Money, Banking and Finance

Description

This course offers a broad, theory-based introduction to modern finance. The aim is to equip students with a general understanding of financial markets, institutions, products, and the various mechanisms that ensure the day-to-day operation of the financial sector. Finance is essential for the smooth functioning of the real economy. In this course, we will study, discuss, and critically think about the variety of ideas and economic principles that shape the evolution of the financial services industry and its relation to other businesses, ensuring that finance can benefit broader society. By the end of the course, students will be able to demonstrate a sound understanding of the economic and societal roles of financial institutions and reflect on various present-day issues related to financial markets. Ethics, Responsibility, and Sustainability (ERS) related objectives This course is deliberately framed through an Ethics-Responsibility-Sustainability (ERS) lens: it begins by positioning corporations and financial institutions within society’s fabric, questioning whose interests they serve and spotlighting externalities, climate-transition risks and systemic fragility as ethical challenges. Using ERS-related examples, by the end of this course, the student: Is aware of the social purpose of corporations and banks, recognizing the externalities of profit maximization, excessive leverage, aggressive payout policies or bank maturity transformation (ERS world-view). Understands how agency costs, climate and social externalities, and financial regulations embed multi-stakeholder safeguards into financial choices; is able to cope with ambiguity arising from multiple equilibria, shifting tax or carbon regimes, and hard-to-measure distress costs. (ERS complexity). Can evaluate capital-structure or payout choices under evolving regulations, ESG constraints, transition-risk scenarios, and shifting societal norms regarding inclusion and equality of access to finance (Future orientation for ERS). Can design and critique governance mechanisms—board composition, incentive schemes, covenants, liquidity buffers—that steer firms and banks toward responsible behaviour; can interpret regulatory tools such as capital-adequacy rules, climate stress tests, deposit insurance and lender-of-last-resort facilities as intentional “responsibility tools” that protect stakeholders and enhance long-run resilience. (Acting for ERS).