COURSE INFORMATION Course Title: BANKING SYSTEM AND CENTRAL BANKING

Code	Course Type	Regular Semester	Theory	Practice	Lab	Credits	ECTS
BAF 521	C	3	3	0	0	3	7.5

Academic staff member responsible for the design of the course syllabus (name, surname, academic title/scientific degree, email address and signature)	Dr. Chrysanthi Balomenou cbalomenou@epoka.edu.al
Main Course Lecturer (name, surname, academic title/scientific degree, email address and signature) and Office Hours:	Dr. Fisnik Shtini fshtini@epoka.edu.al , Friday 18:00 - 20:50
Second Course Lecturer(s) (name, surname, academic title/scientific degree, email address and signature) and Office Hours:	NA
Language:	English
Compulsory/Elective:	Elective
Study program: (the study for which this course is offered)	Master of Science in Banking and Finance
Classroom and Meeting Time:	Friday
Teaching Assistant(s) and Office Hours:	NA
Code of Ethics:	Code of Ethics of EPOKA University Regulation of EPOKA University "On Student Discipline"
Attendance Requirement:	80%
Course Description:	The course starts with describing the role of the financial system in a market economy, discussing the main types of institutions, markets, players, products and the legal framework of Albanian financial system. It delves into the specific role of Central Bank in Albania, focusing on its independence, monetary policy and supervision cores. In-depth analysis is further provided on the main drivers and key challenges encountered along the way by the Albanian commercial banks, emphasizing the current regulation, technological and product innovations as well as bank-customer relationship. Finally, the implications of the recent global financial crisis in Albania’s banking sector are highlighted in the last session. The course will use several real-life case studies drawn up from the Albanian experience to provide particular insights on currents issues and illustrate the weekly topics, in the form of lessons from experience.
Course Objectives:	The course aims to provide students with the fundamentals of banking and financial system and equip them with necessary theoretical and practical competencies to enable them perform effectively a job as bankers in a commercial or central bank setting. The students should be able to understand the importance of maintaining financial stability for sustainable development of the economy. They also should be able to understand how the transmission mechanism of monetary policy works and how banks are affected and also are involved in the transmission process.

BASIC CONCEPTS OF THE COURSE

1	Students should be enabled to understand the different monetary policy instruments that main Central Banks deploy in order to fullfil their mandate in normal times as well as in times of distress.
2	Attention will be paid to the different channels of the monetary transmission mechanism, which varies depending on the scale of the distress with regard to the price stability.
3	Hereby unconventional monetary policy instruments and their main transmission channels will explained so that the nature and the trends of the main Central Banks can better be understood.

COURSE OUTLINE

Week	Topics
1	Introduction - Financial system Development and Economic Growth: Theoretical Background.
2	Understanding financial system: Balance sheet of (Commercial) banks
3	Understanding Financial System: Balance Sheet of Central Bank: Liabilities
4	Understanding Financial System: Balance Sheet of Central Bank: Assets
5	Understanding Financial System: Balance Sheet of Central Bank: CHANGES in Balance Sheet
6	Monetary Policy Instruments of Central Bank
7	Monetary Policy Implementation
8	Mid-Term Exam
9	Monetary Policy Transmission Mechanism
10	Unconventional Monetary Policy Instruments & Transmission Channels
11	Unconventional Monetary Policy Instruments & Transmission Channels – II
12	Unconventional Monetary Policy Instruments & Transmission Channels – III
13	Summary on Monetary policy Transmission Mechanism - Trends of main Central Banks
14	Final Exam

Prerequisite(s):	-
Textbook(s):	Mandatory literature: - In the form of articles: ECB Occasional Paper Series, Fed publications, and publications from the Bank of Albania. - Books: Mishkin, Frederic (2016): The economics of money, banking and financial markets. 11th ed., Columbia University, Pearson; Admati, Anat; Hellwig, Martin (2013): The Bankers' New Clothes: What's Wrong With Banking and What to Do About It?, Princeton University Press. - Papers: Levine, Ross (1997), ‘‘Financial Development and Economic Growth: Views and Agenda,’’ Journal of Economic Literature, vol. 35, pp. 688-726.; Levine, Ross (2004), ‘‘Finance and Growth: Theory, Evidence and Mechanisms,’’ NBER Working Paper No.10766; “On the capitalization of central banks” 2022, Occasional Studies Volume 20 – 4, Paul Wessels & Dirk Broeders, p.18-25 and 41-49; “Central Bank Balance Sheet Analysis” 2016, Bagus, Philipp and Howden, David, MPRA Paper No. 79801; Otmar Issing, Are central banks independent or almighty? (2021); Claudia Buch, Central bank independence: mandates, mechanisms, and modifications, panel discussion “Lessons from Central Bank History?” on the occasion of the conference “From Reichsbank to Bundesbank” 24.09.2021. Thomas F. Cargill, “The Financial System, Financial Regulation and Central Bank Policy”, (2017), Cambridge University Press; BIS (Bank for International Settlements (BIS) and EBA (European Banking Authority) reports on Basel accords and reforms. Other references: materials prepared by the lecturer.
Additional Literature:
Laboratory Work:	-
Computer Usage:	Yes
Others:	No

COURSE LEARNING OUTCOMES

1	Learning about the types of institutions, markets, players, products and the legal framework and requirements for banking, central banking and financial system.
2	Understanding the importance of maintaining financial stability for sustained development of the economy
3	Getting to know the role and importance of Central Bank, its monetary policy, the main instruments, and its transmission channels.
4	Understanding the importance Central Bank Independence.
5	Introducing students to the philosophy and principles of effective banking supervision so that to pave the way for the need of an effective infrastructure for banking supervision in respect of the legal and regulatory environment
6	Understanding trends of the main Central Banks today
7	Understanding Unconventional Monetary Policy opportunities and risks

COURSE CONTRIBUTION TO... PROGRAM COMPETENCIES (Blank : no contribution, 1: least contribution ... 5: highest contribution)

No	Program Competencies	Cont.
Master of Science in Banking and Finance Program
1	The students gain the ability to look at the problems of daily life from a broader perspective with an increased awareness of the importance of moral/ethical considerations and professional integrity in the workplace.
2	They develop a broader understanding of banking and finance including concepts, theories, and analytical tools that serve both in national and international markets.
3	They are able to apply advanced valuation models to estimate the price of different financial assets as well as evaluate multinational business firms.
4	They are able to apply different investment techniques and form portfolios that would generate higher returns by decreasing the unsystematic risk level.
5	They have advanced knowledge of the regulatory framework and functioning of the banking system, international banking, central banking and the conduct of monetary policy.
6	They are able to conduct advanced financial analysis and use the results in the decision-making process of business firms.
7	They are able to understand and use advanced economic theories and tools to solve economic problems in banking and financial services industry.
8	They have the ability to utilize accounting, financial and economic data as well as other information to solve complex and unstructured business problems by using advanced econometric and statistical models.
9	They develop their ability to think critically, do advanced and independent research, analyze, interpret results, draw conclusions, and communicate effectively, both individually and as part of a team.
10	They are provided with opportunities to acquire the necessary skills and competencies to move on to further study within the discipline.

COURSE EVALUATION METHOD

Method	Quantity	Percentage
Midterm Exam(s)	1	40
Project	1	50
Attendance		10
	Total Percent:	100%

ECTS (ALLOCATED BASED ON STUDENT WORKLOAD)

Activities	Quantity	Duration(Hours)	Total Workload(Hours)
Course Duration (Including the exam week: 16x Total course hours)	16	3	48
Hours for off-the-classroom study (Pre-study, practice)	16	3	48
Mid-terms	1	20	20
Assignments			0
Final examination	1	26	26
Other	7	6.5	45.5
Total Work Load:			187.5
Total Work Load/25(h):			7.5
ECTS Credit of the Course:			7.5

CONCLUDING REMARKS BY THE COURSE LECTURER

Active participation of the students is highly recommended. It is appreciated to have a conversation based lectures with students doing their research prior to the lessons.