2.0

credits

Average Course Rating

Financial stability has become an explicit objective of central banks around the world. The design of bank regulatory requirements increasingly focuses on mitigating systemic risk as a source of financial instability. Stress testing has emerged as a major risk management tool for both supervisors and banks. This course introduces the analytical underpinnings of the current methodologies to monitor and manage systemic risks. Key learning tools are in-class workshops and case studies drawn from central bank financial stability reports, rating agencies reports, and IMF financial stability assessments. Students will acquire a detailed knowledge of (a) the role of financial frictions in determining macro-financial linkages; (b) current methodologies of systemic risk measurement; (c) micro- and macro- prudential bank regulation; and (d) the architecture of banking system-wide stress testing exercises.