Principles of banking and finance

Teacher(s)

Dechaene Tom; Iania Leonardo;

Language

English

Prerequisites

None

Main themes

This course is an introductory course to banking and financial markets. The financial market part introduces the main concepts of the current financial system, its main instruments and the risk associated with them. The banking part covers banks architecture, balance sheets and bank’s valuation. Students will have the opportunity to apply the theoretical concepts in empirical assignments.

Aims

At the end of this learning unit, the student is able to :
1	KNOWLEDGE AND REASONING 2.2 Master highly specific knowledge in one or two areas of management: advanced and current research-based knowledge and methods. A SCIENTIFIC AND SYSTEMATIC APPROACH 3.3 Consider problems using a systemic and holistic approach: recognize the different aspects of the situation and their interactions in a dynamic process. WORK EFFECTIVELY IN AN INTERNATIONAL AND MULTICULTURAL ENVIRONMENT 5.2 Understand the international socio-economic dimensions of an organization and identify the associated strategic issues and operational decisions. TEAMWORK AND LEADERSHIP 6.1 Join in and collaborate with team members. Be open and take into consideration the different points of view and ways of thinking, manage differences and conflicts constructively, accept diversity.

Content

• The class mixes - lectures with additional individual readings/exercises and a groups assignment. The content of the course is the following:
  
• Part 1: Introduction to financial markets
  • Bloomberg market concepts® test (all modules except exchange rates).
  • Money and the Financial System:
    • Money and the Payments System;
    • Financial Instruments, Financial Markets, and Financial Institutions.
  • Interest Rates, Financial Instruments, and Financial Markets:
    • Bonds, Bond Prices, and the Determination of Interest Rates;
    • The Risk and Term Structure of Interest Rates;
    • Stocks, Stock Markets, and Market Efficiency;
    • Derivatives: Futures, Options, and Swaps.  
• Part 2: Introduction to banking:
  • An historical perspective;
  • Balance sheet;
  • P&L;
  • Modern architecture / P&L;
  • Ratio;
  • Bank valuation.  

Teaching methods

Due to the COVID-19 crisis, the information in this section is particularly likely to change.

• Lectures
• Teamwork
• Bloomberg market concepts (all modules except exchange rates)

Evaluation methods

Due to the COVID-19 crisis, the information in this section is particularly likely to change.

Continuous evaluation

• Date: No.
• Type of evaluation: No.
• Comments: No

Evaluation week

• Oral: No
• Written: No
• Unavailability or comments: No

Examination session

• Oral: No 
• Written: Yes
• Unavailability or comments: No

Bibliography

• Part 1: chapters 1 to 9 of “Money, Banking, and Financial Markets” Fifth Edition, by Stephen G. Cecchetti and Kermit L. Schoenholtz, Published by McGraw Hill
• Part 2: Lecture notes of the Professor.

Faculty or entity

CLSM