Financial Institutions and Markets (N1554)

15 credits, Level 5

Autumn teaching

This module introduces the various types of financial institutions and their role in society including banks, insurance companies and investment managers. It then provides an overview of the major financial markets and products and how these are related to each other and to the institutions introduced earlier. Finally, behaviour of financial institutions and ethical principles of finance are discussed. A provisional outline of lectures, including one revision lecture at the end, is as follows:

  1. Introduction and purpose of module: overview of lectures, textbook, interplay with other courses, finance as an occupation, philanthropy and origins of finance
  2. Commercial banks: origins, adverse selection and moral hazard, operational risks, capital adequacy, regulation, deposit insurance and Sharia/Islamic finance
  3. Investment banks: importance in markets and society, secret of high profit, divisional analysis, shadow finance and leasing
  4. Insurance: origins, life and health, principal-agent problem, AIG blow-up and regulations
  5. Investment managers: 40 Act, mutual funds, hedge funds, private equity and venture capital
  6. Debt markets: term structure, leverage cycle, rating agencies, usury and consumer finance protection
  7. Equity markets: corporations, stock exchanges and capital raising
  8. Real estate:REITs, mortgages, securitisation, boom and bust cycles and specialty finance
  9. Derivatives:options, forwards, futures, arbitrage and hedging risks
  10. Crises and regulation: recent financial crisis, historical perspectives and attempts at regulatory reform
  11. Capitalism and ethics: morality of finance, 'doing God's work' and different political frameworks
  12. Revision

Teaching and assessment

We’re currently reviewing teaching and assessment of our modules in light of the COVID-19 situation. We’ll publish the latest information as soon as possible.

Contact hours and workload

This module is approximately 150 hours of work. This breaks down into about 33 hours of contact time and about 117 hours of independent study. The University may make minor variations to the contact hours for operational reasons, including timetabling requirements.

This module is running in the academic year 2020/21. We also plan to offer it in future academic years. It may become unavailable due to staff availability, student demand or updates to our curriculum. We’ll make sure to let our applicants know of such changes to modules at the earliest opportunity.

Courses

This module is offered on the following courses: