Unit information: Financial Markets, Institutions and Instruments in 2020/21

Unit name	Financial Markets, Institutions and Instruments
Unit code	EFIM10029
Credit points	20
Level of study	C/4
Teaching block(s)	Teaching Block 1 (weeks 1 - 12)
Unit director	Dr. Pratobevera
Open unit status	Not open
Pre-requisites	None
Co-requisites	None
School/department	School of Accounting and Finance - Business School
Faculty	Faculty of Social Sciences and Law

Description including Unit Aims

The unit provides an introduction to institutional and applied aspects of finance, it’s historical evolution, and the link between the financial sector and the “real” economy.

This unit consists of three components: 1) Financial institutions, markets and participants; 2) Financial history; and 3) Finance and growth. As a foundation to all subsequent units in the programme, the first component will explain the role of the financial sector, describe the participants in financial markets and explain their interaction with financial institutions. Then the unit will turn to financial history to provide a context and an understanding of how financial institutions have evolved. The third section of the unit will describe and explain the role of finance, financial markets and institutions in growth and economic development.

1. The institutions of Finance: Market vs bank-based systems. Banks and other financial intermediaries; Financial exchanges and their regulation; Informational asymmetries and how different financial systems cope with them; Internal vs external sources of finance; and costs to going public; bond and equity markets; How trading is conducted; Derivative assets; Venture capital and private equity; Collective investment vehicles; Introduction to Corporate Governance and Ethics.

2. Financial history: The historical development of lending and its regulation; Types of financial innovation. Securitization; Bubbles and financial crises; The Financial Crisis of 2007-08. The “New Normal” since: QE, low growth.

3. Finance and growth: The role of the financial system in growth and economic development.

Intended Learning Outcomes

Students will be able to:

1. Demonstrate knowledge and understanding of financial history

2. Understand the role of financial systems in growth and development

3. Understand the dual nature of finance as a business discipline and a social science

4. Communicate ideas relating to 1., 2., and 3., in writing.

Teaching Information

Teaching will be delivered through a combination of synchronous and asynchronous sessions including lectures, tutorials, drop-in sessions, discussion boards and other online learning opportunities

Assessment Information

50% - two individual assignments (25% each)

40% - final group essay

10% - class participation

Reading and References

Textbooks: Selected chapters from:

• Mishkin, Frederic S. and Stanley Eakins, Financial Markets and Institutions, Global Ed., 9/E ISBN-10: 1292215003, ISBN-13: 9781292215006, Pearson, 2018;
• Mishkin, Frederic S., The Economics of Money, Banking and Financial Markets, Global Ed., 12/E ISBN-10: 129226885-9, Pearson, 2019.

Books and articles

• Beck, Thorsten, The Role of Finance in Economic Development: Benefits, Risks, and Politics (2011). European Banking Center Discussion Paper.
• Grossman, Richard (2010), Unsettled Account: The Evolution of Banking in the Industrialized World since 1800, Princeton U. Press
• Kindleberger, Charles P., and Robert Z. Aliber (2017), Manias, Panics and Crashes, Palgrave Macmillan
• Kindleberger, Charles P. (2007), A Financial History of Western Europe, Routledge
• Reinhart, Carmen M. and Kenneth S. Rogoff (2009), This time is different: eight centuries of financial folly, Princeton U. Press.