What are the key features of the Bank Recovery and Resolution Directive (BRRD) introduced in the European Union in 2015? Does the introduction of bail-in mean the end of “too big to fail”?
• Explain key banking concepts, such as liquidity and solvency, and their interrelationship by analyzing a bank’s balance sheet and income statements in the context of imperfect information.
• Explain the importance and limitations of prudential regulation in preventing banking crises, including capital requirements and the Basle Accords (Basel I, II and III). Understand the key differences between micro- prudential and macro-prudential regulation and the concept of systemic risk.