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JOHN CABOT UNIVERSITY

COURSE CODE: "EC 372"
COURSE NAME: "Financial Institutions and Capital Markets"
SEMESTER & YEAR: Fall 2016
SYLLABUS

INSTRUCTOR: Simona Costagli
EMAIL: [email protected]
 HOURS: MW 7:30PM 8:45PM
TOTAL NO. OF CONTACT HOURS: 45
CREDITS: 3
PREREQUISITES: Prerequisite: FIN 301
OFFICE HOURS:
COURSE DESCRIPTION:
This course covers the structure and role of financial markets and institutions such as commercial banking, investment banking, and major equity, debt, and derivative markets and includes discussion of management, performance, and regulatory aspects. The course also examines the functions of central banks and monetary policy for these financial markets and institutions. Case studies and real life examples are also disseminated throughout the course to allow students the additional exploration of national and international implications of financial markets, including those concerning credit crisis, their causes, and the likely reverberations and regulatory reforms. 
SUMMARY OF COURSE CONTENT:

The course explores how economic theory can be applied to understand the way financial markets and institutions work. After a brief overview on how central banks manage monetary policy, the course provides and in-depth analysis of financial markets (for bonds, stocks, and foreign exchange) and financial institutions (e.g. banks, mutual funds, ...). Specific focus will be devoted to: a) the causes and consequences of the 2007 financial crisis in the US; b) the bank consolidation process in the US (which started with the repeal of the Glass Steagall Act) and its implications on the current US financial sector; c) the newly born Eu-28 Banking Union and the “Bail in” system recently put in place in the European Union. 

 

The instructor will hand out (or direct students to) additional readings on macroeconomic issues.

Materials on the course will be posted on my jcu web page.
LEARNING OUTCOMES:
  • To understand how financial markets facilitate the flow of funds, the types of securities traded within financial markets, the role of financial institutions within financial markets.
  • To evaluate main financial institutions products, operations, earnings, performances and risk profiles.
  • To develop the ability to understand financial media news.
  • To understand the major strengths and weaknesses of the financial system the world economy, the existence of important ethical issues, and the need for substantial structural reforms.
  • To learn to read data and evaluate sources of economic data.
  • To locate data sources and prepare visual presentations of a topic that demonstrates ability to properly document materials and convey information clearly and ethically.
TEXTBOOK:
Book TitleAuthorPublisherISBN numberLibrary Call NumberCommentsFormatLocal BookstoreOnline Purchase
FINANCIAL MARKETS AND INSTITUTIONS (8th edition)Mishkin. EakinsPearson978-1292060484     
REQUIRED RESERVED READING:
NONE

RECOMMENDED RESERVED READING:
NONE
GRADING POLICY
-ASSESSMENT METHODS:
AssignmentGuidelinesWeight
Class participation/debates/exercises 10%
Exam 1 30%
Exam 2 (comprehensive) 40%
   
ProjectThe project assigned has the objective to: • find and document information; • use information that is relevant to illustrate the question/issue of concern; • present information in tables, charts, graphs that are visually easy to understand and properly documented; • test the student’s ability to summarize (and clearly present) the key elements of an issue in an oral presentation, so also showing that he/she has understood the underlying details of the issue; • develop an outline for a lecture; • make appropriate use of empirical information Provide a 10-12 Power Point slides visual presentation, lecture outline, and bibliography. Presentations will consist in a debate between two groups of students (max. 2 students each group). The groups will face each-other sustaining opposite views on the same issue. Each group is supposed to: 1) present its view using ppt (or other supports like prezy); 2) question and discuss the other group’s view; 3) answer the professor/audience questions on the issue. 20%

-ASSESSMENT CRITERIA:
AWork 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 cours
BThis is highly competent level of performance and directly addresses the question or problem raised.There is a demonstration of some ability to critically evaluatetheory and concepts and relate them to practice. Discussions reflect the student’s own arguments and are not simply a repetition of standard lecture andreference material. The work does not suffer from any major errors or omissions and provides evidence of reading beyond the required assignments.
CThis is an acceptable level of performance and provides answers that are clear but limited, reflecting the information offered in the lectures and reference readings.
DThis level of performances demonstrates that the student lacks a coherent grasp of the material.Important information is omitted and irrelevant points included.In effect, the student has barely done enough to persuade the instructor that s/he should not fail.
FThis work fails to show any knowledge or understanding of the issues raised in the question. Most of the material in the answer is irrelevant.
-ATTENDANCE REQUIREMENTS:
ATTENDANCE REQUIREMENTS AND EXAMINATION POLICY
You cannot make-up a major exam (midterm or final) without the permission of the Dean’s Office. The Dean’s Office will grant such permission only when the absence was caused by a serious impediment, such as a documented illness, hospitalization or death in the immediate family (in which you must attend the funeral) or other situations of similar gravity. Absences due to other meaningful conflicts, such as job interviews, family celebrations, travel difficulties, student misunderstandings or personal convenience, will not be excused. Students who will be absent from a major exam must notify the Dean’s Office prior to that exam. Absences from class due to the observance of a religious holiday will normally be excused. Individual students who will have to miss class to observe a religious holiday should notify the instructor by the end of the Add/Drop period to make prior arrangements for making up any work that will be missed. The final exam period runs until ____________
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


Week 1:

Aug 29 – Why study financial markets and institutions?

Aug 31 - Chapter 2 Overview of the Financial System

Week 2: 

Sep 5 - Chapter 9 Central Banks and the Federal Reserve System

Sep 7 - Chapter 10 Conduct of Monetary Policy: Tools, Goals, Strategy and Tactics

Week 3:

Sep 12 - Chapter 10 Conduct of Monetary Policy: Tools, Goals, Strategy and Tactics

Sep 14 - Chapter 7 Why Do Financial Institutions Exists?

Week 4:

Sep 19 - Chapter 3 What Do Interest Rates Mean and What Is Their Role in Valuation?

Sep 21 - Chapter 3 What Do Interest Rates Mean and What Is Their Role in Valuation?

Week 5:

Sep 26 - Chapter 4 Why Do Interest Rates Change?

Sep 28 - Chapter 5 How Do Risk and Term Structure Affect Interest Rates?

Week 6:

Oct 3 - Chapter 11 The Money Markets

Oct 5 - Review (1-2-3-4-5-7-9-10-11)

Week 7:

Oct 10 - Exam 1: Chapters (1-2-3-4-5-7-9-10-11)

Oct 12 - Chapter 12 The Bond Market

Week 8:

- Oct 17 – Chapter 13 The Stock Market (Project assignment)

- Oct 19 – Chapter 15 The Foreign Exchange Market

Week 9:

- Oct 24 - - Chapter 16 The International Financial System

- Oct 26 -Chapter 17 Banking and the Management of Financial Institutions

Week 10:

- Oct 31 – Chapter 18+ Chapter 8

- Nov 2 - Chapter 20 The Mutual Fund Industry

Week 11: 

Nov 7 - Chapter 22 Investment Banks, Security Brokers and Dealers, and Venture Capital Firms

Nov 9 – Project presentations

Week 12:

Nov 14 – Project presentations

Nov 16 - Chapter 23 Risk Management in Financial Institutions

Week 13: 

- Nov 21 - Chapter 24 Hedging with Financial Derivatives

- Nov 23- Chapter 24 Hedging with Financial Derivatives

Week 14:

Nov 28 - Review

Nov 30 - Review

Final exam: Comprehensive. See the University schedule for date and time.