AØKA08069U Economics of Banking (F)

Volume 2023/2024
Education

MSc programme in Economics – elective course
The course is part of the Financial line at the MSc programme in Economics,   symbolized by ‘F’.

 

The PhD Programme in Economics at the Department of Economics:

  • The course is an elective course with research module. In order to register for the research module and to be able to write the research assignment, the PhD students must contact the study administration AND the lecturer.

 

The course is open to:

  • Exchange and Guest students from abroad
  • Credit students from Danish Universities
  • Open University students
Content

The course covers two aspects of the topic, microeconomics of banking and risk management. In the microeconomics part, teaching starts with discussing key competences of banks, proceeds to fundamental aspects of banking such as the loan contract and credit rationing, discusses liquidity problems and bank runs, and ends up with a treatment of bank regulation involving the roles of central banks, deposit insurance and financial supervision authorities. In the risk management part, the course covers the basics of risk management in banks, measurement of risk, and then discusses the different types of risk occurring in banking, namely liquidity risk, interest rate risk, market risk, credit risk, and operational risk. For each of the risk types, the course covers the measurement of risk as well as methods for reducing risk.

 

Course Outline:

  • Introduction: Key competences of banks
  • Types of financial intermediation; basics of risk management
  • The loan contract; interest rate risk
  • Rationing in the credit market; market risk
  • Securitization and shadow banking
  • Credit risk
  • Payments and its impact on banking
  • Competition and risk taking
  • Irregularities in banking
  • Liquidity crises and bank runs; operational risk
  • Deposit insurance
  • Lenders of last resort
  • Reorganizing and closing banks
  • The Basel regulations
Learning Outcome

After completing the course the student is expected to be able to:

 

Knowledge:

  • Identify and assess the roles of banks in the financial sector, related to the basic problems of asymmetric information in its different forms.

  • Account for the basic principles of risk management and of risk measures, as well as the basic organisation of risk management in a bank.

  • Discuss the causes of bank runs and bank panics.

  • Define the different institutional setups designed for coping with bank runs.

 

Skill:

  • Master relevant theories and analyze problems related to financial intermediation.

  • Evaluate alternative methods for managing risk in banks.

  • Give suggestions for suitable regulation in the financial sector.

 

Competences:

  • Assess properties of credit markets, designing improvements of the contract structure,

  • Give advice for the regulation of financial intermediation and for the prevention of financial crises.

 

H.Keiding, Economics of Banking, Palgrave-Macmillan 2015.

There are no recommended academic qualifications other than the requirements to the study programme.
Lectures.
Schedule:
2 hours lectures 1 to 2 times a week from week 6 to 20.

The overall schema for the Master can be seen at KUnet:
MSc in Economics => "courses and teaching" => "Planning and overview" => "Your timetable"
KA i Økonomi => "Kurser og undervisning" => "Planlægning og overblik" => "Dit skema"

Timetable and venue:
To see the time and location of lectures please press the link/links under "Timetable"/​"Se skema" at the right side of this page (F means Spring).


Please be aware:
- The schedule of the lectures can change without the participants´ acceptance. If this occure, you can see the new schedule in your personal timetable at KUnet, in the app myUCPH and through the links in the right side of this course description and the link above.
- It is the students´s own responsibility continuously throughout the study to stay informed about their study, their teaching, their schedule, their exams etc. through the curriculum of the study programme, the study pages at KUnet, student messages, the course description, the Digital Exam portal, Absalon, the personal schema at KUnet and myUCPH app etc.
  • Category
  • Hours
  • Lectures
  • 42
  • Preparation
  • 161
  • Exam
  • 3
  • Total
  • 206
Written
Individual

 

Feedback will be given in connection with a voluntary written assignment during the semester.

Credit
7,5 ECTS
Type of assessment
Written examination, 3 hours under invigilation
Type of assessment details
ITX-exam in the exam venues of the university.

The exam assignment is given in English and must be answered in English.
Exam registration requirements

There are no requirements that the student has to fulfill during the course to be able to sit the exam.

Aid
Without aids

No aids allowed at the written ITX-exam.

Marking scale
7-point grading scale
Censorship form
No external censorship
at the written exam.
Exam period

 

Exam information:

The exact time and place will be available in Digital Exam from the middle of the semester. In special cases decided by the Department, the exam can change to another place, type, day and/or time than announced. 

More information about examination, rules, aids etc. at Master(UK) and Master(DK).

 

Re-exam

Same as the ordinary exam. 

Internal assessment. 

 

Exam information:

Exact type, day, time and place: See Digital Exam in August. In special cases decided by the Department, the exam can change to another place, type, day and/or time than announced.

More info: Master(UK) and Master(DK). 

Criteria for exam assesment

Students are assessed on the extent to which they master the learning outcome for the course.

 

In order to obtain the top grade “12”, the student must with no or only a few minor weaknesses be able to demonstrate an excellent performance displaying a high level of command of all aspects of the relevant material and can make use of the knowledge, skills and competencies listed in the learning outcomes.

 

In order to obtain the passing grade “02”, the student must in a satisfactory way be able to demonstrate a minimal acceptable level of  the knowledge, skills and competencies listed in the learning outcomes.