This course presents the concepts, principles and models underlying prudential regulation of banks and studies how they have to be modified to deal with systemic risk and contagion. It discusses the use of lenders of last resort as a way to reduce systemic risks, contagion and transmission of balance sheet imbalances and other measures for bank resolution that shield the banking system from generalized crises and runs.
The course will feature lectures and applications to real life situations.
You will learn the objectives of macro-prudential regulation.
You will learn how to design aggregate models of financial stability.
You will get an understanding of recent academic research on systemic risk.