March 5, 2018

Teaching Resources

The financial crisis has revealed the urgent need to better understand the determinants and consequences of cross-border banking. The section “teaching” presents therefore selected teaching material and textbooks on the topics financial crises, money, banking and finance, microeconometrics of banking, empirical research on financial markets and institutions and governance of international banking.

Moritz Schularick
Leveraged: The New Economics of Debt and Financial Fragility
The University of Chicago Press (2022)
“The 2008 financial crisis was a seismic event that laid bare how financial institutions’ instabilities can have devastating effects on societies and economies. COVID-19 brought similar financial devastation at the beginning of 2020 and once more massive interventions by central banks were needed to heed off the collapse of the financial system. All of which begs the question: why is our financial system so fragile and vulnerable that it needs government support so often?
For a generation of economists who have risen to prominence since 2008, these events have defined not only how they view financial instability, but financial markets more broadly. Leveraged brings together these voices to take stock of what we have learned about the costs and causes of financial fragility and to offer a new canonical framework for understanding it. Their message: the origins of financial instability in modern economies run deeper than the technical debates around banking regulation, countercyclical capital buffers, or living wills for financial institutions. Leveraged offers a fundamentally new picture of how financial institutions and societies coexist, for better or worse. 
The essays here mark a new starting point for research in financial economics. As we muddle through the effects of a second financial crisis in this young century, Leveraged provides a road map and a research agenda for the future.”
To order: The University of Chicago Press


Jon Danielsson
Financial Risk Forecasting
“Financial Risk Forecasting is a complete introduction to practical quantitative risk management, with a focus on market risk.  Derived from the authors teaching notes and years spent training practitioners in risk management techniques, it brings together the three key disciplines of finance, statistics and modeling (programming), to provide a thorough grounding in risk management techniques.” A set of slides offering an overview of all book chapters can be found here. The book can be ordered here.


Standford Graduate School of Business and Alfred P. Sloan Foundation
Lecture Videos, Code & Data from the Stanford Big-Data Initiative in International Macro-Finance
Large-scale data-driven research has revolutionized many fields in the social sciences. Each year, this initiative brings together 30 PhD students from schools worldwide for a three-day workshop on big data research in international macro-finance. Large-scale empirical work often presents specific challenges for PhD students entering the field. This initiative seeks to lower these barriers to entry by sharing knowledge, codes, and data as a starter-kit for new researchers. The inaugural meeting took place on August 29 – 31, 2020. Due to the Covid-19 crisis, the meeting was virtual this year. All materials, including the lecture videos, are available on this website.”


Gábor Békés, and Gábor Kézdi

Data Analysis for Business, Economics, and Policy

Cambridge University Press (2021)

“This textbook provides future data analysts with the tools, methods, and skills needed to answer data-focused, real life questions, to choose and apply appropriate methods to answer those questions, and to visualize and interpret results to support better decisions in business, economics, and public policy. Data wrangling and exploration, regression analysis, prediction with machine learning, and causal analysis are comprehensively covered, as well as when, why, and how the methods work, and how they relate to each other.”
To order: Data Analysis for Business, Economics, and Policy – Gabors Data Analysis (       

Data and code: Data and code – Gabors Data Analysis (


Co-Pierre Georg 
cogeorg / teaching 
“The repository for all his teaching material. Feel free to use it at will with attribution of source. In particular, he has uploaded the slides for his course on Financial Regulation and Fintech and Cryptocurrencies.”
To order:


Anat Admati, and Martin Hellwig 
The Bankers’ New Clothes: What’s Wrong with Banking and What to Do about It 
Princeton University Press (2014)
“What is wrong with today’s banking system? The past few years have shown that risks in banking can impose significant costs on the economy. Many claim, however, that a safer banking system would require sacrificing lending and economic growth. The Bankers’ New Clothes examines this claim and the narratives used by bankers, politicians, and regulators to rationalize the lack of reform, exposing them as invalid.
Admati and Hellwig argue we can have a safer and healthier banking system without sacrificing any of the benefits of the system, and at essentially no cost to society. They show that banks are as fragile as they are not because they must be, but because they want to be–and they get away with it. Whereas this situation benefits bankers, it distorts the economy and exposes the public to unnecessary risks. Weak regulation and ineffective enforcement allowed the buildup of risks that ushered in the financial crisis of 2007-2009. Much can be done to create a better system and prevent crises. Yet the lessons from the crisis have not been learned.”
To order: Princeton University Press


Mads Andenas, and Iris H-Y Chiu 
The Foundations and Future of Financial Regulation: Governance for Responsibility
Routledge (2014)
“Financial regulation has entered into a new era, as many foundational economic theories and policies supporting the existing infrastructure have been and are being questioned following the financial crisis. Goodhart et al’s seminal monograph “Financial Regulation: Why, How and Where Now?” (Routledge:1998) took stock of the extent of financial innovation and the maturity of the financial services industry at that time, and mapped out a new regulatory roadmap. This book offers a timely exploration of the “Why, How and Where Now” of financial regulation in the aftermath of the crisis in order to map out the future trajectory of financial regulation in an age where financial stability is being emphasised as a key regulatory objective.”
To order: Routledge


Franklin Allen, Elena Carletti, Jan Pieter Krahnen, and Marcel Tyrell 
Liquidity and Crises 
Oxford University Press (2011)
“Financial crises have been pervasive for many years. Their frequency in recent decades has been double that of the Bretton Woods Period (1945-1971) and the Gold Standard Era (1880-1993), comparable only to the period during the Great Depression. Nevertheless, the financial crisis that started in the summer of 2007 came as a great surprise to most people. What initially was seen as difficulties in the U.S. subprime mortgage market, rapidly escalated and spilled over first to financial markets and then to the real economy. The crisis changed the financial landscape worldwide and its full costs are yet to be evaluated.
One important reason for the global impact of the 2007-2009 financial crisis was massive illiquidity in combination with an extreme exposure of many financial institutions to liquidity needs and market conditions. As a consequence, many financial instruments could not be traded anymore, investors ran on a variety of financial institutions particularly in wholesale markets, financial institutions and industrial firms started to sell assets at fire sale prices to raise cash, and central banks all over the world injected huge amounts of liquidity into financial systems.
But what is liquidity and why is it so important for firms and financial institutions to command enough liquidity? This book brings together classic articles and recent contributions to this important field of research. It provides comprehensive coverage of the role of liquidity in financial crises and is divided into five parts: (i) liquidity and interbank markets; (ii) the public provision of liquidity and regulation; (iii) money, liquidity and asset prices; (iv) contagion effects; (v) financial crises and currency crises.”
To order: Oxford University Press


Franklin Allen, and Douglas Gale
Understanding Financial Crises 
Oxford University Press (2009)
“What causes a financial crisis? Can financial crises be anticipated or even avoided? What can be done to lessen their impact? Should governments and international institutions intervene? Or should financial crises be left to run their course? In the aftermath of the recent Asian financial crisis, many blamed international institutions, corruption, governments, and flawed macro and microeconomic policies not only for causing the crisis but also unnecessarily lengthening and deepening it.
Based on ten years of research, the authors develop a theoretical approach to analyzing financial crises. Beginning with a review of the history of financial crises and providing readers with the basic economic tools needed to understand the literature, the authors construct a series of increasingly sophisticated models. Throughout, the authors guide the reader through the existing theoretical and empirical literature while also building on their own theoretical approach. The text presents the modern theory of intermediation, introduces asset markets and the causes of asset price volatility, and discusses the interaction of banks and markets. The book also deals with more specialized topics, including optimal financial regulation, bubbles, and financial contagion.”
To order: Oxford University Press


Keith Bain, and Peter Howells 
The Economics of Money, Banking and Finance: A European Text
Prentice Hall Financial Times (2008)
“The Economics of Money, Banking and Finance deals with international issues affecting financial markets. Taking a strong unifying theoretical perspective it provides a unique comparative survey of financial systems in the UK, Germany, France, Italy, Scandinavia and the USA. Proven popular with students, the author’s excellent writing style ensures economic theories are clearly explained, whilst the copious use of literature and articles from the financial press give students a real-life framework to the theory.”


Franklin Allen, and Douglas Gale
Financial Crises
The International Library of Critical Writings in Economics 218, Edward Elgar Publishing Ltd. (2008)
“This important volume presents key contributions to the study of financial crises from many different areas of economics. The book offers an economic history of financial crises, empirical studies of crises in the modern era and classic works on the theory of banking crises. It also covers specialized topics, with sections on currency crises and financial contagion. Undergraduate students of money, banking, macroeconomics and financial crises alike will find this collection to be an invaluable overview of a critical area of study.”
To order: Pearson


Andrada Bilan, Hans Degryse, Kuchulain O’Flynn and Steven Ongena
Banking and Financial Markets: How Banks and Financial Technology Are Reshaping Financial Markets
Palgrave Macmillan (2019)
The traditional role of a bank was to transfer funds from savers to investors, engaging in maturity transformation, screening for borrower risk and monitoring for borrower effort in doing so. A typical loan contract was set up along six simple dimensions: the amount, the interest rate, the expected credit risk (determining both the probability of default for the loan and the expected loss given default), the required collateral, the currency, and the lending technology. However, the modern banking industry today has a broad scope, offering a range of sophisticated financial products, a wider geography — including exposure to countries with various currencies, regulation and monetary policy regimes — and an increased reliance on financial innovation and technology. These new bank business models have had repercussions on the loan contract. In particular, the main components and risks of a loan contract can now be hedged on the market, by means of interest rate swaps, foreign exchange transactions, credit default swaps and securitization. Securitized loans can often be pledged as collateral, thus facilitating new lending. And the lending technology is evolving from one-to-one meetings between a loan officer and a borrower, at a bank branch, towards potentially disruptive technologies such as peer-to-peer lending, crowd funding or digital wallet services.
This book studies the interaction between traditional and modern banking and the economic benefits and costs of this new financial ecosystem, by relying on recent empirical research in banking and finance and exploring the effects of increased financial sophistication on a particular dimension of the loan contract.
To order: Palgrave Macmillan


Richard Barwell 
Macroprudential Policy: Taming the wild gyrations of credit flows, debt stocks and asset prices
Palgrave Macmillan (2013)
“Barwell brings his considerable experience of working in both a cenral bank and the financial sector to bear in examining the practical justification for the new regime, the institutions of macroprudential policy, the instruments at policymakers’ disposal, and a discussion of how policymakers will go about discharging their responsibilities. The book also reviews the economic foundations of macroprudential policy. Conventional macroeconomics is based on assumptions that may work for the analysis of price stability and the conduct of monetary policy, but which more or less rules out the possibility of financial crises. This book introduces an alternative macroeconomics where crises can flourish, identifying the market failures which justify interventions to stabilize the system.”
To order: Palgrave Macmillan


Hans Degryse, Moshe Kim, and Steven Ongena 
Microeconometrics of Banking: Methods, Applications, and Results
Oxford University Press (2009)
“This book provides a compendium to the empirical work investigating the hypotheses generated by recent banking theory. Such a compendium is overdue. Since the publication of the The Microeconomics of Banking by Xavier Freixas and Jean Charles Rochet, work in empirical banking has further blossomed, not only in sheer volume but also in the variety of questions being tackled, datasets becoming available, and methodologies being introduced. This book follows the structure in Freixas and Rochet’s book and arranges the relevant methodologies, applications, and results according to each of their original chapters in order to have a coherent synthesis between available theory and supporting empirics. Each chapter in Microeconometrics of Banking contains a modest introduction (where possible and appropriate), a concise methodology section with one or more relevant methodologies, and several illustrative applications. In a “muscular” results section the authors summarize the main robust and seminal findings in the literature that are in the text, and provide the details of many other studies in figures and tables.”
To order: Oxford University Press


Andreas Dombret, and Otto Lucius
Institutional Stability of the Financial System: Illusion or Feasible Concept? 
Edward Elgar Publishing (2013)
“In the aftermath of the financial crisis, new financial market regulation is being implemented, and increasing numbers of countries are establishing new legislation for macroprudential oversight. Against this backdrop, this thought provoking book provides a platform for the leading international experts to discuss and encourage future debate on financial stability. The breadth and scope of the issues addressed reflect the challenge of developing and consistently implementing a coherent set of financial reforms to promote financial stability. The book advocates the development of financial reforms that are effective in striking the optimal balance between realizing the enormous benefits of efficient financial intermediation, capital allocation and risk management on the one hand, and controlling systemic risks and maintaining financial stability on the other.”
To order: Edward Elgar Publishing


Xavier Freixas, Luc Laeven, and José-Luis Peydró
Systemic risk, crises, and macroprudential regulation
MIT Press (2015)
“The recent financial crisis has shattered all standard approaches to banking regulation. Regulators now recognize that banking regulation cannot be simply based on individual financial institutions’ risks. Instead, systemic risk and macroprudential regulation have come to the forefront of the new regulatory paradigm. Yet our knowledge of these two core aspects of regulation is still limited and fragmented. This book offers a framework for understanding the reasons for the regulatory shift from a microprudential to a macroprudential approach to financial regulation. It defines systemic risk and macroprudential policy, cutting through the generalized confusion as to their meaning; contrasts macroprudential to microprudential approaches; discusses the interaction of macroprudential policy with macroeconomic policy (monetary policy in particular); and describes macroprudential tools and experiences with macroprudential regulation around the world.
The book also considers the remaining challenges for establishing effective macroprudential policy and broader issues in regulatory reform. These include the optimal size and structure of the financial system, the multiplicity of regulatory bodies in the United States, the supervision of cross-border financial institutions, and the need for international cooperation on macroprudential policies.”
To order: MIT Press


Xavier Freixas, and Jean-Charles Rochet 
Microeconomics of Banking
MIT Press (2008)
“Over the last thirty years, a new paradigm in banking theory has overturned economists’ traditional vision of the banking sector. The asymmetric information model, extremely powerful in many areas of economic theory, has proven useful in banking theory both for explaining the role of banks in the economy and for pointing out structural weaknesses in the banking sector that may justify government intervention. In the past, banking courses in most doctoral programs in economics, business, or finance focused either on management or monetary issues and their macroeconomic consequences; a microeconomic theory of banking did not exist because the Arrow-Debreu general equilibrium model of complete contingent markets (the standard reference at the time) was unable to explain the role of banks in the economy. This text provides students with a guide to the microeconomic theory of banking that has emerged since then, examining the main issues and offering the necessary tools for understanding how they have been modeled. This second edition covers the recent dramatic developments in academic research on the microeconomics of banking, with a focus on four important topics: the theory of two-sided markets and its implications for the payment card industry; “non-price competition” and its effect on the competition-stability tradeoff and the entry of new banks; the transmission of monetary policy and the effect on the functioning of the credit market of capital requirements for banks; and the theoretical foundations of banking regulation, which have been clarified, although recent developments in risk modeling have not yet led to a significant parallel development of economic modeling.”
To order: MIT Press


Jean-Pierre Fouque, and Joseph A. Langsam
Handbook on Systemic Risk
Cambridge University Press (2013)
“The Handbook on Systemic Risk, written by experts in the field, provides researchers with an introduction to the multifaceted aspects of systemic risks facing the global financial markets. The Handbook explores the multidisciplinary approaches to analyzing this risk, the data requirements for further research, and the recommendations being made to avert financial crisis. The Handbook is designed to encourage new researchers to investigate a topic with immense societal implications as well as to provide, for those already actively involved within their own academic discipline, an introduction to the research being undertaken in other disciplines. Each chapter in the Handbook will provide researchers with a superior introduction to the field and with references to more advanced research articles. It is the hope of the editors that this Handbook will stimulate greater interdisciplinary academic research on the critically important topic of systemic risk in the global financial markets.”
To order: Cambridge University Press


Jakob de Haan, Sander Oosterloo, and Dirk Schoenmaker 
Financial Markets and Institutions – A European Perspective
Cambridge University Press (2012)
“Since the first edition of this book, the world’s financial system went through its greatest crisis for a century. What made this crisis unique is that severe financial problems emerged simultaneously in many different countries and that its economic impact was felt throughout the world as a result of the increased interconnectedness of the global economy. Written for undergraduate and graduate students of finance, economics and business, the second edition of this successful textbook provides a fresh analysis of the world financial system in light of the recent financial crisis. Combining theory, empirical data and policy, it examines and explains financial markets, financial infrastructures, financial institutions and challenges in the domain of financial supervision and competition policy. This new edition features three completely new chapters, one on financial crises, a second on financial innovation, and, on the policy side, a third on the monetary policy of the European Central Bank.”
To order: Cambridge University Press


Robin Hui Huang, and Dirk Schoenmaker
Institutional Structure of Financial Regulation: Theories and International Experiences
Routledge (2014)
“In light of on-going global financial crises, the institutional structure of financial regulation is currently a subject of significant academic and practical interest. The financial crisis has called into question the adequacy of financial regulation at the national and supranational levels, and has instigated financial regulatory reforms in major markets overseas. This has included the enactment of the Dodd-Frank Act in the US, and the programme to split the Financial Services Authority in the UK. This book examines the institutional structure reform of financial regulation from a comparative perspective, exploring both fundamental theories and international experiences. The book explores the three main institutional structures of financial regulation in the world; the sectors-based model, adopted in the US, Mainland China and Hong Kong; the twin-peaks model with Australia and the Netherlands as its pioneers; and the single-regulator model as represented by the former Financial Services Authority in the UK and the Financial Services Agency in Japan.”
To order: Routledge


Joanne A. Kellermann,Jakob de Haan, and Femke de Vries
Financial Supervision in the 21st Century
Springer (2013)
“The financial crisis prompted financial supervisors to take a critical look at their own performance. The “toolkit” available to supervisors is considerably more varied than it was a few years ago. Supervision has become more forward-looking, taking into account also soft controls, such as ‘conduct and culture’, corporate governance, and business models of financial institutions. This collection of essays discusses several significant changes in supervision methods and supervisory organisations and examines what methods contribute to ‘good supervision’ and what can reasonably be expected of supervisors. The authors are experts in the field and most of them are affiliated to organisations responsible for financial supervision.”
To order: Springer


Alexander Kern, and Rahul Dhumale
Research Handbook on International Financial Regulation
Edward Elgar Publishing (2013)
“The globalisation of financial markets has attracted much academic and policymaking commentary in recent years, especially with the growing number of banking and financial crises and the current credit crisis that has threatened the stability of the global financial system. This major Research Handbook sets out to address some of the fundamental issues in financial regulation from a comparative and international perspective and to identify some of the main research themes and approaches that combine economic, legal and institutional analysis of financial markets.”
To order: Edward Elgar Publishing


Damodaran Krishnamurti, and Yejin Carol Lee
Macroprudential Policy Framework- A practice guide 
World Bank (2014)
“This practice guide is primarily intended as a reference and guidance for emerging market economies in their migration to a formal macroprudential policy framework. It relies largely on the existing wisdom, knowledge, and experience and was written with the intention of assisting policy makers (and the World Bank staff working with these authorities) in the implementation of macroprudential policy frameworks in jurisdictions with the following characteristics representative of a typical emerging market and developing economy: 1) a simple and bank-dominated financial system where other financial sector segments are much smaller, but growing; 2) banking supervision function is within the central bank; 3) financial sector regulation/supervision is not integrated; 4) uncertain availability of quality data. A macroprudential policy framework is not a silver bullet for safeguarding financial stability. It is also useful to highlight that a macroprudential policy framework cannot take the place of other public policy frameworks. While pursuing macroprudential policy to build a more resilient financial system, authorities should also take into consideration the significant financial development needs that may exist in their respective jurisdictions. This Practice Guide has been structured in a logical sequence that mirrors implementation. The second and third sections are laid out to clarify and provide some context to the concept of a macroprudential approach to supervision and discuss the institutional framework. The fourth and fifth sections deal with the operational aspects of macroprudential policy framework that are timely detection of systemic risks using early warning systems and addressing the buildup of systemic risks with macroprudential policy instruments.”
To order: World Bank


Frederic S. Mishkin 
The Economics of Money, Banking and Financial Markets 
Pearson (2016)
“The Economics of Money, Banking, and Financial Markets set the standard for money and banking courses when it published in its first edition, and it continues to be the worldwide market leader.  By applying a unified analytical framework to the models, Mishkin makes theory intuitive for students, and the rich array of current, real-world events keeps students motivated. Authoritative, comprehensive, and flexible, the text is easy to integrate into a wide variety of syllabi, and its ancillaries provide complete support when teaching the course.
This Global Edition has been edited to include enhancements making it more relevant to students outside the United States. The editorial team at Pearson has worked closely with educators around the globe to include: This edition continues to expand on the discussion of the current financial crisis.”
To order: Pearson


Niamh Moloney, Eilís Ferran, and Jennifer Payne
The Oxford Handbook of Financial Regulation
Oxford University Press(2015)
“The financial system and its regulation have undergone exponential growth and dramatic reform over the last thirty years. This period has witnessed major developments in the nature and intensity of financial markets, as well as repeated cycles of regulatory reform and development, often linked to crisis conditions. The recent financial crisis has led to unparalleled interest in financial regulation from policymakers, economists, legal practitioners, and the academic community, and has prompted large-scale regulatory reform. The Oxford Handbook of Financial Regulation is the first comprehensive, authoritative, and state-of-the-art account of the nature of financial regulation. Written by an international team of leading scholars in the field, it takes a contextual and comparative approach to examine scholarly, policy, and regulatory developments in the past three decades.”
To order: Oxford University Press


Tony Porter
Transnational Financial Regulation after the Crisis
Rotledge (2014)
“The global financial crisis that began in 2007 was the most destructive since the 1930s. The rapid spread of the crisis across borders and the complexity of these cross-border linkages highlighted the importance for authorities of working together in responding to the crisis. This book examines the transnational response that relied heavily on a set of relatively informal transnational regulatory groupings that had been constructed over previous decades. During the crisis these arrangements were made stronger and more inclusive, but they remain very complex. Thousands of pages of new rules have been created by various transnational bodies, and the implementation of these rules relies heavily on domestic law and regulation and private rules and practices.This book analyses this complex response, showing that its overly technical and incremental character, the persistence of tensions between transnational processes and state-centred politics, and the ongoing power of private actors, have made the regulatory response fall short of what is needed.”
To order: Routledge


Peter Sarlin 
Mapping Financial Stability 
Springer (2014)
“This book approaches macroprudential oversight from the viewpoint of three tasks. The focus concerns a tight integration of means for risk communication into analytical tools for risk identification and risk assessment. Generally, this book explores approaches for representing complex data concerning financial entities on low-dimensional displays. Data and dimension reduction methods, and their combinations, hold promise for representing multivariate data structures in easily understandable formats. Accordingly, this book creates a Self-Organizing Financial Stability Map (SOFSM), and lays out a general framework for mapping the state of financial stability. Beyond external risk communication, the aim of the visual means is to support disciplined and structured judgmental analysis based upon policymakers’ experience and domain intelligence.”
To order: Springer


Dirk Schoenmaker 
Governance of International Banking – The Financial Trilemma
Oxford University Press (2013)
“In the aftermath of the financial crisis, the business model of international banks is under pressure. Regulators across the world are retrenching to national lines by applying restrictions on cross-border banking. Applying game theory, this book develops a model of the financial trilemma to understand the co-ordination failure among regulators. It also provides governance solutions to overcome this co-ordination failure. The goal is to offer a long-term perspective on international banking for regulators and academics. The book combines academic insights and policy issues.”
To order: Oxford University Press


Xavier Vives 
Competition and Stability in Banking: The Role of Regulation and Competition Policy 
Princeton University Press(2016)
“Does too much competition in banking hurt society? What policies can best protect and stabilize banking without stifling it? Institutional responses to such questions have evolved over time, from interventionist regulatory control after the Great Depression to the liberalization policies that started in the United States in the 1970s. The global financial crisis of 2007 – 2009, which originated from an oversupply of credit, once again raised questions about excessive banking competition and what should be done about it. Competition and Stability in Banking addresses the critical relationships between competition, regulation, and stability, and the implications of coordinating banking regulations with competition policies.”
To order: Princeton University Press