Financial Economics focuses on the origin of risks in financial markets and the role that asymmetric information plays in explaining failures in these markets. The main topics covered, both from a theoretical and empirical point of view, are: principles of corporate governance; formation and structure of credit agreements in the event of information asymmetry; credit rationing; role and functions of financial intermediaries in the economic system; stability and competition in the banking sector; macroeconomic shocks and banks; capital requirements in banks as instruments of prudential regulation (Basel requirements); bank crisis resolution.
At the end of the course, the student will be able to understand the context in which agents participating in the direct credit and bank credit market operate. Furthermore, he will be able to measure the risk associated with the main financial contracts and the function of prudential regulation.