Financial Institutions and Markets

EMEC023S5 (for BSc Financial Economics)
EMEC301S6 (for BSc Economics and Social Policy and BSc Economics and Business)
30 credits
Spring Term

Course Lecturer: George Alexandrou

Aims

The aim of this course is to provide a general introduction to the financial institutions and markets. The UK financial system is used as an illustration in the discussion of the institutional structure of a financial system, but major aspects of other markets and economies are also covered. The course provides a balanced cover of the major aspects in this area.

Objectives

By the end of this course students will understand the basic economic principles and the role of savings and investments in the economy; the function of banks and other financial intermediaries in lending and borrowing; the types of banks and banking activities. Students will also know about the financial markets, the types of traded securities and the faction of the various parties involved. They will also be aware of the function and role of central banks and the governments and the regal and regulatory framework.

Learning Outcomes

On successful completion of this course, students should have a clear understanding of:

• the financial system and its role in mobilising saving and investment;
• the differing requirements of the principal types of end user of the financial system in the personal, corporate and public sectors;
• the roles of the principal types of financial institutions in the retail, wholesale and international banking, building society, and finance house sectors;
• the principal investment institutions: general insurance and life assurance organisations, pension funds, unit trusts, investment trusts and open-ended investment companies;
• the structure and operation of the principal UK financial markets: equity, bond, money, foreign exchange, futures and options markets;
• the relationship between the UK and European financial markets;
• the major issues involved in the regulation of financial markets and the role of the state and the central bank.

Required Reading

Pilbeam, K (2005) Finance and Financial Markets, Palgrave.
Alexandrou, G, Lecture notes.

Other Reading

Bodie, Kane and Marcus (2005), Investments, 6th International Edition, McGraw- Hill.
Valdez S and J Wood (2003), An Introduction to Global Financial Markets, 4th Ed. Palgrave.
Johnson, H (2000), Global Financial Institutions and Markets, Blackwell.
Blake, D (2000), Financial Market Analysis, Wiley, Chichester.
Howel, P and K Bain (2002), The Economics of Money, Banking and Finance, 2nd Ed, FT Prentice Hall.
Howel, P and K Bain (2002), The Economics of Money, Banking and Finance, 2nd Ed, FT Prentice Hall.
Bain, AD, (1992), The Economics of the Financial System, Basil Blackwell, Oxford.
Barron’s Dictionary of Finance & Investment Terms, IFR Capital Markets.
Balling, M, Financial Management in the New Europe, Basil Blackwell, Oxford.
Brett, M, How to Read the Financial Pages, Century Business, London.
Buckle, M and JL Thompson (1998), The UK Financial System: Theory & Practice, Manchester University Press, Manchester.
Chapman, C, How the Stock Markets Work, Random House Business Books, London.
Cox, D, Success in Elements of Banking, John Murray, London.
Foley, BJ, (1991), Capital Markets, Macmillan, London.
Giddy, I, Global Finance Markets, D C Heath, Lexington.
Gilbody, J, The UK Monetary and Financial System, Routledge, London.
Grosvenor, J and A Belchambers, The British Derivatives Markets Handbook, Ivanhoe Publishing, Oxford.
Handbook of International Financial Terms, (P. Moles & N. Terry, Oxford University Press, Oxford).
Heffernan, S, Modern Banking in Theory & Practice, Wiley, Chichester.
Henderson, R, European Finance, McGraw Hill, London.
Howells, P and K Bain (2002), The Economics of Money, Banking and Finance, 2nd Ed, FT Prentice Hall.
Howells, PGA and K Bain, Financial Markets and Institutions, Longman, London.
Lewis, MK and KT Davis, Domestic and International Banking, Philip Allan, Hemel Hempstead.
Molyneux, P, Banking: An Introductory Text, Macmillan, London.
Pawley, M, D Winstone and P Bentley, UK Financial Institutions and Markets, Macmillan, London.
Piesse, P, K Peasnell and C Ward, British Financial Markets and Institutions, Prentice Hall, London.
Vaitilingam, R, .The Financial Times Guide to Using the Financial Pages, Financial Times Pitman Publishing, London.
Valdez, S (2003), An Introduction to Global Financial Markets.
Walmsley, J, International Money and Foreign Exchange Markets, Wiley, Chichester.
Winfield, RG. and SJ Curry, Success in Investment, John Murray, London.
Walmsley, J, New Financial Instruments, Wiley, New York.

Lecture Schedule

Week 1: The role of a Financial System
Week 2: Money markets
Week 3: The investment process and security trading
Week 4: Bonds and bond markets
Week 5: Equities and equity markets
Week 6: Option markets
Week 7: Commercial banking and investment banking
Week 8: Non-bank financial institutions and Investment companies
Week 9: The regulation of the financial sector
Week 10: Revision

Teaching arrangements

The classes for this course have been rescheduled to the Spring Term. Sessions will be held for full evenings, from 6 to 9 pm on Mondays.

Assessment

A coursework will count for 20% and the June exam for 80% of the overall mark. In June, students will sit a three-hour formal examination based on the overall syllabus which will count for 80% of the course unit mark.