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					20264 Comparative financial systems
Prof. Marco Onado
Academic Year 2010-2011

The course main objectives can be summarised as follows:

      Review the conceptual framework for analysing the role of financial systems and comparing them across countries and over time, in
       particular looking at the main channels of intermediation: banks vs financial markets.
      Discuss the current problems of the international financial system. In particular, a large section will be devoted to the causes and
       implications of the crisis that began in June 2007 and which will shape the evolution of the global financial system in the foreseeable
      Look at the various issues both at the macro and the micro level: from this point of view we will discuss the main implications for the
       business models of the main global intermediaries: universal banks vs. local banks; asset managers etc. These topics will also be
       discussed in special guest lectures with international experts.

The course aims to aid students to identify and discuss the main problems that financial intermediaries face when operating in different economic
and historical conditions, instead of analyzing country by country the institutional differences that still exist. We will try to answer questions such
as: what are the main characteristics of a financial system and how can they be measured? Why structural characteristics differ across countries
and over time? Why some financial systems (e.g. the US and the UK) were hit so hardly by the crisis, while others (e.g: Italy and Spain) are still
almost unscathed? What is the outlook at the beginning of 2011 for the main European banks? What does that mean from the point of view of
strategic decisions of financial intermediaries which want to be international or global?

The course is divided in four parts, devoted to:

      General issues (role of the financial system; literature on comparing financial systems);
      Anatomy of a crisis (the effects on main financial systems and the main causes of the crisis);
      The main weaknesses from a macro and a micro point of view;
      The strategic issues for the main global players.

In each lecture a large room is devoted to real and current problems. In the 2006-2007 course for instance, one of the first lectures was devoted to
discuss the dangers to financial stability deriving from the extraordinary increase of debt in general and American households’ debt in particular.
In the past year, we have discussed almost day by day the rescue of the main global banks and the evolution of the crisis.

To reach the general objectives, attendance is very important and an active attitude on the part of students will be encouraged.
Students are strongly advised to get familiar with the main international newspapers and magazines such as: “The Economist”, “Financial
Times”, “The Wall Street Journal”.

Valuation will be based on a final written test: 6 multiple choice questions (2 point each); 2 open questions (10 points each); 30cum laude if
sum>30 Time: 70 minutes. Individual essays (as a part or alternative to the final test) can be assigned to attending students.
Questions will concern topics dealt with in documents listed in the “reference” column below and in the lectures’ slides. Documents listed under
the “documents for further analysis” can be helpful to understand the slides. All documents will be available on the weblearning space You@B,
teacher’s personal page. Also links to documents for further analysis will be available.

Lectures will be held on Monday (14.30-16.00, Classroom 11) and Wednesday (8.45-10.15, Classroom 23).

Marco Onado is available on Wednesday 10.30-12.00, 1 via Roentgen, 2nd floor, Room D2-09 (ext. 5865) and at

Course schedule

                general theme                      Topic                                 Reference                     Documents for further analysis
#     date
                                     The functions of a financial system.
      Mon,                           The main data on the size and
     Feb 14                          composition of the global financial
      Wed,                           Comparing financial approach: a
2                                    functional perspective
     Feb 16
                                     Market-based vs bank-based             Notes on functions
     Mon.     Financial structure:                                          Adrian-Shin New financial intermediation
3                                    systems and securitisation
     Feb21      general issues
                                     Household savings and debt                                                      McKinsey Global Institute, Farewell to
      Wed                                                                                                            cheap capital? The implications of
     Feb 23                                                                                                          long-term shifts in global saving and
      Mon.                           Banking structures with particular                                              ECB Banking structures
5                                    reference to the EU
     Feb 28
                                     The global financial imbalances:
     Wed                             the major countries’ current
     Mar 2                           account deficits and sectoral
                                     financial accounts
     Mon                             The making of a series of financial Bank of England, Global imbalances and Bank of England, Credit booms
7                                    bubbles: 1997-2007
     Mar 7                                                                  the financial
     Wed                             The shadow banking system              Crisis, Quarterly Bulletin 2009 Q3       Tucker, Shadow banking system
8                                                                                                                    FRBY, Shadow banking
     Mar 9                                                                  M.King, Sudoku for economists
              Anatomy of a crisis
                                     The bursting of the bubble and “the IMF Global Financial Stability Report,      Gary Gorton: Slapped by the Invisible
9                                    black swan”                            October 2010, Chapter 2                  Hand; Taylor-Willias, A Black Swan in
     Mar 14
                                                                                                                     the Money Market;
    Wed                              The liquidity problem and the
10                                   funding of banks
   Mar 16
    Mon                              Lessons to be learnt in liquidity risk                                          IMF Global Financial Stability Report,
11 Mar 21                            management                                                                      October 2010

      Wed                             The crisis spreads from the banks
12                                    to the sovereign
     Mar 23
                                      The weaknesses of the                                                         Aschcraft-Schuremann Understanding
                                      securitisation process                                                        the securitisation of subprime mortgage
      Mon                                                                                                           credit
     mar 28                                                                                                         See also IMF GFSR oct 10 on the role
                                                                                                                    of rating agencies
                                      What do banks do? Why do credit     Adair Turner
                                      booms and bust occur?               Paul Woolley
      Wed                                                                 Both in Future of finance
     Mar 30                                                     
              The main weaknesses:
                micro and macro    What is the contribution of the        Andrew Haldane in the future of finance   Fender Mitchell, The future of
                                   financial system: miracle or                                                     securitisation: how to align incentives?,
      Wed                          mirage?                                                                          BIS QR 09
     Apr 27                                                                                                         Bank of England, Financial Stability
                                                                                                                    Review December 2009, Box 1
                                      The big regulatary arbitrage
                                      Guest lecture
     Mon                              Antonio Foglia
     May 2

     Wed                              Large Complex Financial
17                                    Institutions and the crisis
     May 4
                                      LCFI and systemic risk: the need
     Mon                              for a macro level of supervision
18                                                                        Excerpts from Imf, Ecb, BoE and Bank
     May 9
                                                                          of Italy Stability reports
                The crisis and the    Beyond Roe
    Wed        strategic issues for
19             main global players
   May 11                                                                 Ecb, Beyond Roe
                                      The role of hedge funds                                                       The new Basel agreement
    Mon                               Guest lecture
20 May 16                             Mr. Luca Anzola
                                      Gestielle Alternative

                                     The problem of proprietary trading                                                Oecd, The elephant in the room: what
      Wed                                                                                                              should banks do
     May 18                                                                                                            FSA Discussion paper
                                     The future of Asset management
                                     Guest lecture
                                     Mr. Giordano Lombardo
      Mon                            Pioneer Investments
     May 23

    Wed                              Spring 2011: Where are we now?       Discussion of the lastest reports from the
   May 25                                                                 Imf and other international bodies
   Mon                               Wrap-up session
   May 30

NB: full reference to the documents listed in the last two columns above will be provided in the lectures’ slides


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