Economics of Banking (F)
The course covers two aspects of the topic, microeconomics of banking and risk management. In the microeconomics part, teaching starts with discussing key competences of banks, proceeds to fundamental aspects of banking such as the loan contract and credit rationing, discusses liquidity problems and bank runs, and ends up with a treatment of bank regulation involving the roles of central banks, deposit insurance and financial supervision authorities. In the risk management part, the course covers the basics of risk management in banks, measurement of risk, and then discusses the different types of risk occurring in banking, namely liquidity risk, interest rate risk, market risk, credit risk, and operational risk. For each of the risk types, the course covers the measurement of risk as well as methods for reducing risk.
- Introduction: Key competences of banks
- Types of financial intermediation; basics of risk management
- The loan contract; interest rate risk
- Rationing in the credit market; market risk
- Securitization and shadow banking
- Credit risk
- Payments and its impact on banking
- Competition and risk taking
- Irregularities in banking
- Liquidity crises and bank runs; operational risk
- Deposit insurance
- Lenders of last resort
- Reorganizing and closing banks
- The Basel regulations
in Economics – elective course
The course is part of the Financial line at the MSc programme in Economics, symbolized by ‘F’.
The PhD Programme in Economics at the Department of Economics:
- The course is an elective course with research module. PhD students must contact the study administration AND the lecturer in order to register for the research module and write the research assignment.
After completing the course the student is expected to be able to:
Identify and assess the roles of banks in the financial sector, related to the basic problems of asymmetric information in its different forms.
Account for the basic principles of risk management and of risk measures, as well as the basic organisation of risk management in a bank.
Discuss the causes of bank runs and bank panics.
Define the different institutional setups designed for coping with bank runs.
Master relevant theories and analyze problems related to financial intermediation.
Evaluate alternative methods for managing risk in banks.
Give suggestions for suitable regulation in the financial sector.
Assess properties of credit markets, designing improvements of the contract structure,
Give advice for the regulation of financial intermediation and for the prevention of financial crises.
Restrictions due to pandemic crisis:
The teaching in this course may be changed to be taught either fully or partly online due to a pandemic crisis like COVID-19. In case of changes and further information, please read the study messages in KUnet or the announcements in the course room on Absalon (for enrolled students).
H.Keiding, Economics of Banking, Palgrave-Macmillan 2015.
There are no recommended academic qualifications other than the requirements to the study programme.
2 hours lectures 1 to 2 times a week from week 6 to 20.
The overall schema for the Master can be seen at KUnet:
MSc in Economics => "courses and teaching" => "Planning and overview" => "Your timetable"
KA i Økonomi => "Kurser og undervisning" => "Planlægning og overblik" => "Dit skema"
Timetable and venue:
To see the time and location of lectures please press the link/links under "Timetable"/"Se skema" at the right side of this page (F means Spring).
You can find the similar information in English at
-Select Department: “2200-Økonomisk Institut” (and wait for respond)
-Select Module:: “2200-F22; [Name of course]”
-Select Report Type: “List – Weekdays”
-Select Period: “Forår/Spring – Week 5-30”
Press: “ View Timetable”
Please be aware:
- The schedule of the lectures can be changed without the participants´ acceptance. If this happens you can see the new schedule in your personal timetable at KUnet, in the app myUCPH and through the links in the right side and the link above.
- It is the students´s own responsibility continuously throughout the study to stay informed about their study, their teaching, their schedule, their exams etc. through the curriculum of the study programme, the study pages at KUnet, student messages, the course description, the Digital Exam portal, Absalon, the personal schema at KUnet and myUCPH app etc.
Feedback will be given in connection with a voluntary written assignment during the semester.
Foreign students and guests: Information about admission requirements, application, tuition fee, registration at Study Economics.
Please read the curriculum before enrolment.
Gæste- og enkelfagsstuderende: Tilmelding via Uddannelse i Økonomi.
- 7,5 ECTS
- Type of assessment
Written examination, 3 hours under invigilationas an ITX-exam in the exam venues of the university.
The exam assignment is given in English and must be answered in English.
Changes due to Coronavirus:
In the event that COVID-19 restrictions may affect the conduction of the ITX-exams, the written exam and the re-sit exam will be changed to a 3 hours take-home exam with all aids. If done so, the changes will be announced in study messages at KUnet and in the Digital Exam portal.
The take-home exam is an individual exam and it is not allowed to communicate with any one about the exam assignment nor the solution at all. It is also prohibited to distribute data and other information at all. If this or alike actions happens, it will be regarded as cheating and plagiarism.
No aids allowed at the written ITX-exam.
If the ITX-exam is changed to a take-home exam due to COVID-19, the written take-home exam will be with all aids.
Information about allowed aids for the re-examination, please go to the section "Re-exam".
- Marking scale
- 7-point grading scale
- Censorship form
- No external censorship
at the written exam.
The written ITX-exam may be chosen for external assessment by random sample.
An oral re-examination may be with external assessment.
Criteria for exam assessment
Students are assessed on the extent to which they master the learning outcome for the course.
In order to obtain the top grade “12”, the student must with no or only a few minor weaknesses be able to demonstrate an excellent performance displaying a high level of command of all aspects of the relevant material and can make use of the knowledge, skills and competencies listed in the learning outcomes.
In order to obtain the passing grade “02”, the student must in a satisfactory way be able to demonstrate a minimal acceptable level of the knowledge, skills and competencies listed in the learning outcomes.
Single subject courses (day)
- Course number
- 7,5 ECTS
- Programme level
- Full Degree Master
- Go to 'Signup' for
information about registration and enrollment.
Information about admission and tuition fee: Master and Exchange Programme, credit students and guest students (Open University)
- For teaching: Go to 'Remarks'.
- For exam and re-sits: Go to 'Exam'.
- Department of Economics, Study Council
- Department of Economics
- Faculty of Social Sciences
- Hans Keiding (12-546d7a7f3a57717570757a734c716f7b7a3a77813a7077)
See ‘Course Coordinators’
Please read "Remarks" regarding the schedule of the teaching.
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