The overall course aims at discussing financial markets, in terms of participants (e.g. banks and market players), organization of the markets, institutions  (e.g. Central banks) and policies and the effect of financial choices on the real economy activity. It also provides 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.   

The course fits into the overall program curriculum pursuing some of the defined general learning goals. In particular, the course contributes to the development of the following capabilities:

• Understand context, functions, processes in a business and financial environment and the impact of those factors on business performance

• Identify trends, technologies and key methodologies in a specific domain (specialization streams)

• Design solutions applying a scientific and engineering approach (Analysis, Learning, Reasoning, and Modeling capability deriving from a solid and rigorous multidisciplinary background) to face problems and opportunities in a business and industrial environment

The student:

- understands the financial system and the financial intermediaries (e.g. banks, investment funds, ...

- identifies main figures and trends related to the financial markets and the banking system

- develops knowledge in terms of the role of the digital innovation inside banking and financial systems

- understands the financial/monetary context and knows how the different transmission mechanisms of financail/monetary shocks to the real economy operate;

- knows which are the implications and the possible evolving trends of imperfections in credit markets on firms' borrowing possibilities and, in general, on the macroeconomic outcomes;

- knows how to design new economic scenarios and/or the effects of monetary policies on economic agents' behavior by simplyfing and proper modeling the economic context;

- can identify the effetcs of financial fragility on the economic system.

The overall course aims at discussing financial markets, in terms of participants, organization, institutions and policies and the effect of financial choices on the real economy activity.

Overview - Financial Markets and Institutions

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

Overview - Macroeconomics of Finance

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.

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

Block 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);

Block 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));

Block 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).

For the Macroeconimcs of finance part, students should know funamentals of microeconomics and macroeconomics theory. Whenever those were not acquired previously, the MOOC "Economics" should be followed and succesfully completed. 

• The course will include traditional lectures and practice session.

• The final evaluation will be based on a final individual written test. The test includes:

• for the FMI part, questions and exercises

• for the MOF part, two questions on the first part (Blocks 1 and 2) and two questions on the second part (Blocks 3 and 4). In order to pass the exam the student must obtain a sufficient mark both in the first and in the second part.

  The final test will be based both on numerical and qualitative questions in order to assess if the student:

  - knows how to solve an economic problem and how to measure the effects of monetary and fiscal shocks on the economic equilibrium;

  - is able to identify different trends in the main economic variables as agents' expectations change;

  - knows how the central bank takes and implements monetary policy decisions both in standard and non-standard times;

  -  can discuss critically a newspaper article on the topics covered in the course adapting the adequate theoetical model to the practical problem at hand.

For FMI part. The textbook has been created for this course. It will be available in the libraries near Bovisa campus

For Macro part

For Macro part. Note: Per i punti 1-9 (in alternativa al testo di Varian)

For Macro part. Note: Per il punto 10, materiale didattico disponibile su Corsi On Line

For Macro part. Note: Per i punti 11-16.

For Macro part. Note:Per i punti 11-16. (in alternativa al testo di Dornbusch, Fischer, Startz).

For Macro part. Note: Per i punti 11-16 (in alternativa al testo di Dornbusch, Fischer, Startz).