The course aims at describing the structure of financial intermediaries, and in particular banks. We begin by defining the various types of financial intermediaries, their typical balance sheet and risks they face. We next turn to an analysis of models for quantifying credit risk. We outline the various approaches that are used by banks to measure the risk of their loan portfolios. We discuss how to manage these risks using credit derivatives and securitization, and their pricing. We also look at credit rating agencies. We then describe the type of interest rate and liquidity risk that are typically faced by banks. Finally, we present the regulatory framework and discuss the 2007/2009 financial crisis and sovereign and Eurozone risk.
Lecture notes will be made available on the course website. This can be reached at http://www.icorsi.ch/ After the login, follow Courses>USI>Corsi Master Eco> Financial Intermediation 2017. Additional readings and exercises will eventually be posted as well. You are responsible for all material and announcements there posted.
The textbook for the course is A. Saunders and M. Cornett, Financial Institution Management, 8th International Edition, McGraw Hill. Lecture notes will also draw from F. Mishkin and S. Eakins, Financial Markets and Institutions, 2015, Pearson Ed.