Financial Markets and Institutions - 5 ECTS

The course focuses on financial markets and institutions. In particular, it concentrates on the features, the objectives, the role and the typologies of financial markets, securities and intermediaries. Some lectures will provide insights about the banks P&L, their supervision and regulation and the Banking Union. The course will conclude with some details on corporate governance and the takeover market.

In detail, the lectures of the course will be about:

• Introduction to the financial system
• Flow of funds in the economic system
• Bank monetary function
• The theory of financial intermediation
• Financial markets: an overview and regulation
• Securities: bonds, equity, derivatives, forex
• Securities markets (bonds, equity, derivatives), the Stock market
• The market players
• Banks P&L, economic and financial equilibrium, asset liability management
• Bank supervision, prudential regulation and the Banking Union
• Classification of risks in banking. RAF and ICAAP
• Corporate governance.Takeover regulation
• Introduction to the asset management

Macroeconomics of Finance - 5 ECTS

Overview

The aim of the course is to stress the importance and the effects of financial choices and of monetary policy decisions on real economic activity. After introducing some basics macroeconomic concepts, useful to understand the real effects of economic policies and the functioning of monetary policy, we study credit market imperfections and how they can cause financial fragility phenomena that can lead to financial and real crises.

Programme

1)       Course objectives and contents

The course will provide students with models to understand how (and why) money and financial variables matter from a macroeconomic perspective. The importance of credit and financial market imperfections for the conduct of monetary policy and for real economic activity will be stressed. At the end of the course the student should be able to understand macroeconomic stabilization policies, the main monetary policy operating procedures, the role of financial intermediation and the effects of financial fragility on the economic system.    

2)       Main topics

Arg.1. Basic macroeconomic concepts (neo-classical model, IS-LM model, the liquidity trap, the AD-AS model, the Phillips curve, the yield curve);

Arg.2. Monetary policy operating procedures (the money multiplier, the central bank balance sheet, the ECB's monetary policy corridor, the Taylor rule, inflation targeting, post-crisis non conventional policies);

Arg.3. Asymmetric information and financial intermediation; credit market imperfections and their effects on economic activity (from Modigliani-Miller to the financial hierarchy; credit rationing: Stiglitz e Weiss (1981), bank runs and financial panics: Diamond e Dybvig (1984), delegated monitoring: Diamond (1984));

Arg.4. Financial fragility and monetary policy transmission mechanisms to real activity (the traditional interest rate channel (money view), asymmetric information effects and the credit channel (credit view): lending view (Bernanke and Blinder (1988)) and the financial accelerator).

• Individual written test
• It is possible to take the written test with mid-term exams or during regular calls (February, July and September)
• You can re-take the exam as many times as you want but it is mandatory to formally reject the previous grade

The textbook has been created for this course.