Financial Intermediation I

We begin by defining the various types of financial intermediaries, their typical balance sheet and risks they face. We then describe models to quantify the amount of interest rate and liquidity risk that is typically faced by banks.
Lecture notes will be made available on the course website. The recommended textbook for the course is “Financial Institution Management” by A. Saunders and M. Cornett.

The course aims at describing the structure of financial intermediaries, and in particular banks, and the tools to manage interest rate and liquidity risk.

In presenza

Lectures will alternate between discussion of theoretical material and exercise sessions.

The course grade is based on:

80% in-class, closed-book final

20% take-home group assignment. The group must prepare a short (max 2 pages single-sided) executive summary that summarizes the analysis and addresses the questions that are given, and an Excel file with the solution. Both files should be sent no later than midnight of the due date in order to be considered for grading. The group members are also required to attend the class where the case will be discussed, when a randomly picked group will be required to present their solution.