Introduction to Banking and Banking Regulation
Module: AF2037
Banks, as financial intermediaries, play an important role in the financial system, and ensuring they are sound and well run is key to avoid financial crises and their negative consequences. In this module, you will learn how modern banks are structured, what services they provide, how their financial statements look like, and the key risks they face. You will also learn about off-balance sheet activities of banks, such as securitisation and derivatives and the role these activities in the Great Financial Crisis.
In the second half of the module, you will learn about the functions of central banks, including monetary policy and financial stability. You will understand why regulation is needed, and how the main risks arising from bank business models necessitate their regulation and supervision. You will also learn about the components of banking regulation and how the attempt to reduce the risks of financial crises.