Unit information: Principles of Financial Intermediation in 2020/21

Unit name	Principles of Financial Intermediation
Unit code	EFIMM0054
Credit points	15
Level of study	M/7
Teaching block(s)	Teaching Block 2 (weeks 13 - 24)
Unit director	Professor. Klaus Schaeck
Open unit status	Not open
Pre-requisites	None
Co-requisites	Specifically for students studying on the MSc in Economics and Finance - if taking this unit, you can not take: EFIMM0006 - Banking OR EFIMM0053 - Banking Regulation and Financial Stability OR EFIMM0052 - Banking Management and Risk Management
School/department	School of Accounting and Finance - Business School
Faculty	Faculty of Social Sciences and Law

Description including Unit Aims

This module covers 10 key themes in banking. It is based on seminal academic papers written on why banks exist, how banks create liquidity, the role of banks for economic growth, bank-borrower interaction, relationship lending, loan pricing, the role of international banking, industrial organization of banking systems, how regulation affects bank behaviour, and how bailouts affect structure and performance of banks and banking markets. The module illustrates the use of applied microeconometric techniques in the context of banking and therefore also benefits students in the choice and development of their dissertation topic.

Intended Learning Outcomes

On completion of this unit students should be able to:

1. Demonstrate a comprehension of key topics in the empirical banking literature;
2. Demonstrate a critical awareness of the crucial role of banks for the economy;
3. Describe and critically evaluate the interaction of a bank with borrowers and analyse the effect on loan pricing;
4. Critically reflect on and discuss the role of the government, regulation, and government interventions into financial systems;
5. Demonstrate the ability to appropriately deploy microeconometric techniques to answer research questions in banking;
6. Critically evaluate and appraise current and future directions for research in banking.
7. Demonstrate a comprehension of the economic thinking required and the methodological skills necessary for furnishing dissertations on research projects in banking.

Teaching Information

Teaching will be delivered through a combination of synchronous and asynchronous sessions including lectures, tutorials, drop-in sessions, discussion boards and other online learning opportunities

Assessment Information

This unit will be assessed by group coursework 30% and exam 70%

Reading and References

The core text for this module is Degryse, Kim, and Ongena (2009) Microeconometrics of Banking: Methods, applications, and results. Oxford University Press. The core text is supplemented with references to the academic literature in the slides that will accompany each lecture. The papers in the journals from the reading list are essential reading material. The academic literature will be drawn from the following journals: Quarterly Journal of Economics; American Economic Review; Journal of Finance; Journal of Financial Economics; Review of Financial Studies; Journal of Financial and Quantitative Analysis; Journal of Financial Intermediation; and the Journal of Money, Credit, and Banking. Students are expected to have obtained and read a copy of each chapter and/or paper in the essential reading list prior to each lecture or workshop.