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Course Outlines

FMGT 4570

Money and Banking

School School of Business + Media
Program Finance and Financial Planning
Course Credits 5.5
Minimum Passing Grade 50%
Start Date September 07, 2021
End Date November 30, 2021
Total Hours 52
Total Weeks 13
Hours/Weeks 4
Delivery Type Lecture/Lab
Pre-requisites 50% in ECON 2100 and 50% in ECON 2200
CRN 33619

Acknowledgement of Territories

The British Columbia Institute of Technology acknowledges that our campuses are located on the unceded traditional territories of the Coast Salish Nations of Sḵwx̱wú7mesh (Squamish), səl̓ilwətaɁɬ (Tsleil-Waututh), and xwməθkwəy̓əm (Musqueam).

Instructor Details

Name Eddy Fung
E-mail Instructor to provide
Location SE6-315
Office Hours Instructor to provide

Course Description

Emphasizes the economic way of thinking by developing a unifying framework to study money, banking and financial markets. This analytic framework uses a few basic economic concepts to organize your thinking about the determination of asset prices, the structure of financial markets, bank management and the role of money in the economy.

Course Learning Outcomes/Competencies

Upon successful completion, the student will be able to:

  • Justify why financial intermediaries exist, and assess the role of transaction costs and informational asymmetry in financial systems.
  • Outline why the relative importance of financial intermediaries and financial markets is different around the world, and how bank-based systems differ from market-based systems.
  • Analyse how risks affects the return of a risky asset, and hence how risk affects the value of the asset in equilibrium under the fundamental asset pricing paradigms.
  • Assess whether stock prices reflect all available information, and evaluate the empirical evidence on informational efficiency in financial markets.
  • Evaluate the main types of risks faced by banks, and use the main techniques employed by banks to manage their risks.
  • Categorize the key reasons for and against the regulation of banking systems, and evaluate why banks need regulation.
  • Compare the differences between fixed and flexible exchange rates and the consequences on the workings of monetary policy.
  • Evaluate the effects of monetary policy in different exchange rate regimes.
  • Assess the main channels of the monetary transmission mechanism, through which monetary policy have real effects on the economy.

Learning Resources

Frederic Mishkin, Apostolos Serletis, The Economics of Money, Banking and Financial Markets with MyEconLab, 7th Canadian Ed., Pearson.

Evaluation Criteria

Criteria % Comments
Project5
Assignments15
Midterm40
Final Exam40
Total100

Course Schedule and Assignments

Course Schedule

Session Number

Material to be Covered

Reading

1

Why Study Money and Banking

Overview of the Financial System and Money

Chs 1 - 3

2

Understanding Interest Rates

The Behaviour of Interest Rates

Chs 4 - 5

3

The Risk and Term Structure of Interest Rates

The Stock Market, the Rational Expectation and the Efficient Market Hypothesis

Chs 6 - 7

4

Economic Analysis of Financial Structure and Financial Regulation

Chs 8 - 9

5

Banking Industry: Structure and Competition

Financial Crises

Chs 10 -11

6

Banking and the Management of Financial Institutions

Risk Management with Financial Derivatives

Chs 12 -13

7

Midterm

8

Central Banks and the Bank of Canada

The Money Supply Process

Chs 14 - 15

9

Tools of Monetary Policy

The Conduct of Monetary Policy

Chs 16 -17

10

The Foreign Exchange Market

The International Financial System

Chs 18 - 19

11

Quantity Theory, Inflation and the Demand for Money

The Monetary Policy and Aggregate Demand

Chs 20 & 22

12

Role of Expectations in Monetary Policy

Transmission Mechanism of Monetary Policy

Chs 25 - 26

13

Final Exam

This schedule is subject to change at the instructor’s discretion.

BCIT Policy

Any student who needs special assistance in the event of a medical emergency or building evacuation (either because of a disability or for any other reason) should promptly inform their course instructor(s) and Accessibility Services of their personal circumstances.

Human Rights, Harassment and Discrimination:
The BCIT community is made up of individuals from every ability, background, experience and identity, each contributing uniquely to the richness and diversity of the BCIT community as a whole. In recognition of this, and the intrinsic value of our diversity, BCIT seeks to foster a climate of collaboration, understanding and mutual respect between all members of the community and ensure an inclusive accessible working and learning environment where everyone can succeed.

Respect, Diversity, and Inclusion is a supportive resource for both students and employees of BCIT, to foster a respectful learning and working environment. Any student who feels that they are experiencing discrimination or harassment (personal or human rights-related) can confidentially access this resource for advice and support. Please see Policy 7507 – Harassment and Discrimination and accompanying procedure.

Students should make themselves aware of additional Education, Administration, Safety and other BCIT policies listed at https://www.bcit.ca/about/administration/policies.shtml

Guidelines for School of Business + Media

Attempts:
Students must successfully complete a course within a maximum of three (3) attempts at the course. Students with two attempts in a single course will be allowed to repeat the course only upon special written permission from the Associate Dean. Students who have not successfully completed a course within three attempts may not be eligible to graduate from their respective program.

Attendance:
Regular attendance in lectures and labs is seen as integral to student success, therefore, attendance in class is monitored. Unexcused absences in excess of 10% of the time prescribed for this course may result in the assignment of a failing grade. Attendance may be taken at any time during class. A student not present for attendance will be marked absent. A student who leaves class for a period of time deemed excessive by the instructor may be considered absent regardless of whether they are present when attendance is taken.

In case of illness or other unavoidable absence, students must communicate with the instructor, or the appropriate Program Head, as soon as possible (preferably in advance) indicating the reason for the absence. Students who are seeking accommodation for a medical absence must have a BCIT-approved medical certificate ). For other absences, students must be prepared to provide appropriate supporting documentation.

A student who has unexcused absences in excess of 10% of the time prescribed for the course by the Withdrawal Deadline is considered to have ‘Vanished’ and will be assigned a grade of ‘V’. In these cases, no further work will be graded.

These requirements are set out in accordance with BCIT Policy 5101 Student Regulations. More information regarding withdrawals from PTS courses is available at https://www.bcit.ca/pts/pts_withdrawals.shtml.

Approved

I verify that the content of this course outline is current.
Eddy Fung, Instructor
August 30, 2021

I verify that this course outline has been reviewed and complies with BCIT policy.
Robin Day, Associate Dean
September 06, 2021

Note: Should changes be required to the content of this course outline, students will be given reasonable notice.