Notes regarding credits...

80% of course work taught in English
20% of course work taught in Spanish

Taught In English

There is no language prerequisite for courses at this language level.

The evolution over recent decades of Information Technologies together with the globalization and liberalising process of the financial markets has meant that the Financial System now plays a key role not only in the economy, but also in the public life of developed companies.
Institutions and Financial Instruments analyses and considers (attempting to link financial practice and theory) the structures and products that drive the financial markets.

Requirements
This course is closely related with the other financial courses (core and majors) but, as it deals with real markets and their current evolution, it uses concepts studied in Management, Marketing, Economics and Law courses...
There are no formal requirements for this course, even though students should have a sound command of law, macroeconomics and finances.

Contents
I. ROLES OF THE FINANCIAL SYSTEM
1. Introduction
2. Types of financial markets
3. Types of financial brokers
4. Roles and objectives of the financial system. Interdependence with the real sector.

II. STRUCTURE OF THE FINANCIAL SYSTEM
1. Historical overview of the financial systems.
2. Current structure of the European and Spanish financial system
3. International financial system

III. ROLES OF THE CENTRAL BANK
1. European Central Bank
2. Bank of Spain
3. Other central banks

IV. CREDIT INSTITUTIONS
1. Banking
2. Saving banks and credit cooperatives
3. Other credit financial establishments
4. European and world panorama

V. OTHER FINANCIAL ENTITIES
1. Insurance companies
2. Collective investment institutions
3. Other financial brokers and ancillaries.
4. European and world panorama

VI. FIXED INCOME
1. Interest rate. Time rate structure.
2. Issuer risk and rating.
3. Interest rate risk. Duration and convexity.
4. Monetary market
5. Capital markets.

VII. VARIABLE INCOME
1. Securities markets
2. Security markets regulatory entities.
3. Stock market indexes.
4. IPO, flotations and privatisations.
5. International investment, globalising process and financial storms: the Tobin tax.
6. Value of the securities regarding capital increases and splits.
7. Technical price analysis.
8. Fundamental price analysis. Most common indexes and ratios.

VIII. DERIVATIVE MARKETS
1. Organised derivative markets (Spanish, European, World)
2. Futures leverage and hedging.
3. Options: types, valuation and determinants
4. Using derivatives.
5. Non-organised markets and OTC products.
6. Interest rate derivatives.
7. SWAPS.
8. Structured products. Guaranteed funds.

IX. FINANCIAL INSURANCES
1. Credit Protection Insurance.
2. Exchange Rate Insurance.

X. MERGERS AND ACQUISITIONS

METHODOLOGY

The teaching method can be divided into three blocks: theoretical-practical explanations by the lecturer of the contents of the course, practical activities and exercise solving by students and work in pairs, some of which are compulsory and some voluntary, which will complement the knowledge acquired in class.

Students are required to read specialist economic press, along with the papers and reports prepared by the leading International Organisations and Public Entities and which are published during the course.

Dialogue and discussion between and among students and the lecturer is a fundamental learning tool and special emphasis is given to participation in class, particularly with respect to the in-class activities.

ASSESSMENT SYSTEM

Term exam: 10%
Assignments: 20%
Final exam: 70%

REFERENCES
The instructor will provide the students with information about readings for group work and to complement class topics.

Further references:

ALONSO, A. (Director), derecho del mercado de valores. Sujetos, mercados y operaciones, , 1997, McGRAW-HILL, MADRID
BANCO DE ESPANA, Instrumentos derivados de los tipos overnight: call money swaps y futuros sobre fondos federales, DOCUMENTO TRABAJO (9901), 1999, BANCO DE ESPANA, MADRID
BENNION, M., Modeling customer response in a european industrial commodity market, CAHIERS DE RECHERCHE (13), 1993, CREA, NANTES
BINSWANGER, M., STOCK MARKETS, Speculative bubbles and economic growth, new dimensions in the co-evolution of real and financial market, , 1999
BLANCO ESCOLAR, R., El mercado español de renta variable. Análisis de la liquidez e influencia del mercado de derivados, ESTUDIOS ECONOMICOS (66), 1999, BANCO DE ESPANA, MADRID

Recommended websites:

www.cnmv.es
www.mineco.es
www.bolsasymercados.es
www.ecb.int
www.bde.es
www.euronext.com
www.imf.org