Financial Markets and Institutions

Instructors

MEGURO Katsuyuki

Term / Language / Credits

A1A2 / English / 2

Objectives

This course aims at developing a solid understanding of the basics of financial markets and institutions and the analytical skills required in formulating and implementing financial regulatory policies.
In doing so, the course will cover key theoretical concepts (e.g. financial intermediation, asset transformation, direct vs indirect finance, asymmetric information, moral hazard and principal-agent problem) with emphasis on their applications in the real-world situations.
The course will pay careful attention to global/international aspects of financial businesses and regulations, and to the context of developing/emerging economies with relatively underdeveloped financial systems.
Please note that this course will not focus on central banking and monetary policy.

Keywords

financial intermediation, banking, financial markets, financial regulation

Schedule

A tentative plan is as follows; the final plan will be announced on the first day of the course.
1. Introduction
2. Overview of the financial system
3. Interest rates
4. Bond and stock markets
5. Financial structure
6. Banking and the management of financial institutions
7. Overview of financial regulation
8. Nonbank financial sector
9. Financial derivatives
10. Conflicts of interest in the financial industry
11. Banking and financial crises
12. Globalization of financial businesses

Teaching Methods

Lecture; open-floor discussion.

Grading

The course grade will be based on:
Class attendance and participation 30%
Homework exercises 30%
Final examination 40%

Required Textbook

Mishkin, Frederic S. 2013. The Economics of Money, Banking and Financial Markets, Business School Edition (Third Edition; International Edition). Pearson. (ISBN 9781292040134)
Please note that, while the book has been published in many different editions, the above edition of the book will be used in this course.

Reference Books

Davies, Howard and David Green. 2008. Global Financial Regulation. Polity Press.

Notes on Taking the Course

The course is designed for students interested in public policy issues in the financial industry and financial regulation. Prior knowledge of the subject and related areas would be helpful, but not required.
Some understanding of microeconomics would be an advantage. Basic knowledge of law (i.e. financial, corporate and bankruptcy laws) and/or financial accounting standards would also be helpful.

Related Resources