75663 - Economics of financial intermediation

Learning outcomes

This course gives an overview of financial markets, financial institutions, and financial authorities. Specific topics include: the supply of and demand for loan funds, securities, and bonds. Emphasis is placed upon the economic effects of financial institutions and markets upon various sectors of the economy. We will outline the institutional structure of financial intermediation and the concerns facing the regulators and managers of these institutions.

Course contents

1. Function and structure of financial markets
2. Fundamentals of financial markets: Interest rates and market efficiency
3. The money markets
4. The bond market
5. The stock market
6. The derivatives market
7. Why financial institutions exist: Asymmetric information
8. Commercial banking
9. Risk management in financial institutions
10. Bank regulation
11. Financial stability and financial crises
12. Other financial intermediaries

Readings/Bibliography

Frederic S. Mishkin and Stanley G. Eakins, Financial Markets and Institutions, global edition, 9^thedition, 2018, Pearson.

Any other material that will be posted on IOL.

Teaching methods

Lectures and exercises

Assessment methods

Students can take either: (1) the mid-term exam (covering the first part of the course) and the second partial exam (covering the second part of the course); or (2) the full exam (covering the entire material). All exams (partial and full) consist of a combination of multiple-choice questions and exercises. The exams are closed-book written tests, only non-programmable calculators are allowed (mobile phones cannot be used as calculators!).

Students can reject a pass grade only once. To this end, he/she must email a request to the instructor within the date set for registration. The instructor will confirm reception of the request within the same date. Rejection is intended with respect to the whole exam, whose grade is the average of the grades obtained in the two partial exams. If the grade is rejected, the student must retake the full exam. The only grade that can be rejected without any communication from the student is the one of the first mid-term: in this case the student can either take the second partial exam or sit the full exam (thus losing the grade obtained in the first mid-term).

Teaching tools

Slides

Example exercises

Office hours

See the website of Mascia Bedendo