The first four sessions aim to establish an understanding of banks' behaviour and balance sheets, including capital structure, lending decisions and attitudes to risk. These sessions also study the banks’ role in transmitting the monetary policy decisions of the central bank, ie the choice of official interest rates and ‘quantitative easing’. This enables a discussion of the effects of monetary and fiscal policy on the main macroeconomic variables. Session four looks at the origins of the financial crisis and the policy responses.
Sessions five to seven cover developments in international banking regulation before and since the crisis. This includes the regulation of capital and liquidity under the Basel accords, the attempts to address the moral hazard and the ‘too-large-to fail’ problems, and the influence of regulation on the shadow banking industry.
The final three sessions study banking and monetary policy in the international context, with a particular focus on problems in the eurozone and the operation of the Eurosystem of central banks.
In this course, the treatment will generally be non-technical and will be based on developing an understanding of institutional practices and their implications.