The Micro and Macroeconomics of Banking
Deadline for registration: 24 May, 2016
The U.S. Great Recession has pointed to the importance of the banking sector in originating, amplifying, and propagating financial shocks to the real side of the economy. In response to the downturn, there has been a great deal of new regulation to mitigate the effects of future financial crises. Quantitative structural models of the banking sector that avoid the Lucas critique are critical to conduct counterfactual policy to evaluate the effects of new regulation. One important factor in the effects of policy is banking industry market structure and competition among banks of different sizes. Regulation itself may effect market structure and the distribution of bank size. Understanding regulatory arbitrage and how competitiveness of the banking sector varies with changes in regulation is critical to understand the health of the financial system.
Why this course
This course studies the banking industry from a micro and macro perspective. After examining aggregate and cross-sectional banking data facts (while we focus on the U.S. there is a budding research agenda for researchers to develop similar facts for other countries), we introduce simple models of banking to try to understand that data. These simple banking models include roles for delegated monitoring, maturity transformation, relationship lending, networks, and strategic interactions among banks. We then study dynamic stochastic models of banking both at the industry and general equilibrium levels. Finally we consider the effect of ex-ante micro- and macro- prudential regulatory policies and ex-post bailout policies.
How will the course work?The course will be taught in lecture format. Computer exercises will be used to review the material.
Who is the training for?Financial stability and research department of Central Banks, Ph. D. students, private sector economists.
What do you need to know to follow this courseFamiliarity with Matlab and Dynare is highly suggested.
Required material for attending the courseParticipants will need to bring their personal laptop with programs STATA, MATLAB and DYNARE (free download from the web).
What you’ll learnAt the end of this course you will:
- Have a toolkit of quantitative structural banking models to conduct policy and stress test analyses
- Examine problems at the intersection of finance, industrial organization and macroeocnomics
Meet the course instructorDean Corbae is US Bank Professor of Finance at the Wisconsin School of Business, as well as faculty in the Economics department at the University of Wisconsin. Corbae has been a visiting professor at the Wharton School of the University of Pennsylvania and Cambridge University, as well as a Visiting Scholar at numerous Federal Reserve Banks. He is a research associate of the National Bureau of Economic Research. He has held editorial positions at the Journal of Economic Theory and the International Economic Review, among others. Corbae’s research in macroeconomics and econometrics has been published in Econometrica, the Journal of Political Economy, and others. His current research projects focus on consumer credit and bankruptcy, foreclosures, and banking industry dynamics.
1500 € – Public Authorities (e.g. National Competent Authorities, Central Banks) and European Institutions*
2000€ – Private Sector
850€ – Students (with certificate of studies)**
* In case of registration of 2 participants from the same institution a third person may attend for free. For more details, please contact firstname.lastname@example.org
** Limited places are available, please apply through the registration form.
Practical information for the registered participants
Participants are requested to bring their own laptop.
On arrival, you will be provided with temporary wi-fi access for the whole duration of the course.
GENERAL INFORMATION ON LOCAL TRANSPORT
From the airport
Florence airport is located 8km from the centre, approx. 30 minutes by taxi or bus. Taxis can normally be found outside the arrival terminal. The airport is also connected to the main railway station by a shuttle bus that leaves every 30 minutes (on the hour and half-hour) and takes 25 minutes. Tickets are available on board for € 6.00.
+39 055 4390 / +39 055 4242
From Florence Airport Peretola to downtown Firenze about 25/30 minutes (approx. 25-30 €)
From Florence central railway station Santa Maria Novella to the European University Institute: about 20-30 minutes (approx. 30-35 €)
From the A1 Milano-Napoli (Autostrada del Sole), take the Firenze Sud exit and follow directions to the centre of town/Stadio. Follow Stadio then Fiesole. San Domenico is on the main road to Fiesole.
From Piazza San Marco, take bus no. 7 in the direction ‘Fiesole’ and get off at ‘San Domenico 1 – Università Europea’. For bus routes and timetables consult: http://goo.gl/Ydj8K
To reach Badia Fiesolana from San Domenico cross the road, walk 50 metres in the direction of Fiesole (the same direction as the bus). Then take the first road on the left, opposite the church and cemetery (Via dei Roccettini). Walk for about 100 mt and you will find Badia Fiesolana is on your left.