EC/FI 380 - Banking and Financial Intermediation

What are the economic functions of financial intermediaries (FIs), and in particular, of commercial banks? The main objective of this course is to address this question by analyzing the imperfections that affect the smooth functioning of financial markets. These imperfections explain why and how FIs play a special role in the economy. 

The course focuses on credit intermediation, one of the main functions of banks and other FIs. Our analysis of credit intermediation will require students to develop an in-depth understanding of on-balance and off-balance sheet lending as well as of the management of interest risk and credit risk. Students will also become familiar with the basic concepts of market-based interest risk and credit risk hedging strategies. This course concludes with a discussion of commercial banks.