20264 - COMPARATIVE FINANCIAL SYSTEMS
Course taught in English
Go to class group/s: 31
By applying theory to practice, the course aims to: - Review the conceptual framework for analysing the role of financial systems and comparing them across countries and over time. In particular, we discuss the main channels of intermediation (banks vs. financial markets) and the link between credit and growth. The discussion hinges on theoretical and historical analysis and look at the main characteristics of the modern financial system. - Describe the structural changes of the global financial system in the last decades (the “great leveraging”, the “securitisation and the shadow banking system”, the “new financial intermediation”) and discuss their role in the financial crisis. - Discuss the flaws in the evolution of the financial systems (the “fault lines” according to an important book of Raghuram Rajan) and their relationship with the mainstream economic theory. - Examine the reaction of different financial systems to the financial crisis and the present strengths and weaknesses of the main financial systems. As far as Europe is concerned, we examine the Euro area debt crisis and the current problems of the European banks.
The course is divided in four parts:
- The theoretical framework (role of the financial system; fundamental literature on comparing financial systems).
- Stylized facts of the evolution of the main financial systems before and particularly after the crisis.
- Anatomy of a crisis (the three waves in US and Europe; the main causes of the crisis; a focus on Europe and in particular on the link between the sovereign debt and the banking crisis).
- The crisis and the strategic issues for the future of the main banking systems: financial issues (in particular the rise of non-performing loans); economic issues (low profitability in a scenario of low interest rates).
- Identify and discuss the main problems that financial intermediaries face when operating in different economic and historical conditions. They will be able to :
- Recognize and describe the main characteristics of a financial system.
- Summarize main determinants of the global financial and the euro sovereing crises.
- Explain what is the outlook at the beginning of 2019 for the main European banks.
- Critically interpret relevant stylized facts related to main trends in banking over the last decade.
- Compare financial systems and institutions across jurisdictions and explain why structural characteristics differ across countries and over time.
- Illustrate why the impact of two crises is still so severe and comment on characteristics and main criticisms of the regulatory responses to recent crises.
- Formulate hypotheses, design and develop, as well as present and defend, individual essays.
- Face-to-face lectures
- Guest speaker's talks (in class or in distance)
- Case studies /Incidents (traditional, online)
- Individual assignments
A large part of each lecture is devoted to current problems of the main financial systems. To reach the general objectives, attendance is very important and students are strongly encouraged to an active participation. Moreover, frontal lectures are complemented with guest speakers' talks as well as individual short presentations held by students on topics agreed with the instructors. Students are advised to get familiar with the main international newspapers and magazines, such as “The Economist”, “Financial Times”, and “The Wall Street Journal”, which can be commented in class.
|Continuous assessment||Partial exams||General exam|
Attending students may choose to either take the final (general) written exam or write an individual essay, to be presented and discussed in class, on one of the proposed topics. Details on the individual essays are published on the e-learning platform.
Final (general) written exam, made of both multiple choice questions and open questions.
The course material is made of instructors' slides and a selection of academic and institutional papers. The list of the required material is detailed in the course syllabus. The course syllabus is distributed in class at the beginning of the course and made available in Bboard.