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; and 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 relationship between financial markets in the U.S. and abroad is examined, as are the fundamentals of international finance and exchange rates. 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 the banking crises, the business cycle, regulation, deregulation, inflation, deflation, and so on.

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.
  1. The basics of the U.S. money and capital markets
  2. The fundamentals of interest rates and bond pricing.
  3. How banks work and influence the economy.
  4. 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.
  5. Elements of managing financial institutions.
  6. How and by whom financial institutions and markets are regulated, recent changes in regulation (deregulation), and the structure of the regulatory agencies.
  7. The fundamentals of international finance and exchange rates and how domestic and foreign financial markets are interrelated.
  8. The importance and organization of the Federal Reserve .
  9. The tools and operation of monetary policy.
  10. How the Fed influences the economy through monetary policy.
  11. Problems caused by monetary instability and Fed responses.
  12. Current financial and monetary issues, e.g., bank failures, deflation, inflation, unemployment.

Pedagogy
Lectures and class discussion; reading assignments; a few homework assignments.

Examinations
A mid-term and a final examination.
 

Quizzes:

7 short quizzes at end of all but first and midterm classes.

Grade:

Mid-term 35 %

Final Examination 50 %

Quizzes 10 %

Homework 5 %

Total 100 %
Reading Assignment

Finance Department

Professor Kaufman Homepage

 

 

Masters in Business AdministrationGraduate School of BusinessLoyola University Chicago

 

 

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