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Money and Banking - EC 120 OL2 - Course Syllabus

Money and Banking - EC 120 OL2 - Course Syllabus

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View Course: https://learn.uvm.edu/courselistsummer/course.php?term=201206&crn=60530

Commercial and central banking with special attention given to the Federal Reserve system, monetary theory, and policy. Prerequisite: 11, 12 or instructor permission.
View Course: https://learn.uvm.edu/courselistsummer/course.php?term=201206&crn=60530

Commercial and central banking with special attention given to the Federal Reserve system, monetary theory, and policy. Prerequisite: 11, 12 or instructor permission.

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03/17/2013

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Money and Banking
 –
Econ 120Summer 2012Professor Shirley Gedeon, PhD
NOTE TO SUMMER ONLINE STUDENTS
: This course covers the same material that Icover during the 14-week semester. I have produced dozens of video lectures thatcapture much of what tra
nspires in the classroom. You see the “blackboard work” and
hear my lectures. Everything is contained within the Blackboard website. Thesignificant difference is that there are weekly homework assignments rather than exams.Shirley.gedeon@uvm.edu Office Hours: by appointment - just send an email request)Required Texts:1. Frederic Mishkin,
The Economics of Money, Banking, and Financial Markets 
,
9thedition.
(Available used, new, or as an online book -
but be sure that youpurchase
 
the 9th edition).
 2. Simon Johnson and James Kwak, 13 Bankers (Available new, used, or e-book)3.
Recommended:
David Hakes and Edward Gamber,
Study Guide for The Economics of Money, Banking, and Financial Markets (be sure that you purchase the 9th edition)
 Course Requirements:
Week I: Financial Markets and Institutions 
 Mishkin, Chs. 2
 –
6 Homework Set DueDiscussion Posting Due
Week II: Business of Banking 
 Mishkin, Chs. 8 - 10 Homework Set DueDiscussion Posting Due
Week III: Financial Regulation and Structure of Banking Industry 
 Mishkin, Chs. 11-12 Homework Set DueDiscussion Posting Due
Week IV: Monetary Policy: The Tools and Policies of the Central Bank 
 Mishkin, Chs. 13-14 Homework Set DueDiscussion Posting Due
Week V: Tools & Conduct of Monetary Policy 
 Mishkin, Chs. 15-16 Homework Set DueDiscussion Posting Due
Week 
VI: AssessingMonetary Policy and theStability of the FinancialSystem
Simon Johnson,
13 Bankers 
and otherassigned readingEssay on Assigned Topic(See Syllabus below)
Course Grade 
: Rather than taking a midterm and final exam, you will be evaluated onthe basis of:
6 homework sets (80% of grade)
Quality of discussion posts on and quality of your comments and responses toother students' posting (20% of grade)
 
 
Syllabus
Week I: Financial Markets and Institutions 
In this section you will learn about the sort of short and long term financialinstruments that are traded daily around the world. These include such shortterm (money market) instruments as repurchase agreements, commercial paper,bankers acceptances, and negotiable CD's as well as long term (capital market)instruments such as corporate and government bonds. You will also learn aboutthe major financial intermediaries which buy and sell these instruments. Theseinclude insurance companies, commercial banks, pension funds, governmentsponsored enterprises such as Fannie Mae, and mutual funds.Reading Assignment:1. Mishkin Chs. 2
 –
62.
Instruments of the Money Market 
(Under "Assigned Reading" on left-handmenu of course website)
 
Repurchase Agreements
 
Commercial Paper
 
Bankers' Acceptances
Week II: Business of Banking 
 In this section you will learn how to read the balance sheets of commercialbanks, analyze return on assets and return on equity, and discuss the majorchallenges that banks face, namely interest rate risk and liquidity risk. You willalso be introduced to the various instruments that banks trade to hedge this risk,including credit default swaps, collateralized debt obligations, and asset basedsecurities.Reading Assignment:1. Mishkin Chs. 8
 –
102.
Profits and Balance Sheet Developments of Commercial Banks 
, Federal
Reserve (find under “Assigned Readings” on Blackboard
Week III: Financial Regulation and Structure of Banking Industry 
 –
3/12 
 –
16 
In this module you will study the various laws and regulations in place in theUnited States that govern the kinds of risk that financial institutions may take.You will also explore the causes of the 1980's savings and loan crisis and whybanks were so intent on financial innovation and repealing the Glass SteagallAct.Reading Assignment:1. Mishkin, Chs. 11 and 122. Simon Johnson, 13 Bankers, Chs. 1 - 43. Ben Bernanke, "Financial Regulation and Supervision after the Crisis:The Role of the Federal Reserve, Oct. 2009
 
 
Recommended 
Week IV: Monetary Policy: The Tools and Policies of the Central Bank 
In this section you will learn about the money multiplier and how the centralbank controls the monetary base. This section introduces the monetary baseand discusses how the Fed adjusts its balance sheet to change the moneysupply. You will examine the balance sheet of the central bank and learn aboutthe emergency tools that the Federal Reserve created in order to provide lenderof last resort assistance during the 2007-09 economic crisis.Required Reading:1. Mishkin, Chs. 13 & 142.Credit and Liquidity Programs of the Federal Reserve http://www.federalreserve.gov/monetarypolicy/bst.htm
Week V: Tools & Conduct of Monetary Policy  
 
How is monetary policy conducted? How does the Federal Open MarketCommittee decide whether to try to raise or lower short term interest rates? Inthis part of the course you will study the federal funds market, Taylor rule, learnabout the various lender of last resort actions that the Fed took during thefinancial crisis, and consider the merits of inflation targeting.Reading Assignment:1. Mishkin Chs. 15 & 16
2.
Instruments of the Money Market,
 
Chapters on Discount Window andFederal Funds Market
 
3."Term Asset-Backed Securities"of the Federal Reserve
Part VI: Assessing Monetary Policy and the Stability of the FinancialSystem 
What caused the economic crisis of 2007-09? Where are the fault lines in thefinancial system? What have we learned from the economic crisis of 2007-09?What are fundamental challenges that financial systems face, and which arespecific to finance in the late 20th/early 21st centuries? Do economies needmore or less regulation? Is the global financial system inherently unstable?These are the kinds of questions that we pursue during the final week of thecourseReading Assignment:1. Simon Johnson & James Kwak,
13 Bankers 
 2. Professor Richard Wolff, 
Capitalism Hits the Fan .(This is a video which you can check out from the UVM media library in the basement of B/H or you can watch it on Youtube)
 3.
Inside Job (DVD) - recommended 
 

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