Program Overview

ECON2035 – The Economics of Financial Institutions

Unit Description

This unit provides an overview of current operations of the Australian and global financial systems and the management of financial institutions. The unit also covers financial sector crises and the lessons learnt. Topics may include the objectives and performance of financial institutions, risks and their controls, asset and liability management, credit evaluation, capital adequacy and regulations, informal money lenders and microfinance institutions, and shadow banking.

General Information

• Unit convenor and teaching staff: Ha Vu
• Credit points: 10
• Prerequisites: (ECON1020 or ECON111) and (ECON1021 or ECON110)
• Corequisites: None
• Co-badged status: None

Learning Outcomes

On successful completion of this unit, you will be able to:

• Identify and describe the operation and management of banks and other types of financial institutions.
• Identify, define and analyse problems associated with financial markets and recommend creative solutions within real-world contexts.
• Demonstrate a capacity to work independently, including the ability to research, form challenging and coherent arguments, and write short-discussion pieces.

General Assessment Information

• Late Assessment Submission Penalty: A 5% penalty (of the total possible mark) will be applied each day a written assessment is not submitted, up until the 7th day (including weekends). After the 7th day, a grade of '0' will be awarded even if the assessment is submitted.

Assessment Tasks

• Skills Development: Critical Thinking (20%): Group presentation due 11:55pm Tuesday 16 September 2025 (Week 8)
• Professional Practice: Financial Analysis (30%): Individual task due 11:55pm Tuesday 21 October 2025 (Week 11)
• Formal and Observed Learning: Exam (50%): During the Examination Period

Skills Development: Critical Thinking

• Assessment Type: Presentation
• Indicative Time on Task: 20 hours
• Due: 11:55pm Tuesday 16 September 2025 (Week 8)
• Weighting: 20%
• Skills in focus: Critical thinking, Communication skills, Digital skills, Collaboration, Work readiness
• Deliverable: Presentation (max. 10 min per student) via video submission

Professional Practice: Financial Analysis

• Assessment Type: Case study/analysis
• Indicative Time on Task: 25 hours
• Due: 11:55pm Tuesday 21 October 2025 (Week 11)
• Weighting: 30%
• Skills in focus: Problem solving, Critical thinking, Communication skills, Discipline knowledge, Work readiness
• Deliverable: Written Submission (max 1,600 words)

Formal and Observed Learning: Exam

• Assessment Type: Examination
• Indicative Time on Task: 40 hours
• Due: During the Examination Period
• Weighting: 50%

Delivery and Resources

• The delivery format of this Unit is as follows:
  • Two-hour face-to-face (f2f) lecture (on campus) on Wednesday 9 – 11am, at 14SCO T3 Lecture Theatre
  • One hour tutorial which can be in person (on campus) or online (via zoom) depending on your class registration
• All materials for the unit, such as the lecture recordings, lecture notes, reading materials, and discussion questions etc will be made available to students on the unit iLearn site
• There is no prescribed textbook for Econ2035
• Recommended texts and books:
  • Saunders, Anthony et al, Financial Institutions Management : A Risk Management Approach (McGraw-Hill Education, Tenth edition., 2021)
  • Calomiris and Haber, 2014, Fragile by Design - The political origins of banking crises and scarce credit
  • Anat Admati and Martin Hellwig, 2024, The Bankers' New Clothes: What's Wrong with Banking and What to Do about It - New and Expanded Edition

Unit Schedule

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  • Academic Progression Policy
  • Assessment Policy
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  • Assessment Procedure
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  • Special Consideration Policy

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