EC906-7-SP-CO:
Economics of Banking
2023/24
Economics
Colchester Campus
Spring
Postgraduate: Level 7
Current
Monday 15 January 2024
Friday 22 March 2024
20
23 October 2023
Requisites for this module
(none)
(none)
(none)
(none)
(none)
MA L11312 Financial Economics,
MSC L12012 Money and Banking,
MSC L120UH Money and Banking
This module is designed to introduce core economics reasoning about the fundamental businesses of commercial banking and investment banking. Those of the former can be classified roughly into two categories, financial intermediation and money creation, while those of the latter are mainly concerned with security issuance and merger and acquisition.
For each of them, as a viable business, the following questions naturally arise: What and how is the value added by this business? H is it provided in terms of contractual arrangements? What are the implications of these contractual arrangements for the banking industry and the whole economy?
The aim of this module is:
- To provide students with an understanding of the economics behind the core services which the banking industry provides.
By the end of this module, students will be expected to be able to:
- Gain knowledge that will help them find a job in the banking industry, and, more broadly, in the financial sector.
This module will focus on economics reasoning and not be detailed in the practical side of the banking businesses, of which more material is provided in the EBS module BE610, Introduction to Banking. Students are encourage to audit, if not register, this module, besides to read the Economist weekly and the Financial Times most days. Moreover, students will find google and wiki useful to check the meaning of unfamiliar terminologies.
This module will be delivered via:
- One 2-hour lecture per week.
- One 1-hour class per fortnight.
Lecture notes and supporting materials can be accessed via the course material repository. Problem sets will be posted in the course material repository on a bi-weekly basis. Students are expected to complete them for class.
Feedback for this module will occur through class meetings where we will go over the answers to problem sets and where you will be able to ask questions about your own method of solution; answers that will be posted on the website for the module that will give you written guidance on the appropriate method to approach the problems, assignments, and tests; and office hours where any additional questions can be addressed. You should be sure that you use these methods to understand how to improve your own performance.
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Mishkin, F.S. (2022b)
The economics of money, banking and financial markets. Thirteenth edition. Harlow, England: Pearson. Available at:
https://app.kortext.com/Shibboleth.sso/Login?entityID=https://idp0.essex.ac.uk/shibboleth&target=https://app.kortext.com/borrow/962603.
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Constantinides, G.M.
et al. (2003b)
Handbook of the economics of finance. Amsterdam: Elsevier/North-Holland. Available at:
https://www.sciencedirect.com/handbook/handbook-of-the-economics-of-finance.
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Morrison, Alan D; Wang, Tianxi (no date) ‘Bank liquidity, bank lending, and “bad bank” policies’,
Economics Discussion Papers [Preprint]. Available at:
https://repository.essex.ac.uk/29501/.
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Diamond, D.W. and Dybvig, P.H. (1983) ‘Bank Runs, Deposit Insurance, and Liquidity’,
Journal of Political Economy, 91(3), pp. 401–419. Available at:
https://doi.org/10.1086/261155.
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Tianxi Wang (no date a) ‘Banks’ Wealth, Banks' Creation of Money, and Central Banking’,
59th issue (September 2019) of the International Journal of Central Banking [Preprint]. Available at:
https://www.ijcb.org/journal/ijcb19q3a4.htm.
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Michaely, R. and Womack, K.L. (1999) ‘Conflict of Interest and the Credibility of Underwriter Analyst Recommendations’,
Review of Financial Studies, 12(4), pp. 653–686. Available at:
https://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=4233910&site=ehost-live&authtype=sso&custid=s9814295.
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Barber, B.M., Lehavy, R. and Trueman, B. (2007) ‘Comparing the stock recommendation performance of investment banks and independent research firms’,
Journal of Financial Economics, 85(2), pp. 490–517. Available at:
https://doi.org/10.1016/j.jfineco.2005.09.004.
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Fang, L. and Yasuda, A. (2009) ‘The Effectiveness of Reputation as a Disciplinary Mechanism in Sell-Side Research’,
Review of Financial Studies, 22(9), pp. 3735–3777. Available at:
https://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=45342277&site=ehost-live&authtype=sso&custid=s9814295.
The above list is indicative of the essential reading for the course.
The library makes provision for all reading list items, with digital provision where possible, and these resources are shared between students.
Further reading can be obtained from this module's
reading list.
Assessment items, weightings and deadlines
| Coursework / exam |
Description |
Deadline |
Coursework weighting |
| Coursework |
Test - In person |
|
100% |
| Exam |
Main exam: In-Person, Open Book, 120 minutes during Summer (Main Period)
|
| Exam |
Reassessment Main exam: In-Person, Open Book, 120 minutes during September (Reassessment Period)
|
Exam format definitions
- Remote, open book: Your exam will take place remotely via an online learning platform. You may refer to any physical or electronic materials during the exam.
- In-person, open book: Your exam will take place on campus under invigilation. You may refer to any physical materials such as paper study notes or a textbook during the exam. Electronic devices may not be used in the exam.
- In-person, open book (restricted): The exam will take place on campus under invigilation. You may refer only to specific physical materials such as a named textbook during the exam. Permitted materials will be specified by your department. Electronic devices may not be used in the exam.
- In-person, closed book: The exam will take place on campus under invigilation. You may not refer to any physical materials or electronic devices during the exam. There may be times when a paper dictionary,
for example, may be permitted in an otherwise closed book exam. Any exceptions will be specified by your department.
Your department will provide further guidance before your exams.
Overall assessment
Reassessment
Module supervisor and teaching staff
Dr Tianxi Wang, email: wangt@essex.ac.uk.
Lectures & Classes: Dr Tianxi Wang
For further information, send an email message to pgteco@essex.ac.uk.
Yes
No
No
Dr Domenico Moro
university of Birmingham
Lecturer
Available via Moodle
Of 31 hours, 29 (93.5%) hours available to students:
0 hours not recorded due to service coverage or fault;
2 hours not recorded due to opt-out by lecturer(s), module, or event type.
Economics
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