AØKA08069U Economics of Banking (F)
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. PhD students must contact the study administration AND the lecturer in order to register for the research module and write the research assignment.
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.
- 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
After completing the course the student is expected to be able to:
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.
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.
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.
We use the textbook
H.Keiding, Economics of Banking, Palgrave-Macmillan 2015.
In case of a pandemic like Corona the teaching in this course may be changed to be taught either fully or partly online. For further information, see the course room on Absalon.
2 hours lectures 1 to 2 times a week from week 6 to 20 (except holidays).
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).
You can find the similar information in English at
-Select Department: “2200-Økonomisk Institut” (and wait for respond)
-Select Module:: “2200-F21; [Name of course]”
-Select Report Type: “List – Weekdays”
-Select Period: “Forår/Spring – Week 5-30”
Press: “ View Timetable”
Feedback will be given in connection with a voluntary written assignment during the semester.
For gæste- og enkelfagsstuderende: Tilmelding via Uddannelse i Økonomi.
- 7,5 ECTS
- Type of assessment
- Written examination, 3 hours under invigilationin the exam venues of the university.
The exam assignment is given in English and must be answered in English.
In case of a pandemic like Corona the date, time and type of exam as well as use of aids may be changed. Any further information will be announced here in the Exam section.
- Exam registration requirements
There are no requirements that the student has to fulfill during the course to be able to sit the exam.
- Without aids
for the written exam.
In case of an oral reexam, please go to the section "Reexam" for further information about allowed aids.
- Marking scale
- 7-point grading scale
- Censorship form
- No external censorship
for the written exam. The exam may be chosen for external censorship by random check.
- Exam period
The regular exam takes place:
31 May 2021
The exact time and room will be available in the Digital Exam from the middle of the semester.
In special cases, the exam date can be changed to another time and day.
The written reexam take place in the exam venues of the university:
24 August 2021
NOTE: If only few students register for the written re-exam, the re-exam might change to a 20 minutes oral examination with 20 minutes preparation time.
All written aids allowed during the preparation time, no aids allowed during the examination.
If changed to an oral re-exam, the exam date, time and place might change as well. The Examination's Office then informs the students by KU e-mail.
Info is available in Digital Exam early August.
Criteria for exam assesment
Students are assessed on the extent to which they master the learning outcome for the course.
To receive the top grade, 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.