Financial Markets and Institutions

Introduction

Financial markets evolve from interactions of the market participants within the boundaries of market institutions. The objective of this course is to provide an in-depth overview of how financial markets work and how they are used by the different participants: Corporations and governments seeking to raise funds supplied by private and institutional investors in search of return on savings. Understanding the mechanisms by which securities are traded and implications of efficient and liquid markets for bonds, stocks, foreign exchange, and derivatives, are key learning objectives. 

The course addresses the following United Nations Sustainable Development Goals (UN SDGs), which make understanding the functioning of financial markets essential for improving the welfare in the economy:
- Reduced inequalities: Financial markets aim at redistributing resources from the ones that are in excess of funds to the ones that are in need of funds in order to invest them in innovative and viable projects. This risk sharing and redistribution helps to reduce inequality by providing greater opportunities to those with less resources but good ideas.
- No poverty: The reduction of inequality facilitated by financial markets aids to reduce and prevent poverty among the ones who are in need of funds.
- Decent work and economic growth: Ultimately, the efficient redistribution of resources facilitated by financial markets leads to higher economic growth and reduction of unemployment in the economy.

Course content

1. Introduction to Financial Markets
2. Interest Rate Determination and Security Valuation
3. Bond and Mortgage Markets
4. Stock and Foreign Exchange Markets
5. Derivative Securities Markets
6. Financial Institution Risk Management