20264 - COMPARATIVE FINANCIAL SYSTEMS

Students attending this course are expected to be familiar with the basic concepts of financial markets and institutions.

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 (e.g., 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 financial systems to macro shocks. - As far as Europe is concerned, examine the challenges faced by European banks since the euro sovereign crisis and, more recently, the outbreak of the Covid-19 pandemic and Russian-Ukrain geopolitical tensions.

The course is divided in four parts:

1. The theoretical framework (role of the financial system; fundamental literature on comparing financial systems).
2. Stylized facts of the evolution of the main financial systems before and particularly after the crisis.
3. Anatomy of a crisis (from the global financial crisis and the euro sovereign crisis to the pandemic and the geopolitical shocks).
4. Strategic issues for the future of the main banking systems: financial and economic issues.

• 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 sovereign crises.
  • Identify the main policy responses to recent crises (from the global financial crisis to the pandemic crisis)
  • Explain what is the outlook at the beginning of 2022 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  the impact of the global financial and the euro sovereign crises, and comment on the characteristics and criticisms of the regulatory responses to these crises.
• Illustrate the main consequences of recent shocks (form the Covid pandemic to geopolitical tensions) as well as the policy measures  to cope with it.
• 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

Frontal lectures are complemented with guest speakers' talks as well as individual  assignments held by students on relevant topics agreed upon 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”. Relevant news will be commented during classes.

Attending students will be given the possibility to take individual assignments and a final essay.

Not attending students can only take the final general exam. 

The course material is made of instructors' slides and a selection of academic and institutional papers. The list of the required material will be detailed at the beginning of the course and made available in Bboard.