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Banking

Empirical Banking for Regulation and Supervision

This course introduces the empirical methods and public data used in bank regulation and supervision.

10h (5 days)

€1,260

Face-to-face

English

Next edition: July 12-16, 2027

Early Bird deadline: April 15, 2027

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Banking

Empirical Banking for Regulation and Supervision

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Who is this Course for?

Empirical Banking for Regulation and Supervision

Course Overview

Understanding bank risk is essential to assessing financial stability and the effectiveness of banking regulation. Since the 2008 Global Financial Crisis, policymakers have focused on why banks fail, how financial distress spreads and which measures can prevent individual failures from threatening the wider economy. Technological change, climate risks and geopolitical uncertainty make these questions increasingly important.

This course explores the economic principles behind banking risk, regulation and financial stability. Participants will examine how information asymmetries, adverse selection, moral hazard and limited liability shape lending decisions and risk-taking. They will also learn how banks assess borrower risk, how risk measurement informs capital requirements, and how banking policies affect lending and financial stability.

Combining real-world banking episodes, simple quantitative applications and evidence from academic research, the course focuses on developing economic intuition and interpreting empirical results. Participants will gain the tools to evaluate what data and quantitative models reveal about bank behaviour, assess the effectiveness of regulatory policies, and understand how risks at individual banks can become threats to the wider financial system.

Faculty

Who is this course for?

This introductory course is designed for those looking for a first approach to banking, as well as for those with some background who want to broaden their knowledge or explore new directions.

Participants may include:

Master’s and PhD students who want to get started in banking, or who are considering it as a field of research
Researchers from other areas of economics and finance interested in moving into banking topics
Central bankers and regulators seeking a solid grounding in the key questions and tools of the field, or a refresher on recent developments
Industry professionals in banking and consulting who want a structured introduction to how bank risk, regulation and financial stability are analysed

Learning outcomes

Upon completion of the course, participants will have:

Identify the main sources of bank vulnerability, including credit, liquidity, funding, and interest-rate risk
Understand how information asymmetries, limited liability, and risk-shifting incentives affect borrowers, banks, and lending decisions
Understand how banks measure borrower and portfolio credit risk
Connect credit-risk measures with risk-weighted assets and bank capital requirements
Understand how banking policies and regulatory interventions can affect lending, risk-taking, and other bank decisions
Interpret empirical evidence in banking, including model predictions, coefficients, tables, and graphical results
Understand the difference between individual bank risk and systemic risk, and the role of macroprudential policy

Key topics for Empirical Banking Regulation and Supervision course

Here are the topics covered in this edition of this BSE Banking course.

Course outline

Discover the topics you’ll cover during the course.

How Do Banks Assess Credit Risk?

Information asymmetries in lending: adverse selection and moral hazard
Limited liability, risk shifting, and borrower incentives
Credit risk and probability of default
Borrower characteristics and financial information
Evaluating predictions: discrimination and calibration
Hard versus soft information and relationship banking
Strengths and limitations of quantitative credit-risk models

From Credit Risk to Bank Capital

Limited liability, bank risk-taking, and the role of capital regulation
Expected and unexpected credit losses
Probability of default, loss given default, and exposure at default
Risk weights and risk-weighted assets
Bank capital and capital ratios
Standardised and internal-model approaches
Differences in measured risk across banks and portfolios
Model risk and incentives in risk measurement

Why Do Banks Become Fragile?

Bank capital, liquidity, and funding risk
Interest-rate risk and changes in asset values
Deposits, funding structure, and liquidity pressures
Bank runs and depositor behaviour
The interaction between monetary tightening and bank balance sheets
Recent episodes of banking distress
Indicators of bank vulnerability

How Do We Know Whether Banking Policies Work?

Correlation, causality, and the counterfactual
Why evaluating banking policies is difficult
Natural experiments and policy changes in banking
Difference-in-differences: intuition and interpretation
Event studies and graphical evidence
Separating credit supply from credit demand
Interpreting empirical estimates and their limitations

From Bank Risk to Financial Stability

Individual bank risk versus systemic risk
Contagion, interconnectedness, and common exposures
Banking crises and amplification mechanisms
Interpreting empirical measures of systemic risk
Macroprudential policy and its objectives
Capital buffers and selected macroprudential instruments
Evidence on the effects of macroprudential policies

List of References

Below is a group of texts that may help you when preparing for the course. References are organized by topic.

How Do Banks Assess Credit Risk?

Altman, E. (1968), “Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy,” Journal of Finance, 23(4).
Baesens, B., Rösch, D. & Scheule, H. (2016), Credit Risk Analytics: Measurement Techniques, Applications, and Examples in SAS, Wiley.
Van Gestel, T. & Baesens, B. (2009), Credit Risk Management: Basic Concepts, Oxford University Press.

From Credit Risk to Bank Capital

Behn, M., Haselmann, R. & Vig, V. (2022), “The Limits of Model-Based Regulation,” Journal of Finance, 77(3).
Plosser, M. & Santos, J. (2018), “Banks’ Incentives and Inconsistent Risk Models,” Review of Financial Studies, 31(6).
Van Gestel, T. & Baesens, B. (2009), Credit Risk Management: Basic Concepts, Oxford University Press.

Why Do Banks Become Fragile?

Jiang, E., Matvos, G., Piskorski, T. & Seru, A. (2024), “Monetary Tightening and U.S. Bank Fragility in 2023,” Journal of Financial Economics.
Freixas, X. & Rochet, J.-C. (2023), Microeconomics of Banking, 3rd ed., MIT Press.

How Do We Know Whether Banking Policies Work?

Khwaja, A. & Mian, A. (2008), “Tracing the Impact of Bank Liquidity Shocks,” American Economic Review, 98(4).
Gropp, R., Mosk, T., Ongena, S. & Wix, C. (2019), “Banks’ Response to Higher Capital Requirements,” Review of Financial Studies, 32(1).
Jiménez, G., Martín-Oliver, A., Peydró, J.-L., Toldrà-Simats, A. & Vicente, S. (2026), “Do Bank Branches Matter? Evidence from Mandatory Branch Closings,” working paper

From Bank Risk to Financial Stability

Adrian, T. & Brunnermeier, M. (2016), “CoVaR,” American Economic Review, 106(7).
Cerutti, E., Claessens, S. & Laeven, L. (2017), “The Use and Effectiveness of Macroprudential Policies,” Journal of Financial Stability, 28.
Laeven, L. & Valencia, F. (2020), “Systemic Banking Crises Database II,” IMF Economic Review.
Freixas, X., Laeven, L. & Peydró, J.-L. (2015), Systemic Risk, Crises, and Macroprudential Regulation, MIT Press.

Teaching Methods

The course combines economic intuition, real-world banking cases, simple quantitative exercises, and evidence from academic research
The course introduces empirical methods when they help answer a specific banking question, rather than treating them as a separate technical topic. Participants will work mainly on interpreting data, figures, model outputs, and empirical findings
Statistical software may be used for selected illustrations and applications, but programming is not a prerequisite. The emphasis throughout is on understanding the economic mechanisms and interpreting the evidence

Call For Papers

Students are encouraged to present their research papers.

If you are interested in submitting a paper for review, please make your submission to summerschool@bse.eu. Please put “Banking call for papers” in the subject line of your email.

The deadline for submitting papers is June 14, and the schedule for the presentation of papers will be announced when the selection of papers has been finalized.

Why join our Summer School?

All BSE Summer courses are taught to the same high standard as our Master’s programs. Join us to:

1

Network with like-minded peers

2

Study in vibrant Barcelona

3

Learn from world-renowned faculty

Admissions and Requirements

The level of the material is equivalent to what is presented in our Master’s programs.

It is the responsibility of the applicant to check they meet the eligibility requirements for admission.

Next edition: July 12-16, 2027

Early Bird deadline: April 15, 2027

Requirements

Successful candidates will usually demonstrate one or more of the following:

A strong background in Economics or a field closely related to the course topic (Statistics, Law, etc.)
Postgraduate degree or current Master’s/PhD studies related to the course topic
Relevant professional experience

Requirements for the Empirical Banking for Regulation and Supervision course

Basic concepts in Econometrics are recommended, but no advanced econometric or programming background is required

Here is your schedule for BSE Banking program Empirical Banking course

Time

12

mon

13

tue

14

wed

15

thu

16

fri

11:30-13:30

Lecture

Credit Transfers (ECTS)

To be eligible for credit transfer, students must complete a final project.

Students will deliver a short summary of a paper one week after the summer school finishes. It will consist of a critical summary of a published paper, around 3-4 pages, 1.5 spaced, font size 11. The critical summary will need to follow these guidelines: expose what are the main ideas of the paper, how they are addressed, strength and weakness of the paper, methodological approach, theoretical or empirical background, and suggestions for improvements.

Consult the Summer School Admissions page for more information about this option.

Certificate of Attendance

Participants who attend more than 80% of the course will receive a Certificate of Attendance, free of charge.

Course

Empirical Banking for Regulation and Supervision

Banking and Money

Banking in Macro-finance: Empirical Tools and Applications

Banking Theory

Empirical Methods in Banking

Regulating and Supervising Banks in a Changing Financial System

Modality

Face-to-face

Total Hours

10

ECTS

1

Regular Fee

€1,260

Reduced Fee*

€740

* Reduced Fee applies for PhD or Master’s students, Alumni of BSE Master’s programs, and participants who are unemployed.

Multiple discounts are available.

For more information on discounts for participants funding their own course, please click here.

For more information on discounts for companies and institutions enrolling their employees, please click here.

Full discount conditions are available here.

FAQ

Here are some commonly asked questions by participants. Any further queries, please contact our Admissions Team.

Can I see the full Summer School calendar?

You can view the full Summer School calendar here.

Is accommodation included in the course fee?

Unfortunately, accommodation is not included in the course fee. Participants are responsible for finding accommodation.

Are the sessions recorded?

Sessions will NOT be recorded; however, the materials provided by the professor will be available for a month after the course has finished.

How much does each Summer School course cost?

Fees for each course may vary. Please consult each course page for accurate information.

Are there any discounts available?

Yes, BSE offers a variety of discounts on its Summer School courses. See more information about available discounts or request a personalized discount quote by email.

Can I take more than one course?

Yes! you can combine any of the Summer School courses (schedule permitting). See the full course calendar.

Cancelation and Refund Policy

Please consult BSE Summer School policies for more information.

Are there any evening activities during the course?

A social dinner will take place during the week for all participants, it is free to attend.

Contact our Admissions Team

Mix and match your summer courses!

Remember that you can combine Banking Summer School courses with courses in any of the other BSE Summer School programs (schedule permitting). Maximise your learning this summer and take advantage of our multiple-course discount.

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