Financial Markets and Institutions

COURSE OBJECTIVE
In the course students develop a deep understanding of financial markets, bank supervision and central banking (Bridging Theory and Practice - knowledge). You learn to analyze real-life applications such as recent central bank and regulatory policies using the concepts from the literature (Bridging Theory and Practice - Application). You solve problem sets (Academic and Research Skills) and form teams to work on case studies (Social Professional Skills).

After the course, you can:
- explain how financial markets and institutions affect everyday life as well as how they create value and why this is the case;
- state stylized facts of the term structure of interest rates;
- describe the structure of the banking sector and banking supervision;
- explain the main risks involved in banking and the most important tools to manage these risk;
- explain the need for regulation of the financial system;
- describe approaches to managing systemic risk and recent developments in the regulatory framework;
- define the principles of monetary policy;
- interpret decisions by central banks on monetary policy and how they affect the financial system and the real economy.

COURSE CONTENT
Financial markets are playing an important role in a modern economy. This course gives students an overview on how the financial system operates and where its weaknesses lie. It is an important building block for understanding our economy and students can connect micro and macro theories to the concepts developed in this course. The course also provides the necessary background for a future career in a financial institution or policy environment.

TEACHING METHODS
Lectures
Tutorials.

TYPE OF ASSESSMENT
Written exam – Individual assessment.
Interim Assignments – Group assessment.

ENTRY REQUIREMENTS
Finance I or equivalent.

RECOMMENDED BACKGROUND KNOWLEDGE
Finance I, Finance II and Corporate Finance.