Bangor University
Transfer Abroad Undergraduate Programme
Module Implementation Plan
MODULE: / ACF- 104 Banking and Financial Institutions / LECTURER: / Alasdair MackayINTAKE: / 2012 HAUT / SEMESTER: / 5
ACTIVITY TYPES: / Lecture, presentations, quiz, exam.
Start Date: Nov 03, 2014
End Date: Nov 21, 2014
Year / Semester / Academic weeks / Module Code / Module Name / Credits / Lecture hrs/week / Tutorial Hrs/week/ Weeks
V / 2014 Fall / Week 10~ 12
2014/11/03~2014/11/21 / ACF- 104 / Banking and Financial Institutions / 10 / Mon-Thu: Friday:
Lecture:
0830~1100 0830~0930
Tutorial:
1430~1530 for Group I
1540~1640 for Group II / 5 hours/ week / 3
Course Detail:
This course is designed to provide you with an understanding of the importance of money, banking, and financial markets of a developed economy. Money, financial institutions, and financial markets have emerged as instruments of payments for the services of factors of production, such as labour and capital. The use of money facilitates business in a market by acting as a common medium of exchange. Of course, as that market expands and develops on a national and international level, the importance of money, banking, and other financial markets expands to accommodate innumerable exchanges.
This course will allow you to examine not only the origins and nature of money, but also the institutions and markets that have evolved to enable the exchange of goods and services worldwide. It will provide you with the opportunity to examine the instruments and strategies assisting production, distribution, and consumption. Money and banking institutions are extremely important to the modern economy. The flow of funds (literally trillions of dollars) is indispensable to the production and distribution of all goods and services, both nationally and internationally. Also, this course will help you develop an appreciation for important concepts in economics, from interest rates and central banking to stocks, bonds, and foreign exchange. Finally we will appreciate the risks faced by banks in their daily operations.
Learning Outcomes:
· Upon successful completion of this course, the student will be able to:
· Explain the nature and functions of money.
· Explain the basic purposes of the monetary and financial systems.
· Explain the role of financial markets in the economy.
· Explain the roles of banks and other financial intermediaries.
· Assess the responses of the economy to monetary policy.
· Assess how monetary activities affect an economy.
· Identify the markets for stocks, bonds, derivatives, and currencies.
· Identify how current money is traded for future money.
· Explain the concept “time value of money”.
· Identify the implications, risks, and opportunities of global markets.
· Understand the need for International Banking Regulations
· Identify the financial risks facing Banks.
Assessment:
Assessment Types / Value / DateFinal Exam / 100% / Nov.21st
Week / Activity Type / Scheduled Contact Hours / Activity Details / Core Reading + Additional Reading + Practice Material / Learning Outcomes / Student Preparation for Tutorial
Week 01
Monday
Nov 03 / Lecture / 2.5hrs / “Why Study Money, Banking, and Financial Markets?”
“What is money?”
Link: The Khan Academy's "Banking 1" (Khan Academy). / Frederic Mishkin, Stanley Eakins, (2011), Financial Markets and Institutions 5th Ed., 金融市场与机构(Bilingual Version, 第 5 版), China Renmin University Press. (ISBN: 9787300079929
Articles from various sources available on the internet / Acquire comprehensive understanding of the
banking structures in developed and developing
economies. / Review readings and lecture notes
Tutorial / 1hr / Revisit main concepts of lecture
Question and Answers
Practice problems and questions. (vary between class discussion, short individual writing assignments, group activity followed by short presentation)
Tuesday
Nov 04 / Lecture / 2.5hrs / Discuss the structure of financial markets, explain the importance of financial markets in the economy, and identify financial market participants and the consequences for market failure. Identify and describe some of the more common instruments used in financial markets / Khan Acadamy’s series on Banking and Financial intermediaries.
Link: Chris Martenson’s “Crash Course: Chapter 6— What is Money?” / A comprehensive knowledge of the International markets and their function / Review readings and lecture notes
Tutorial / 1hr / Practice problems and questions. (vary between class discussion, short individual writing assignments, group activity followed by short presentation)
Wednesday
Nov 05 / Lecture / 2.5hrs / What is interest rates?
Explain how interest rates are determined, and given information, identify the type of rate used and/or determine how a rate will change.
Explain why interest rates on securities with the same maturity vary.
Explain why and how interest rates on short- and long-term maturities vary / Link: Professor Campbell Harvey's “Understanding Interest Rates, Part I” / Distinguish between interest rates and returns, nominal interest rate and real interest rate. / Review readings and lecture notes
Tutorial / 1hr / Revisit main concepts of lecture
Question and Answers
Practice problems and questions. (vary between class discussion, short individual writing assignments, group activity followed by short presentation)
Thursday
Nov 06 / Lecture / 2.5hrs / Lending practices, security covenants and rates,
Case study of a| Bank financing. Bonds or shares. Steps to secure and determine the return. / Frederic S. Mishkin’s “Chapter 27: Money and Inflation”Lecture Notes.
/ Identify some of the financial institutions in the economy. Explain how financial intermediaries minimize transaction costs and asymmetric information. / Review readings and lecture notes
Tutorial / 1hr / Revisit main concepts of lecture
Question and Answers
Practice problems and questions. (vary between class discussion, short individual writing assignments, group activity followed by short presentation)
Friday
Nov 07 / Lecture / 1hr / The Bond market. Borrowers and Lenders. The Yield curve. Bond classifications. / Web Media: YouTube: Khan Academy’s “Introduction to the Yield Curve”.
Fredric Mishkin’s chapter 12. / Understand the working of the bond markets in the allocation of capital / Review readings and lecture notes
Tutorial / 1hr / Revisit main concepts of lecture
Question and Answers
Practice problems and questions. (vary between class discussion, short individual writing assignments, group activity followed by short presentation)
Week 02
Monday
Nov 10 / Lecture / 2.5hrs / The Stock market and Commodities market.
Shares and their value, capital and interest.
Income investor “How the stock market works” / Frederic S. Mishkin’s Chapter 13 / Understand the role of the stock market in the allocation of capital. /
Review readings and lecture notes
Tutorial / 1hr / Revisit main concepts of lecture
Question and Answers
Practice problems and questions. (vary between class discussion, short individual writing assignments, group activity followed by short presentation)
Tuesday
Nov 11 / Lecture / 2.5hrs / Foreign Exchange markets
Exchange rates, forward contracts / Frederic S. Mishkin’s “Chapter 20: The Foreign Exchange Market”: / Explain the function of the foreign exchange market.
Discuss the factors that affect the demand and the supply of foreign exchange. / Review readings and lecture notes
Tutorial / 1hr
Wednesday
Nov 12 / Lecture / 2.5hrs / Buy and sell currency. Implication of interest change on costs and reward. Explain how the exchange rate affects the economy. / Khan Academy's "Multiplier Effect and the Money Supply. / Explain the role of central banks in the economy. / Review readings and lecture notes
Tutorial / 1hr / Revisit main concepts of lecture
Question and Answers
Practice problems and questions. (vary between class discussion, short individual writing assignments, group activity followed by short presentation)
Thursday
Nov 13 / Lecture / 2.5hrs / Monetary policy. Explain the role of central banks in the economy. Explain how the central bank controls the money supply.
Identify the goals of monetary policy. / The Khan Academy's "Money and Banking: Discount Rate" / Understand the importance of the Central Bank’s policy to the economy / Review readings and lecture notes
Tutorial / 1hr / Revisit main concepts of lecture
Question and Answers discussion.
Friday
Nov 14 / Lecture / 1hr / “Money supply x velocity” Explain what monetary policy targeting is and why the central bank might choose one target over another.
Explain the effect of monetary policy on the exchange rate / Link: The Khan Academy's "Money and Banking 3: Fractional Reserve Banking". / Explain “Contagion” in the Banking system / Review readings and lecture notes
Tutorial / 1hr / Revisit main concepts of lecture
Question and Answers
Practice problems and questions. (vary between class discussion, short individual writing assignments, group activity followed by short presentation)
Week 03
Monday
Nov 17 / Lecture / 2.5hrs / Brief introduction to Bank’s liquidity, credit,
interest rate and operational risks.” / Frederic S. Mishkin’s Chapter 23: “Risk Management” / Understand the implementation of International Banking Rules (Basel 1&2,111). / Review readings and lecture notes
Tutorial / 1hr / Revisit main concepts of lecture
Question and Answers
Practice problems and questions. (vary between class discussion, short individual writing assignments, group activity followed by short presentation
Tuesday
Nov 18 / Lecture / 2.5hrs / Bank’s liquidity and interest rate risk
“Stress Test” / Frederic S. Mishkin’s Chapter 18: “Financial Regulations”: / Understand the implementation of International Banking Rules (Basel 1&2,111). / Review readings and lecture notes
Tutorial / 1hr / Revisit main concepts of lecture
Question and Answers
Practice problems and questions. (vary between class discussion, short individual writing assignments, group activity followed by short presentation
Wednesday
Nov 19 / Lecture / 2.5hrs / Operational risk and credit risk
“Default risk”. / Frederic S. Mishkin’s Chapter 18: “Financial regulations”: / Understand the implementation of International Banking Rules (Basel 1&2,111) / Review readings and lecture notes
Tutorial / 1hr / Revisit main concepts of lecture
Question and Answers
Practice problems and questions. (vary between class discussion, short individual writing assignments, group activity followed by short presentation
Thursday
Nov 20 / Lecture / 2.5hrs / Revision and Preparation for final exam / Review readings and lecture notes
Preparation for exam.
Tutorial / 1hr / Exam practice questions
Friday
Nov 21 / Three hour final exam (9am-12)