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Money and Banking A

Module Code: ECU33021 (old code EC3120)

Module Title: Money and Banking A

  • ECTS Weighting: 5
  • Semester/Term Taught: Semester 1
  • Contact Hours: 22 hours of lectures and 5 hours of tutorials
  • Module Personnel: Lecturer - Professor Agustin Benetrix

Learning Outcomes

On successful completion of this module, you will be able to:

  • Discuss the recent performance of financial markets and government intervention strategies in light of economic theory;
  • Describe recent trends in the organization of the financial industry and recognize the main microeconomic theories of banking;
  • Describe the main financial instruments and the way in which they help redistribute risk between economic agents.

Module Content

The second half of this module is formed by three pillars. The first one will introduce the core principles of banking and present an overview of financial instruments, financial markets and financial institutions. The second pillar will study fundamental concepts such as value and present value, risk and term structure, bonds, interest rate determination, stock markets, market efficiency, derivatives and foreign exchange. We will study how market interest rates are determined. The third pillar will put the focus on the economic theory behind financial intermediaries. We will discuss how the financial system can mitigate problems related to asymmetric information. This part of the module will also cover bank risk management, bank runs and financial crises.

Recommended Reading List

Primary Reading:

  • Cecchetti, Stephen G. and Schoenholtz, Kermit L. Money, Banking and Financial Markets 3rd ed. (McGraw-Hill, 2011)

Additional Readings:

  • Matthews, Kent and John Thompson. The Economics of Banking, 2nd ed. (Wiley, 2008)
  • Feixas, Xavier and Rochet, Jean-Charles. Microeconomics of Banking, 2nd ed. (MIT Press, 2008)

NB: Additional readings will be suggested in lectures

Module Pre Requisite

EC2110 & EC2111 Intermediate Economics and EC2140 & EC2141 Mathematical and Statistical Methods

Module Co-Requisite

ECU33022 Money and Banking B

Assessment Details

15% course work
15% assignment
70% MT examination

Module Website

Blackboard