Finance and insurance

IDA CLAUDIA PANETTA

The course provides students with an in-depth understanding of economic and financial systems, with particular attention to their structures, operating mechanisms, and the factors driving their evolution across different national and international contexts. The aim of the course is to develop a comparative perspective on major financial systems, fostering an understanding of their role in economic development and in shaping the regulatory dynamics of markets and intermediaries. At the end of the course, students will be able to recognize, understand, and apply theoretical and empirical models useful for analysing the features and evolution of international financial systems. They will be able to critically assess the business models of financial intermediaries, interpret and contextualize the transformations of markets and financial instruments in light of both national and supranational regulatory frameworks, and select the most appropriate solutions to enhance system efficiency. The course design, which combines theoretical analysis with case studies and real-world market examples, promotes the development of independent judgment in evaluating economic and financial dynamics, communication skills for clearly and rigorously presenting complex concepts to both specialist and non-specialist audiences, and autonomous learning abilities to update and expand knowledge in response to market and regulatory evolution. The competences acquired will therefore enable students to consolidate the analytical foundations necessary to successfully pursue advanced courses in the economic–financial area and to prepare for future professional engagement.

The course provides students with an in-depth understanding of economic and financial systems, with particular attention to their structures, operating mechanisms, and the factors driving their evolution across different national and international contexts. At the end of the course, students will acquire the following skills:
• Applying knowledge and understanding: Students will be able to apply the acquired knowledge to the analysis of financial intermediation business models, interpreting the evolution of markets and financial instruments. They will be able to employ theoretical and empirical models to critically assess economic and financial phenomena in real contexts, also taking into account the international regulatory framework.
• Making judgments: Students will be able to evaluate financial system models from a critical and comparative perspective, identifying strengths and limitations. They will have acquired knowledge of the functioning of financial, insurance, and pension markets and will be able to integrate these competences to analyse financial system choices and dynamics in the international context.
• Communication skills: Students will be able to communicate complex concepts related to international financial markets and intermediaries clearly and effectively, using appropriate technical language. They will be able to adapt their communication style to different audiences, conveying their knowledge in both specialist and non-specialist forms, including multidisciplinary contexts within the financial, insurance, and pension sectors.
• Learning skills: Students will develop the ability to autonomously and critically learn about the models and dynamics of international financial markets and intermediaries. They will be able to update and expand their knowledge in response to evolving regulation, instruments, and emerging technologies.

To successfully engage with this course, it is helpful to have a basic understanding of how the financial system works, with particular reference to:
1) Structure and components of the financial system: the role of markets, intermediaries, instruments/products, and the main mechanisms through which these elements function and interact.
2) Financial intermediaries and the services they provide: the economic functions of intermediation; differences between banks and non-bank intermediaries; main activities (funding and lending, credit, savings management, financial services) and essential operational notions.
3) Risks and risk management: core concepts of credit risk, market risk, liquidity risk, and operational risk, as well as general principles of measurement and mitigation (at an introductory level).
4) Regulation and supervision: the objectives of prudential and conduct supervision, the main authorities, and the institutional framework (e.g., banking and financial supervision; the role of the ECB in the European context).
5) Markets, instruments, and infrastructures: key features of securities (bonds/shares) and markets, and introductory notions on market infrastructures and how markets operate (including, in general terms, the role of trading venues).
6) Payments and payment services: basic concepts related to payment systems and the associated services.

If these prerequisites are not in place, students are advised to fill any gaps by using an introductory textbook on financial intermediaries/the financial system covering the areas listed above (possibly through a targeted selection of topics, depending on prior background). Students are also encouraged to contact the instructor for guidance tailored to their previous study path.

Part I - THE ANALYSIS OF INTERNATIONAL FINANCIAL SYSTEMS
• Approaches to the analysis of financial systems
• Taxonomy of financial systems
• Analysis tools
• Main data sources at the international level

Part II - INTERNATIONAL FINANCIAL INTERMEDIARIES AND MARKETS: BUSINESS MODELS AND DEVELOPMENT STRATEGIES IN DIFFERENT CONTEXTS
• The Securities Exchange Industry
• The insurance sector
• The banking sector
• Other intermediaries (guarantee schemes, sovereign funds, investment funds, etc.)
• The role of technological innovation in the areas of financial sector

Part III - SUPERVISION AND REGULATION
• Regulatory approaches
• Supervisory models
• The costs related to regulation and supervision activities

Part IV - ANALYSIS OF SOME INTERNATIONAL FINANCIAL SYSTEMS
• Islamic Financial System
• Chinese financial system
• US financial system
• EU financial systems

Adopted textbook. B. Casu, C. Girardone, P. Molyneux, Introduction to Banking, 3rd edition, Pearson, 2021, limited to the chapters and sections indicated in the Course plan. Studying the indicated parts of the adopted textbook is an integral part of exam preparation.
Supplementary materials. Supplementary teaching materials are made available on the Sapienza e-learning platform (Moodle 2) at the following link: https://elearning.uniroma1.it/course/view.php?id=21526, including the lecture slides, original lecture notes, articles and selected parts of other texts useful for exam preparation. These materials complement, but do not replace, the adopted textbook. Access to the course Moodle page requires an enrolment code, communicated in class; non-attending students may request it from the lecturers by e-mail at any time.

* Bank of Italy. (2026). Annual report for 2025. https://www.bancaditalia.it
* Basel Committee on Banking Supervision. (2024). Core principles for effective banking supervision. Bank for International Settlements. https://www.bis.org
* Beck, T., & Casu, B. (Eds.). (2016). The Palgrave handbook of European banking. Palgrave Macmillan.
* European Central Bank. (2026). Annual report on supervisory activities 2025. https://www.bankingsupervision.europa.eu
* Matthews, K., Thompson, J., & Zhang, T. (2023). The economics of banking (4th ed.). World Scientific.
* Mishkin, F. S. (2022). The economics of money, banking and financial markets (13th ed., Global ed.). Pearson.

- Traditional lectures
- Testimonials and seminars
- Study groups preparing written assignments and/or research projects on international financial systems

Attendance is not compulsory but strongly recommended

The assessment for the awarding of credits consists of an oral exam aimed at verifying that the student has acquired the following abilities in relation to the course topics:
* Knowledge and understanding: through questions designed to ascertain the understanding of the phenomena analysed during the course;
* Applying knowledge and understanding: through the solution and discussion of concrete cases;
* Learning skills: through metacognitive questions that may require, for example, outlining the steps needed to set up the study of a foreign financial system;
* Making judgements: through questions aimed at assessing the quality of the argumentation and the critical use of the knowledge acquired.

The oral exam is structured into three main questions, each of which may be followed by additional follow-up questions. The questions are designed to provide balanced coverage of the course’s core thematic areas:
1) a conceptual and methodological framing question (approaches, taxonomies, analytical tools, and data sources);
2) an applied/case-based question focusing on intermediaries, markets, technological innovation and/or issues related to regulation and supervision;
3) a mandatory comparative analysis question on one of the international financial systems covered in the syllabus (e.g., Islamic, Chinese, U.S., or European systems), aimed at assessing the ability to link institutional and operational features to their implications for markets, intermediaries, and rules.

Grading criteria (on a 30-point scale): accuracy and completeness of content; ability to apply analytical categories and tools to concrete cases; quality of comparative analysis and of the connections drawn across different parts of the syllabus; independence of judgement and strength of argumentation; clarity of presentation and appropriate use of disciplinary language. Honours (30/30 cum laude) are awarded when the student demonstrates full mastery of the subject, very strong cross-cutting integration, and particularly mature critical thinking.

For the closed-answer part (true/false and multiple choice), questions typically cover: the distinction between adverse selection and moral hazard in the bank–customer relationship; the transformation functions performed by banks; the features of the main banking services and of the lending products offered to businesses; the components of a bank's balance sheet and income statement; the difference between expected and unexpected losses; the meaning of the LCR and NSFR indicators; the pillars of the Basel framework and the tasks of the Single Supervisory Mechanism.
Examples of short open-answer questions, possibly in the form of exercises: "Given the net interest income, net fees and operating costs reported in the table, compute the bank's cost-income ratio and comment on its value against the sector average provided"; "Briefly illustrate the differences between an overdraft facility and invoice advances, indicating the firm's financial needs for which each product is appropriate"; "Define expected and unexpected loss and compute the expected loss of an exposure given its PD, LGD and EAD".
Examples of long open-answer questions, possibly in the form of structured exercises: "Starting from the simplified financial statements provided, reconstruct the bank's ROE decomposition, assess its profitability and soundness, and give a reasoned judgement on its overall performance"; "A manufacturing firm has the financial needs described in the case: identify the most appropriate banking services and lending products, justifying your proposal also in the light of the creditworthiness assessment process"; "Discuss the economic rationale for banking regulation and analyse, with reference to capital and liquidity requirements, its impact on banks' operations and choices".

• THE
  ANALYSIS OF INTERNATIONAL FINANCIAL SYSTE (14 HOURS)
  • Books: Lecture notes 1-4


• INTERNATIONAL
  FINANCIAL INTERMEDIARIES AND MARKETS: BUSINESS MODELS AND DEVELOPMENT
  STRATEGIES IN DIFFERENT CONTEXTS (14 HOURS) 
  • Books: Lecture notes 5-7


• SUPERVISION
  AND REGULATION (2/4 HOURS) 
  • Books: Lecture note 8


• ANALYSIS OF SOME INTERNATIONAL FINANCIAL SYSTEMS (18/16 HOURS)
  • Books: Lecture notes 9-13