obliged to communicate their intent to the teacher the scheduled day of the exam registration.

The written exam is structured in two parts. An open question based on theoretical topics and/or exercises and 10 multiple choices.

Teaching tools

Frontal lectures by ppt and lab.

Office hours

See the website of Paola Brighi