Minor Money and Banking

Categorie
Verbredende minor
Code
MINRSM044
Tijdsduur
10 weken

Content

The goal of this minor is to provide students with the key concepts that are critical to understanding how the financial system, the banking system, the money supply process and monetary policy work. Some of the questions addressed in this course are:

  • What is money and how is it created in the financial system?
  • How do capital and money markets work?
  • How are interest rates on different bonds determined?
  • What is the role of commercial banks and central banks?
  • Why and how are banks regulated?
  • Why can financial crises have such devastating consequences for the real economy?
  • How do central banks implement conventional and unconventional monetary policy?
  • How does monetary policy transmit to the real economy?

All these questions will be discussed in the context of current developments in financial markets and economic policies. A special emphasis will be put on recent academic and policy debates. For example,

  • What are the pros and cons of very low interest rates for the banking system and the economy as a whole?
  • How do unconventional measures such as quantitative easing work?
  • Can cryptocurrencies such as Bitcoin or Libra take over the role of traditional fiat money?

Learning objectives

Following this course, students are able to…

Compare the financial system of different countries
Illustrate the functions of money, financial intermediaries and the money supply process
Analyze moral hazard and adverse selection problems in financial markets using a formal model, and how these frictions can be overcome by financial intermediaries
Discuss the inherent instability of banking in a formal model and how it is addressed by financial regulation
Investigate the build-up, the evolution and amplification mechanisms of financial crises throughout history using different models of financial crises
Discuss the function of central banks and how monetary policy affects the real economy through different channels in a domestic and international context
Calculate relevant concepts around interest rates including present value, yield to maturity, expected return, the risk- and term-structure of interest rates, as well as the difference between nominal and real interest rates

Special aspects

It is a major goal of this minor to make the theory and discussion directly applicable to the real world. Every class will strive to show students how the material covered in each session is directly relevant to them, and discussed in the context of recent developments in financial markets and economic policy.

This course is aimed at a wide population of students from a multitude of backgrounds.

The required skills for the course are:

  • Basic skills in math (e.g., solving equations)
  • Basic skills in statistics and econometrics (e.g., interpreting coefficient estimates from a regression)
  • Good knowledge of English
  • Basic knowledge of corporate finance, accounting and macroeconomics (appreciated but not necessary)

All RSM minors have mandatory attendance.

Overview content per week 

Lecture 1: An Overview of the Financial System
Lecture 2: Money and interest
Lecture 3: The risk- and term-structure of interest rates
Lecture 4: How banks work
Lecture 5: Bank fragility and financial regulation
Lecture 6: Financial crises
Lecture 7: Monetary policy implementation
Lecture 8: Monetary policy transmission
Lecture 9: The international financial system and monetary policy

Teaching methods

The course consists of interactive lectures which students need to prepare for by studying teaching materials.  The lectures are complemented with on-demand videos. There are three group assignments which students present in class. Students also need to participate in a game about financial regulation.

Teaching materials

  • "The Economics of Money, Banking, and Financial Markets, 12th Global Edition” by Frederic S. Mishkin (ISBN 9781292268859)
  • Selected scientific articles

Examination

Method of examination

  • Final written test (open questions)
  • Three written group assignments and presentations
  • Participation in financial regulation game.

Composition of final grade

Final Grade = 0.3 × (Averaged Assignment Grade) + 0.7 × (Written test Grade)

In order to obtain a grade you need to score at least 4.5 on the written test. In order to pass the course a score of 5.5 is required for the overall final course grade. There is no minimum number of points required for the assignments. Failure to participate in the game reduces the overall assignment grade by 1 grade point.

There will only be a re-sit for the written test.

Feedback
In class feedback, office hours, and written feedback on assignments.

Contact information

Robin Döttling
doettling@rsm.nl 
+31 10 4082748 
room: T8-46 (Mandeville)

Categorie
Verbredende minor
Code
MINRSM044
Tijdsduur
10 weken
Organisatie
Rotterdam School of Management, Erasmus University
Studiepunten (EC)
15
Voertaal
Engels
Locatie
Campus Woudestein, Rotterdam

Registration

Please read the application procedure for more information.