JOHN CABOT UNIVERSITY COURSE CODE: "EC 371" COURSE NAME: "Money, Banking and Capital Markets" SEMESTER & YEAR: Fall Semester 2012

SYLLABUS INSTRUCTOR: Antonelli Alessandro EMAIL: [email protected] HOURS: MW 10:00-11:15 TOTAL NO. OF CONTACT HOURS: 45 CREDITS: PREREQUISITES: Prerequisites: Junior Standing, EC 201, EC 202 OFFICE HOURS: 11:15-12:00 and by appointment

COURSE DESCRIPTION: Provide students with concepts, theories, models, and methodologies necessary to understand: a) how banks work and their main trade-offs between profitability and risk; b) how economic dynamics and people’s lives are significantly affected by the efficiency of money, banks, and capital markets; c) how the policy affects that efficiency. Case studies, short videos, articles, and real life examples are also disseminated throughout the course program, to allow students the additional exploration of national and international implications of banking and capital markets, including those concerning the recent financial crisis, its causes, and the likely reverberations and reforms still to come.

SUMMARY OF COURSE CONTENT: * Fundamentals of Banking * Money and Financial Markets. * Macroeconomics. * Monetary Policy; Regulatory Cooperation; Ethical Issues.

LEARNING OUTCOMES: - Understand the role of banks. - Evaluate main banks products, operations, earnings, performances and risk profiles. - Identify the connections between the banking system and the policies that govern that system. - Realize how those interactions affect our lives and the economy overall. - Know why financial markets and institutions are structured the way they are. - Understand how money affects the economy and how the force of policy steers financial markets. - Know why the financial system takes the present shape and how economic forces can change it. - Be aware of major strengths and weaknesses of the financial system and the world economy, of the existence of important ethical issues, and of the need of substantial structural reforms.

TEXTBOOK: Book Title Author Publisher ISBN number Library Call Number Comments Format Local Bookstore Online Purchase M&B Dean Croushore South-Western 1111823367

REQUIRED RESERVED READING: NONE RECOMMENDED RESERVED READING: Book Title Author Publisher ISBN number Library Call Number Comments Handouts and additional recommended abstracts will be provided during the course. . . .

GRADING POLICY -ASSESSMENT METHODS: Assignment Guidelines Weight a) Exam 1; b) Exam 2 c) Exam 3; d) Presentation e) Class participation Three exams, 80% as follows: first exam 20%; second exam 20%; third exam 40%. These exams will consist of essay-type questions, graphic analysis, as well as some problems that require quantitative analysis, in which the student is asked to explain and/or solve with accuracy and clarity issues of a particular topic covered by the syllabus. Case presentation (8%): the presentation of a case will be assigned by the professor to each student. Students should be prepared to offer an effective oral and written summary of the case and the key facts to the class, and to present their views regarding the possible questions. Class participation (12%): the class participation grade will reflect the student’s attention in attending the class, her or his ability to follow the flow of class discussion, and her or his interventions during class. Unjustified absences will negatively affect the class participation grade. a) 20%; b) 20%; c) 40%; d) 8%; e) 12% -ASSESSMENT CRITERIA:  At the end of the term, students with 95-100 points will receive an A; 90-94 an A-. An “A” grade is reserved for students who consistently submit outstanding work. Work of this quality directly addresses the question or problem raised and provides a coherent argument, displaying an extensive knowledge of relevant information or content. This type of work demonstrates the ability to critically evaluate concepts and theory and has an element of novelty and originality. There is clear evidence of a significant amount of reading beyond that required for the course.  Students who receive 87-89 points will receive a B+; 84-86 a B; 80-83 a B-. A “B” grade is reserved for students who show a highly competent level of performance, and whose work does not suffer from any major errors or omissions.  Students who receive 77-79 points will receive a C+; 74-76 a C; 70-73 a C-. A “C” grade is reserved for students who show an acceptable level of performance, with answers that are clear but limited, with some minor omissions and inaccuracies but no major errors.  Students who receive 67-69 points will receive a D+; 64-66 a D; 60-63 a D-. A “D” grade is reserved to below average students whose work will typically lack a coherent grasp of the problems and issues raised in the question, omit important information, include irrelevant points and generally be too brief or even incomplete.  Students who receive fewer than 60 points will fail. -ATTENDANCE REQUIREMENTS: The University attendance policy is described in the catalogue. Persistent absence or tardiness usually precludes satisfactory performance in the course, and jeopardizes that part of the grade that is based on class presentation and participation. Students are expected to arrive to class on time; students are responsible for all material covered by the syllabus and/or discussed in class, whether or not they are actually present in class.

ACADEMIC HONESTY As stated in the university catalog, any student who commits an act of academic dishonesty will receive a failing grade on the work in which the dishonesty occurred. In addition, acts of academic dishonesty, irrespective of the weight of the assignment, may result in the student receiving a failing grade in the course. Instances of academic dishonesty will be reported to the Dean of Academic Affairs. A student who is reported twice for academic dishonesty is subject to summary dismissal from the University. In such a case, the Academic Council will then make a recommendation to the President, who will make the final decision.

STUDENTS WITH LEARNING OR OTHER DISABILITIES John Cabot University does not discriminate on the basis of disability or handicap. Students with approved accommodations must inform their professors at the beginning of the term. Please see the website for the complete policy.

SCHEDULE

SCHEDULE Part I – Fundamentals of Banking 9/3/2012   Introduction to Money and Banking 9/5/2012   Overview: Banks Organizational Structures, Products, Delivery Channels 9/10/2012 Commercial Bank Financial Statements – The Balance Sheet, The Income Statement; v How Do Banks Earn Profits 9/12/2012 Analyzing Bank Performance - The Return on Equity Model, Profitability Analysis, Expense Ratio and Asset Utilization 9/17/2012 Risk Profiles; Trade-Offs Between Risk and Profitability; Overview: Interest Rate Risk Management 9/19/2012 The Performance of Nontraditional Banking Companies 9/24/2012 Government’s Role in Banking                  Policies: How Today’s Banking System Reflects Yesterday’s Regulation;                  Should Mergers of Big Banks Be Allowed? 9/26/2012 Case Studies: The Savings-and-Loan Crisis; The Credit Crunch of the Early 1990s;                                         The Financial Crisis of 2008 10/1/2011 Exam 1 (Part I – Fundamentals of Banking) Part II – Money and Financial Markets 10/3/2012 Chapter 2 - The Financial System and the Economy 10/8/2012 Chapter 3 - Money and Payments 10/10/2012 Chapter 4 - Present Value 10/15/2012 Chapter 5 - The Structure of Interest Rates 10/17/2012 Chapter 6 - Real Interest Rates 10/22/2012 Chapter 7 - Stocks and Other Assets                                       Data Bank: The Explosion of Tech Stocks in the Late 1990s and Their Implosion in the Early 2000s                                       Application to Everyday Life: Comparing Stocks With Bonds and Other Financial Investments 10/24/2012 Chapter 7 - Stocks and Other Assets                                       Risk Aversion and Portfolio Diversification                                       International Capital Markets 10/29/2012 Exam 2 (Part II – Money and Financial Markets) Part III – Macroeconomics 10/31/2012 Chapter 10 - Economic Growth and Business Cycle                                        Application to Everyday Life: How Does Economic Growth Affect Your Future Income? 11/5/2012 Chapter 11 - Modeling Money 11/7/2012 Chapter 12 - The Aggregate Demand/Aggregate Supply Model 11/12/2012 Chapter 13 - Modern Macroeconomic Models                                         Policy Perspective: Do Modern Macroeconomic Models Have Any Value for Policy? 11/14/2012 Chapter 14 - Economic Interdependence                                         Policy Perspective: How Independent Should a Country Be? Part IV – Monetary Policy; Ethical Issues; Regulatory Cooperation 11/19/2012 Chapter 15 - The Federal Reserve System                                         Policy Perspective: Should the Federal Reserve Be So Independent?                    Chapter 16 - Monetary Control 11/21/2012 Chapter 17 - Monetary Policy: Goals and Tradeoffs  11/26/2012 Chapter 18 - Rules for Monetary Policy                                         Policy Perspective: Why Don't Policymakers Follow Rules?  11/28/2012  Conference, Celebrating JCU 40th Anniversary, Confcommercio Headquarter (Piazza Belli 2)                     Exploring How Legality and Modernity Should Shape New Models of Sustainable Growth 12/3/2012    Monetary Policy and Banks Management of Interest Rate Risk: A Review of GAP and Earnings Sensitivity Analysis; Case Study 12/5/2012    Bank Ethical Issues; Banking and Regulatory Cooperation  Exam 3 (final exam, Part III, Part IV): See university schedule for date/time of this final examination.