Financial Markets and Institutions module (BU32015)
Examine the theoretical foundations of financial intermediation. You will cover the interaction between bank and nonbank financial intermediates
Semester 2
Financial markets and institutions sit at the heart of how modern economies allocate capital and manage risk. You will start with the theory of financial intermediation: why markets and institutions exist, how they transform risk and maturity, and what agency problems arise when information is unequal. You'll then study the structure of money and capital markets, including equity, bond, and foreign exchange markets.
A significant section covers central banking and monetary policy. You'll examine the tools central banks use, how their loss function shapes policy decisions, and how the IS-LM-PC model captures the transmission mechanism.
The module also looks at financial innovation and its associated risks, drawing on real-world examples, and introduces climate finance as a growing area of practice and policy. IT suite sessions and tutorials complement weekly lectures.
What you will learn
In this module, you will:
- Understand the microeconomic rationale for financial intermediation and why financial institutions exist
- Explore the structure and operation of money and capital markets
- Understand how connected markets, instruments, and institutions affect each other
- Examine how central banks use monetary policy to stabilise the economy
- Consider the role of financial innovation, its associated risks, and the growth of climate finance
By the end of this module, you will be able to:
- Explain the microeconomic rationale for financial intermediation and the roles of key market participants
- Describe the structure and operation of money and capital markets, including equity, bond, and foreign exchange markets
- Evaluate the implications of connected markets, instruments, and institutions
- Assess central bank stabilisation policy and evaluate approaches to monetary policy implementation
- Communicate complex financial concepts clearly to diverse audiences and stay current with developments in the field
Assignments / assessments
One-hour timed assessment (40%)
2-hour written exam (60%)
- This will include essay-based and technical questions covering all learning outcomes
Teaching methods / timetable
- Lectures
- Tutorials with problem-solving exercises and discussion
- Workshops with discussion of Financial News
Regular office hours are available with lecturers and tutors for additional support and guidance.
Courses
This module is available on the following courses: