Course content

Credit markets,-the risk and term structure of interest rates. Banks,-the economics of financial intermediation; funding and risk; liquidity and solvency; conflicts of interest in banks. Regulating the financial system – runs, panics and crises; systemic risk; the government safety net; supervision of banks. Monetary policy and financial markets – the transmission mechanism; liquidity policy.

Learning outcome

Students will gain knowledge about the economic significance of banks and credit markets. The course should also help students understand why and how banking crises occur, and the trade-offs faced by governments in regulating banks and the financial system.

Learning methods and activities

2 hours of lectures every week, and 2 hours of practical assignments every second week.
Compulsory activity: 1 approved term paper. The term paper can be written as a joint project by up to four students.

Compulsory assignments

• One approved term paper.

Recommended previous knowledge

Introductory courses in microeconomics and macroeconomics; mathematics equivalent to SØK1010.

Required previous knowledge

None.

Course materials

Announced at the beginning of the term.