Special Topics in Banking and Finance: Finanzmärkte

Part of the Required Elective Module ("Alternatives Pflichtmodul") Banking and Finance.

Main objectives

This course provides an introduction into topical issues in the field of banking and finance. It aims at building a bridge between theoretical and methodological knowledge acquired in the first years to real world markets and applications. Current topics of interest include financial crises and the role of banks. Why do markets fail and how can prudential regulation improve their performance and resilience?

The course also serves as the basis for more advanced research, which may take the form of a bachelor thesis or even continued studies in form of subsequent master program in finance. Certain topics would lend themselves easily to bachelor theses in the general field of banking and finance.

Course outline

1. Introduction

2. Main functions of the financial system

  • intertemporal transfers
  • insurance and hedging
  • information production

3. Financial markets and the pricing of risk

  • review: CAPM
  • anomalies
  • illiquidity and private information

4. The role of financial intermediaries

  • banking functions
  • banking risks
  • financing of (risky) innovations

5. Topical issues

  • Banking regulation
  • Bank networks and systemic risk
  • Securitization and financial innovation
  • High frequency trading and systemic risk

Course cycle

Each winter term


Charles Calomiris and Gary Gorton: The Origins of Banking Panics: Models, Facts and Bank Regulation, in Glenn Hubbard (ed.): Financial Markets and Financial Crises, University of Chicago Press, January 1991.

Anna Cieslak, Morse Adair and Annette Vissing-Jorgensen: Stock Returns over the FOMC Cycle, Working Paper, Oct. 2015.

Franklin Allen and Douglas Gale, Comparing Financial Systems, MIT Press.

Thomas Gehrig: “Capital, Trust and Competitiveness in the Banking Industry”, CEPR-DP 9348, London, Feb. 2013.

Thomas Gehrig: Changing Business Models in Banking and Systemic Risk, in H. Albach, H. Meffert, A. Pinkwart, H. Reichwald (Hrsg): Management of Permanent Change in Firms and Markets, Springer-Gabler, 2015.

Jacob de Haan, Sander Oosterloo and Dirk Schoenmaker: Financial Markets and Institutions: A European Perspective, Cambridge University Press, 2nd edition 2012.

Charles Kindleberger: Manias, Panics, Crashes, A History of Financial Crises, NY, Basic Books, 1978.

Sam Langfield and Marco Pagano, Bank Bias in Europe: Effects on Systemic Risk and Growth, ECB Working Paper 1797, May 2015.

Frederic S. Mishkin, The Economics of Money, Banking and Financial Markets, Business School Edition,11th ed., Pearson: Harlow, Engl., 2015.