Accounting and Finance

Financial Institutions and Markets (Elective)

Module code: N1634E
Level 4
15 credits in spring semester
Teaching method: Lecture, Seminar
Assessment modes: Computer based exam, Coursework

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

Pre-requisite

Video Submission will come with a Bloomberg Market Concepts Certification 3 component pre-requisite

Module learning outcomes

  • Understand the functions of key financial institutions
  • Evaluate differences between main financial asset classes
  • Describe the role of regulators in the process of monitoring the market
  • Understand concepts of ethical finance in capital markets