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OAFP 5095 - Financial Stability

Type d'enseignement : Elective

Semester : Spring 2017-2018

Number of hours : 24

Language of tuition : English


Sound background in macro and microeconomics. Mathematical skills are not required. Reading “Stabilité financière” (De Bandt, Drumetz and Pfister, de Boeck, 2013) will help but is not required.

Course Description

The objective of the course is to help the students understand the reasons for financial instability and the merits as well as the limits of policies aiming at financial stability. To that end, theory, facts, and policies are systematically brought together and compared. The course provides an overview of the main theoretical and empirical knowledge available on the causes and consequences of financial instability. It discusses the policies that have been considered and/or implemented so as to limit the negative consequences of future crises. The institutions in charge of financial stability at the domestic, European and international levels and the instruments at their disposal are also presented.


  • DRUMETZ, Françoise (Directrice de la Coopération Extérieure, Banque de France)
  • PFISTER, Christian (Directeur Général adjoint, Banque de france)

Pedagogical format

The course is taught basically on an ex cathedra basis, although students will be encouraged to react, express their own views, and ask questions.

Course validation

Participation in the course : 10%. Mid-term exam (1 hour, during the 6th course): 45%. Final exam (1 hour, during the 12th and last course): 45%. For both exams, students are encouraged to use their lap-tops.


Some reading is required after or preferably before each course.

Required reading

  • Tirole, J. (2011), Illiquidity and All Its Friends, Journal of Economic Literature, 49(2), 287-325
  • Reinhart, C. M., Rogoff, K. S. (2009), This time is different: eight centuries of financial folly, Princeton N. J., Princeton University Press
  • Bell, B., Van Reenen, J. (2014), Bankers and their Bonuses, Economic Journal, 124(574), 1-21
  • Reinhart, C. M., Rogoff, K. S. (2011), From financial crash to debt crisis, American Economic Review, 101, 1676-1706
  • Tirole, J. (2012), The euro crisis: some reflexions on institutional reform, Banque de France, Financial Stability Review, 16, 225-242,