George G. Kaufman
FINANCE 451: FINANCIAL MARKETS AND INSTITUTIONS

 

 

 

 

 



Catalog Description
Introduction to the external financial environment within which individuals and organizations operate.  Topics include the nature and function of financial institutions, markets, and instruments; the determinants and mathematics of interest rates and bond prices; the management of financial institutions; bank safety, regulation, and deregulation; the Federal Reserve and monetary policy.

Detailed Description
This course introduces students to the financial system in the United States.  It discusses the fundamentals and role of money and capital markets, including the institutions operational in the markets, the instruments being traded, and the organization and regulation of the markets.  Particular attention is devoted to commercial bank management, structure, and regulation, including the development of public policy towards banking, and to the globalization of financial markets. The organization, functioning and operation of the Federal Reserve System and the way that it interacts with the private financial sector through regulatory and monetary policies are analyzed.  The theories developed in the class are brought to bear on current and recent financial and monetary problems, such as bank failures, the financial crisis of 2007-09, and inflation. The ethical dimensions of financial institution management are introduced and the short and long-run implicational analyzed. The focus is on developing responsible financial managers and leaders.

Materials Used
A basic textbook, study guide, plus supplementary handouts on current developments

What the Student "Takes-Away" from the Course

  1. An understanding of the U.S. financial system.
  2. The basics of the U.S. money and capital markets
  3. The fundamentals of interest rates and bond pricing.
  4. How banks work and influence the economy.
  5. The differences between different types of financial institutions, e.g., commercial banks, savings and loan associations, pension funds, insurance companies, mutual funds and so on.
  6. Elements of managing financial institutions.
  7. How and by whom financial institutions and markets are regulated, recent changes in regulation (deregulation), and the structure of the regulatory agencies.
  8. How ethical behavior impacts financial decision making and performance.  
  9. The fundamentals of international finance and exchange rates and how domestic and foreign financial markets are interrelated.
  10. The importance and organization of the Federal Reserve.
  11. The tools and operation of monetary policy.
  12. How the Fed influences the economy through monetary policy.
  13. Current financial and monetary issues, e.g., financial market turmoil and bank failures.

Pedagogy
Lectures and class discussion; reading assignments; a few homework problems; visit to the Federal Reserve Bank of Chicago

Examinations
A mid-term and a final examination.
 

Quizzes:

Seven (7) short quizzes at end of all but first, midterm, and final exam classes.

Grade:

Mid-term 30 %

Final Examination 40 %

Quizzes 25 %

Homework 5 %

Total 100 %
Reading Assignment

Finance Department

Professor Kaufman Homepage

 

 

Masters in Business AdministrationGraduate School of BusinessLoyola University Chicago

 

 

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