0201E330 Money and Banking

Course Description

This course covers monetary policy, banking services and bank regulation, as well as the functionalities of financial markets and institutions. Major attention will be given to banking and financial crises, their origins and resolution, looking both at the US and other countries. We look  at  financial structure, financial development and financial crises, with special emphasis on the recent subprime crisis. In addition, we will cover the economics of bank management, along with the effects of the behavior of individual financial institutions on the financial system as a whole and on the economy as a whole.

The course will also cover the theory and practice of monetary policy using the Federal Reserve Bank of the US as our main example. We will cover issues of central bank independence, goals of monetary policy, control of the money supply and tools used  by  central  banks,  currency exchange and issues of tactics and strategy. Consideration will also be given to monetary policy in conditions of deep recession and deflation, quantitative easing and unconventional monetary policy instruments in the most recent crisis. Discussion of money demand and the transmission mechanism is also presented while looking at debates on these crucial issues for central banks.

Required Textbook(s)

The Economics of Money, Banking and Financial Markets, Frederic Mishkin, (The Pearson Series in Economics), 11th Edition (2015). ISBN- 13: 978-0133836790

Prerequisites

0201E102 and 0201E101, or permission of instructor

Course Schedule

Please note that the schedule is meant to give an overview of the major concepts in this course. Changes may occur in this calendar as needed to aid in the student’s development.

Course Materials

. Internet access (use of laptop computers/electronics devices is not permitted during class)

. Calculators: I will use Excel to teach the computations in the class. The students are expected to have Excel installed in their own computer for assignments and exams.

Grading Policy

Your semester grade will be based on homework and exams.

Homework:                                    Five Assignments               8% * 5 = 40%

Exams:                                            Two Exams                       30% * 2 = 60%

TOTAL 100%

Homework and Exams:

There will be five assignments during the semester, one every week. Each assignment counts for 8% of your semester grade. The assignments are due on the Monday of next week. There will be two exams during the semester, each at 30% of the total grade.  The exams will be due on the Thursday of the respective week. All submissions are due at 11:59 am Beijing Time. For each calendar day an assignment is delayed, 20% discount would apply to the grade. For the exams, no late submission will be accepted.