The Economics of Banking (Fourth Edition) examines trends and operations in banking within a microeconomic framework. Covering a range of topics, including global trends in banking, theories of the banking firm, economics analysis of bank behaviour, and much more, this book addresses the need for a user-friendly and mathematically accessible textbook in this subject area.

Each successful edition has expanded on new and emerging developments in global banking. This fourth edition explores the challenge of fintech and non-bank financing to the banking market. It examines the implications of the digitisation of the means of payment on the banking system, and the emergence of the digital bank. It also addresses recent developments in shadow banking (both globally and with a specific focus on China), P2P, Islamic banks and challenger banks. The section on credit rationing and credit pricing has been expanded to include additional material on the geography of credit allocation and spatial rationing. China features strongly in the updated material on bank efficiency and competition. Bank regulation has also been updated to examine the recent changes in global bank regulation and particularly the application of Basel III standards to China and other Asian economies.

The Economics of Banking provides a sound theoretical basis for understanding bank behaviour, while requiring only a basic knowledge of microeconomics. The book is aimed at final year undergraduates undertaking a Banking & Finance degree, and to MBA and specialised PG degrees in Finance that include a Banking option.

Contents:

• Trends in Domestic and International Banking


• Financial Intermediation: The Impact of the Capital Market


• Banks and Financial Intermediation


• Banking Typology


• International Banking


• The Theory of the Banking Firm


• Models of Banking Behaviour


• Credit Rationing


• Securitisation


• Bank Efficiency and the Structure of Banking


• Banking Competition


• Bank Regulation


• Banks and Money Laundering


• Risk Management


• The Macroeconomics of Banking

Readership: Undergraduate students in banking & finance degrees. Postgraduate students of economics & finance degrees undertaking a banking module.

Key Features:

• User-friendly and mathematically accessible textbook that describes and explains the behavior of banks


• Uses economic theory to explain bank behavior but employs intermediate level of economics


• Institutional detail, mathematical models, and practical applications placed in boxes so as to maintain the flow of the text