ECON4335 – The Economics of Banking

Course content

• What distinguishes banks from other firms?
• What determines their behavior when they set interest rates and extend loans?
• What is their role in the economy?
• Why is banking subject to a long list of specific regulations?
• How is monetary policy transmitted through the banking system?
• Why do banking crises occur and what are their consequences for the macroeconomy?

These are the main questions that are raised in this course.

The course covers both micro and macro issues, but with main emphasis on the former. It has points of connection to courses on industrial organization, finance and monetary policy.

Learning outcome

Knowledge 

You should know

• the main economic theories about bank behavior, bank regulation,banking crises and the role of banks in the economy (including in the transmission mechanism of monetary policy)
• some institutional and historical facts related to the same areas

Skills

You should be able to

• analyze how banks should adapt to shifting circumstances
• how they are affected by banking regulations
• how monetary policy and bank behavior interact to affect aggregate demand and the risks affecting individual banks and the banking system as a whole

Competence

You should

• be able to read and understand project reports and journal articles that make use of the concepts and methods that are introduced in the course
• be able to make use of the course content in your own academic work, for example in analyses that are part of the master’s thesis

Admission to the course

Students admitted to study programmes at UiO must each semester register which courses and exams they wish to sign up for in Studentweb.

Students not admitted to the Master’s programme in Economics or the Master’s programme in Economic Theory and Econometrics (Samfunnsøkonomisk analyse), can apply for admission to one of our study programmes, or apply for guest student status.

Formal prerequisite knowledge

You must fulfill one of these prerequisites:

• Bachelor`s degree in Economics, or equivalent.
• ECON3220 – Microeconomics 3 / ECON4220 – Microeconomics 3, or equivalent.

Overlapping courses

• 10 credits overlap with ECON4420.

Teaching

Lectures and seminars.

Access to teaching

A student who has completed compulsory instruction and coursework and has had these approved, is not entitled to repeat that instruction and coursework. A student who has been admitted to a course, but who has not completed compulsory instruction and coursework or had these approved, is entitled to repeat that instruction and coursework, depending on available capacity.

Examination

A 3-hour written school exam.

Previous exams

Exam papers with comments from examiner

Examination support material

Students may use dictionaries at this exam. Dictionaries must be handed in before the examination. Please read regulations for dictionaries permitted at the examination.

Language of examination

The examination text is given in English, and you submit your response in English.

Grading scale

Grades are awarded on a scale from A to F, where A is the best grade and F is a fail. Read more about the grading system.

Resit an examination

If you are sick or have another valid reason for not attending the regular exam, we offer a postponed exam later in the same semester.

See also our information about resitting an exam.

More about examinations at UiO

• Use of sources and citations
• Special exam arrangements due to individual needs
• Withdrawal from an exam
• Illness at exams / postponed exams
• Explanation of grades and appeals
• Resitting an exam
• Cheating/attempted cheating

You will find further guides and resources at the web page on examinations at UiO.