COURSE SPECIFICATION

NAME OF COURSE: Money and Banking STATUS (main, optional,

Free Choice): main for major and minor

COURSE CODE: ECON 290 UNIT VALUE: 4 credit hours TERMS TAUGHT: Spring term of each academic year

LEVEL: (F,A,P,1,2,3,M) Level 1

Department offering course: Economics

Course Co-ordinator: Elma Agic-Sabeta

Date of course commencement:

Degree Programmes in which to be offered: Economics, Information Systems with Minor in Economics, Electrical Engineering Pre-requisites: Microeconomics, Macroeconomics, Mathematics Indicate whether a new course or name of course being replaced: New course Total Contact Hours: 90 Lectures: 60 Tutorials: 30

AIMS OF THE COURSE: This course is a general Money and Banking course which teaches students about the organization of financial systems, focusing on banking, and the interaction between financial systems and the macro-economy. In particular, this course examines financial instruments, financial institutions (primarily banks), and financial markets and their regulation. The mechanisms and objectives of monetary policy are also examined. Final lectures include basic interpretation and evaluation of financial performance of companies. Due to fact that book covers U.S. and developed financial markets mostly, the lectures contain descriptions of local financial market specifics.

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INTENDED LEARNING OUTCOMES By the end of the course the students will be able to: 1. Describe financial markets and the primary financial instruments 2. Demonstrate an understanding of interest rates structure. 3. Identify the key means by which the economy can affect interest rates. 4. Explain the theoretical foundations and importance of stock market efficiency.

LEARNING AND TEACHING STRATEGIES TO BE USED: 1. Lectures with examples and data from well developed and developing financial markets. Class discussions. 2. Tutorials will handle both qualitative and quantitative issues, depending on the subject. Tutorials will involve students more intensively.

ASSESSMENT CRITERIA (SHOULD LINK EXPLICITLY TO INTENDED LEARNING OUTCOMES): 1. EXAMS (60%): Mid-term exam (20%). A comprehensive final exam (40%) 2. QUIZZES (20%): Two announced quizzes will be given during the course of the semester. Each quiz will count 10%. 3. PARTICIPTION&HOMEWORK (10%): Students homework and participation in class discussions will be assessed. 4. PROJECT (10%): Students will be assigned to work on individual or group projects.

TRANSFERABLE SKILLS AND OTHER ATTRIBUTES 1. Calculate rate of returns of primary financial instruments. 2. Articulate an understanding of monetary policy and the impact it has on the economy. 3. Perform basic financial evaluation of company performance. 4. Ability to critically read and analyze financial news and reports

LEARNING AND TEACHING STRATEGIES USED:

1. Lectures with examples and data from well developed and developing markets. Class Discussions. 2. Tutorials will handle both qualitative and quantitative issues, depending on the subject. Tutorials will involve students more intensively. financial markets. Class discussions. 3. Tutorials will handle both qualitative and quantitative issues, depending on the subject.

ASSESSMENT CRITERIA (SHOULD LINK EXPLICITLY TO INTENDED LEARNING OUTCOMES): 1. EXAMS (60%): Mid-term exam (20%). A comprehensive final exam (50%) 2. QUIZZES (20%): Two announced quizzes will be given during the course of the semester. Each quiz will count 10%. 3. PARTICIPTION&HOMEWORK: Students homework and participation in class discussions will be assessed. 4. PROJECT (10%): Students will be assigned to work on individual or group projects.

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COURSE OUTLINE/SYLLABUS: Part I: Money and Financial System 1. Money, Banking, and Financial Markets: An Overview. 2. Money: Its Nature, Functions, and Evolution. Part II: Financial Markets, Institutions, and Interest Rates. 3. Financial Markets and Instruments. 4. Financial Intermediation. 5. Interest Rate Determination. 6. The Term Structure and Risk Structure of Interest Rates. 7. The Stock Market. 8. The Foreign Exchange Market. Part III: Banking: Structure, Regulation, and Deposit Insurance. 9. Commercial Banking. 10. The Banking Industry: Its Evolution, Structure and Regulation. 11. The Economics of Banking Regulation and Deposit Insurance. Part IV: Central Banking, the Federal Reserve, and the Money Supply Process. 12. Federal Reserve, European Central Bank and Currency Board principle in BH 13. The Deposit Expansion Process: The Simple Analytics. 14. History of Financial crisis and role of Central Banks. Part V: Central Banking Policy and Economic Activity. 15. The Tools of Federal Reserve Policy. 16. Conducting Monetary Policy: Ultimate Goals and Intermediate Targets. 17. The Aggregate Demand-Aggregate Supply Model. 18. Inflation Targeting Part VI: COMPANIES FINANCIAL PERFORMANCE 19. Interpreting Financial Statements 20. Evaluating Financial Performance

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KEY TEXTS AND/OR OTHER LEARNING MATERIALS: Recommended Texts: Thomas Lloyd, Money, Banking, and Financial Markets,1st Edition, 2006, Thomson-Southwestern. Robert C. Higgins, Analyses for Financial Management, 5th Edition, 1998, (two Chapters)

Additional Reading: Financial and Economics magazines and reports, Central Banks Reports and Statistics,

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