In all countries, financially advanced or otherwise, financial intermediation is mostly carried out by banks. The course aims at explaining the need for financial intermediation and functions of banks by emphasizing the importance of uncertainty and developing an asymmetric information theory of financial intermediation. In the first part of the course, the focus will be on the bank as an institution. Industrial organization approach to banking and lender/borrower relation are examined. The second part deals with the macroeconomic consequences market imperfections, i.e. financial crisis. The justification for public intervention to deal with the problems caused by the inherent instability of the banking system and globalization are discussed in the last part.
SU Credits : 3
ECTS Credit : 6
Undergraduate level ECON 204 Minimum Grade of D