FIE448 Banking and Fintech

• Topics

  This is a master-level course consisting of the basic microeconomic theory of banking, financial crisis, financial innovation, and FinTech, as well as discussions of practical issues related to these theories.

  • Introduction: Banking, financial crisis, financial innovation and FinTech.
  • The role of central banks. Introduction to monetary policies: open market operations, quantitative easing, the lender of the last resort, etc.
  • The role of financial markets: Why do we need financial markets? The role of financial markets and transaction costs in financial markets.
  • Existence of banks: Why do banks exist? Functions of banks; The model of bank loans; agency problems (adverse selection and moral hazard) and the design of loan contracts.
  • Financial innovation: The underlying theory of certain financial innovation. How did securitization contribute to the 2008-2009 financial crisis?
  • Bank runs, financial crisis and regulation: Why can bank runs occur and how to stop them? What is special in the 2008-2009 financial crisis? Introduction to banking risk management and regulation.
  • FinTech: The new developments in the banking sector: Blockchain, cryptocurrencies, P2P lending, crowdfunding, digital payment, etc.

• Learning outcome

  After this course, students are expected to

  Knowledge:

  • Understand the important economic roles of financial intermediaries, such as the role of commercial banks, investment banks and other financial intermediaries, both in theory and in practice.
  • Understand the important economic roles of central banks.
  • Understand the main businesses and products of banks, especially those of commercial banks, both in theory and in practice. These products reflect the economical roles of banks and are linked to various risks of banks.
  • Understand recent financial innovation in the banking sector and their underlying motives. Know how securitization "created" the 2008-2009 financial crisis.
  • Know the new developments in the banking sector, such as fintech (including blockchain technology, cryptocurrencies, P2P lending, crowdfunding, digital payment, etc.), and be aware of the main fintech advances and their motives.

  Skills:

  • Using the concepts, methods and knowledge that are introduced in the course, being able to analyze and write professional reports, articles and business cases. about banking, financial crises, financial innovation, and new developments in fintech.
  • Develop good analytical skills and learn to work independently with advanced problems in banking.

  General Competence:

  • Be able to understand economic and finance models and apply these models to solve practical issues.
  • Be capable of applying new knowledge throughout your career.

• Teaching

  Lectures, class room discussions, problem solving exercises.

• Compulsory Activity

  Two group assignments. Each group should have 3-4 members, and hand in one solution per group.

• Assessment

  Assessment method with two elements

  (1) Case study (in groups each with 3-4 members): 30%

  (2) Three-hour individual school exam: 70%

  Both elements are only given in English and can be answered in English or Norwegian

• Grading Scale

  A-F

• Computer tools

  none

• Literature

  The course material consists of lecture slides, lecture notes, and selected articles from academic journals.

• Permitted Support Material

  Calculator

  One bilingual dictionary (Category I)

  All in accordance with Supplementary provisions to the Regulations for Full-time Study Programmes at the Norwegian School of Economics Ch.4 Permitted support materialhttps://www.nhh.no/en/for-students/regulations/https://www.nhh.no/en/for-students/regulations/and https://www.nhh.no/en/for-students/examinations/examination-support-materials/https://www.nhh.no/en/for-students/examinations/examination-support-materials/