75935 - Rules and Controls of Financial System

Learning outcomes

The course aims to present the main banking regulation tools, to understand and manage banking risks, specifically the typical "credit risk". At the end of the course, the student will be capable of analyzing the economic motivations of financial regulation concerning banks and financial markets, with specific reference to the rules governing the bank-businesses relationship. The student will be capable of analyzing the main contents of the Basel Accords.

Course contents

1. The system of risks in financial intermediation. Risk classification, with particular reference to credit risk. Risk management, capital, and the intermediaries' crisis.
   
2. Regulation and supervision of the financial system. Rationale, goals, models, and tools of regulation and supervision. The new architecture of supervision within the framework of the European Union.
3. Supervision of financial intermediaries. Basel 2 and capital adequacy. The prudential control process: the ICAAP and SREP processes. Crisis management and guarantee systems.
4. Corporate governance and internal governance. Internal auditing, risk management, and compliance. The remuneration and incentive systems. Conflicts of interest in financial intermediation.
5. ESG and ICT risks.

Readings/Bibliography

Il sistema finanziario, Forestieri, G., e Mottura, P. 2017, Egea Editore

Rischio e Valore nelle Banche, Resti, A., e Sironi, A., 2021, Egea Editore.

BANCA D'ITALIA - Circolare Banca d’Italia n. 285 del 2013, ultimo aggiornamento.

2. SSM - https://www.bankingsupervision.europa.eu/home/html/index.en.html

3. SREP -https://www.bankingsupervision.europa.eu/banking/srep/html/index.en.html

4. ECB - Guida sui rischi climatici e ambientali Aspettative di vigilanza in materia di gestione dei rischi e informativa, 2020

Teaching methods

In-class lectures and discussion of case studies.

Assessment methods

Written exam at the end of the course, that will last 2 hours. The exam comprises multiple choice, and open end questions, problem solving and case study discussion.

The final mark is expressed out of 30 points according to the following graduation:

• <18, fail;
• 18-23, sufficient;
• 24-27, good;
• 28-30, very good;
• 30 with laude, excellent.

A positive final mark can only be refused once.

Teaching tools

Teaching material (slides and discussion of case studies).

The slides can be downloaded by clicking on "Teaching resources on Virtuale" or directly from the "Virtuale" website

Office hours

See the website of Andi Duqi