This module focuses on the conceptual foundations and key institutional details of banking and credit markets. It introduces key elements of the theory of financial intermediation, such as why banks exist, the roles of credit analysis and loan contract design, the possibility of credit rationing, the emerging use of securitisation, the specifics of deposit contracts and the role of deposit insurance. It further examines the rationale for why banks are so extensively regulated, and discusses in detail the key international regulatory framework applicable to banks in this context.

On completion of this module students should be able to:

• demonstrate systematic knowledge and understanding of key bank operations and their regulation;
• critically appraise the fragility of modern banking;
• demonstrate detailed knowledge of the international regulation framework applicable to banks.