Course content

1. Theories of financial intermediation
2. Financial institutions: Banks, mutual funds, pension funds and insurance companies
3. Euromarkets
4. Financial instruments: bonds, futures, options, swaps
5. Interest risk management: term structure of interest rates
6. Liquidity risk management: liquidity coverage ratio, net stable funding ratio
7. Credit and counterparty risk management
8. Basic concepts: risk measures and stress testing

Learning outcome

Knowledge:

• Students will have an overview of financial institutions and their operational role in the financial markets
• Students will understand how key risk exposures for financial institutions are measured and assessed
• Students will have gained an understanding of key challenges affecting financial institutions in the context of regulatory frameworks, e.g. Basel III
• Students will have an overview of aspects of financial regulation regarding interest- and liquidity risk management, credit risk and counterparty risk

Skills:

• Students will be able to apply simple risk measurement techniques
• Students will develop their analytical skills, via case studies and related exercises

General competence:

• Through their knowledge and enhanced vocabulary of concepts within financial regulation, the students will be able to follow and assess developments in the field as reported in financial news and elsewhere

Learning methods and activities

Lectures, case work, problem solving

Compulsory assignments

• Mandatory group project with 3-4 students

Specific conditions

Recommended previous knowledge

Basic courses in finance, economics and statistics

Course materials

Mishkin, F.S. and Eakins, S.G., Financial Markets and Institutions, (Latest global edition), Pearson Higher Education. Exact edition will be confirmed as the course commences.

In addition, Pilbeam, K., Finance and Financial Markets, Palgrave Macmillan might be consulted.

There will also be additional handouts.

Credit reductions