Financial Institutions and Markets (N1634)

15 credits, Level 4

Spring 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, Purpose of Module; Overview of lectures, textbook, interplay with other courses, finance as an occupation, philanthropy, origins of finance.
• 2. Commercial Banks - Origins, adverse selection and moral hazard, operational risks, capital adequacy, regulation, deposit insurance, Sharia / Islamic Finance
• 3. Investment Banks; importance in markets and society, secret of high profit, divisional analysis, shadow finance, leasing
• 4. Insurance; Origins, life and health, principal-agent problem, AIG blow-up, regulations
• 5. Investment Managers; 40 Act, mutual funds, hedge funds, private equity, venture capital
• 6. Debt Markets; Term structure, leverage cycle, rating agencies, usury, consumer finance protection
• 7. Equity Markets; corporations, stock exchanges, capital raising
• 8. Real Estate; REITs, mortgages, securitization, boom and bust cycles, specialty finance
• 9. Securitisation
• 10. Crises and Regulation; recent financial crisis, historical perspectives, attempts at regulatory reform
• 11. Revision

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.

We regularly review our modules to incorporate student feedback, staff expertise, as well as the latest research and teaching methodology. We’re planning to run these modules in the academic year 2024/25. However, there may be changes to these modules in response to feedback, staff availability, student demand or updates to our curriculum.

We’ll make sure to let you know of any material changes to modules at the earliest opportunity.