This course introduces the microeconomic foundations of modern banking and financial intermediation. We emphasize the presentation of models under asymmetric information. In this context, we present models that contemplate the incentives in debt contracts, the decision-making of bank managers, and the role of regulatory authorities for financial stability.

With the successful completion of the course, students will be sufficiently capable to

• understand and apply the microeconomic analysis in the context f credit, and especially of banking markets
• assess the micro-foundations of banking markets in a strategic context
• understand the developments in the modern banking environment