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Aims: This module aims to enable students to apply economic principles and models to understand the role of money and banking in the economy, and to critically evaluate current debates on the role of government and the future of regulation in the banking sector.ÌýIn this course, we explore the characteristics of money and credit as well as their role for economic growth. We investigate why do banks exist and how they compete. We analyse the causes and consequences of banking crises. We assess different crisis-prevention tools that have been used and adapted over time, taking account of current debates and lessons learned from the recent financial crisis. Throughout the course, we use economic frameworks (including algebra and diagrams), empirical evidence (data and empirical results from the established literature as well as case studies) and policy developments (reports from authoritative institutions and governments’ reports) to analyse the issues. We build on the microeconomics of firm decision-making and markets from second year. We also use macroeconomic frameworks for assessing the growth impact of financial development as well as for monetary policy.Ìý

The aim of this course is to provide students with the analytical skills needed to assess decision-making, outcomes and policy tools in the retail banking sector. By the end of the course, you will be able to use your economic knowledge to independently critique problems and policy solutions in the banking sector, understanding the implications for the wider economy.

Suitable for: Final year Economics (L100 / L101 / L102), Econ/Geog (LL17), Phil/Econ (VL51) and PPE (4V86) students.

Prerequisites: ECON0013: Microeconomics and ECON0016: Macroeconomic Theory and Policy (or equivalents).

Assumed knowledge: Students coming into the module should be comfortable working with standard microeconomic and macroeconomic models, similar to those covered by BSc Economics students in second year. In particular, they should have developed an understanding of the concepts and implications of Pareto efficiency and market failures. Moreover, they should be familiar with Central Banks’ inflation targeting and money creation by commercial banks.