Course objective:

Overview of the basics of monetary economics, the role of banking, and the activities of the banking sector while taking account of international financial markets. This will be done primarily from an economic perspective. In addition, the institutional organization of various markets will be detailed, and some historical context of the international monetary system will be provided. Ultimately, the goal is to provide a framework for analyzing current and future financial market issues.

Contents:

Review of the demand and supply of money, and the role of banks as financial intermediaries. Review of central banks´policies and their impact on the banking sector, other finance organizations and investors, and ultimately the financial markets. In addition, there will be an overview of international financial markets. Especially with respect to foreign exchange, the interrelations between the more liquid markets will be emphasized.

Literature:

. Mishkin, F.S.: The Economics of Money, Banking and Financial Markets, Addison-Wesley Publishing, 6th edition, 2002. Chapters 1-20 and 24-26.
2. Textbook on international finance (to be determined): From which we will cover the various arbitrage and parity conditions applicable to international finance (e.g., triangular arbitrage and the law-of-one-price, purchasing power parity, covered interest arbitrage, interest rate parity, and the Fisher effects).
3. Articles

Requirements for the credit units (6 ECTS): Exam.

Course material:

• Kihn: Behavioral Finance, Chapter 12