Program Overview

FINANCIAL MARKETS AND INSTITUTIONS CLEA

Course Overview

The course provides an introduction to the financial system, analyzing the functions of the financial system, the different institutionsmarkets and intermediariesthat compose it, and the instruments used.

Aims and Content

Learning Outcomes

This course aims to provide students with a basic knowledge of the financial system and the ways in which it meets the main financial needs, such as investment, financing, payment, pension, and risk management. The course illustrates the structure and functions of the financial system and the institutions operating within itfinancial intermediaries and marketsthe relevant regulatory framework, as well as the characteristics of the instruments and services offered to households and businesses.

Aims and Learning Outcomes

At the end of the course, the student will be able to:

• Describe the structure of the financial system, the main types of financial intermediaries, the characteristics of the main financial instruments, the functioning of financial markets, the supervisory architecture of the financial system in Europe and Italy, and the strategy and operational framework of European monetary policy, in relation to real cases presented during lectures.
• Measure the return and risk of the main financial instruments, applying the formulas and methods illustrated during practical sessions.
• Use the acquired knowledge to solve simple problems involving investment in financial assets and project financing, through practical exercises proposed in class.
• Calculate the outcome of a transaction in derivative instruments and assess the appropriateness of risk hedging, using data provided in case studies.
• Measure banks' exposure to credit, interest rate, market, liquidity, and leverage risks, through the analysis of financial statements and indicators.
• Analyse the financial statements of the main financial intermediaries, by calculating appropriate ratios, on real or simulated data.
• Formulate independent judgments on the economic and managerial balance of financial intermediaries, on the quality of their policies and results, based on available data and information.
• Communicate clearly and unambiguously, using the technical language of the discipline, with both specialists and non-specialists, also through the use of information sources and databases.
• Identify and consult the main information and bibliographic sources, websites, and databases, to autonomously deepen the main topics of the discipline.

Prerequisites

Students are expected to have passed the following exams:

• Business Administration
• Financial Mathematics

Teaching Methods

Attendance is optional. The course uses different methods, including lectures, case studies, business testimonials, individual and/or group assignments for attending students based on instructions provided on the Aulaweb platform, self-assessment tests, and instant polls as participatory teaching tools.

Syllabus/Content

The course is divided into four parts:

1. Financial Structure of the Economy and Theory of Financial Intermediation
   • The financial system (overview)
   • Alternative technologies for fund transfer: banks and markets
   • Overview of financial instruments and markets
   • Concept of the financial system
   • The objective function of investors and fund borrowers
   • Economic functions performed by financial intermediaries
2. Financial Instruments
   • Debt securities
   • Equity securities
   • Credit instruments
   • Payment instruments
   • Derivative instruments
   • Insurance and pension instruments
3. Financial Markets
   • Organizational forms of markets
   • Structure and functioning of Italian regulated markets
4. Financial Intermediaries (activities, balance sheet, risks, supervision of intermediaries)
   • Banks
   • Investment firms
   • Insurance companies
   • Asset management companies

Recommended Reading/Bibliography

English-speaking students may prepare for the exam using the textbook: Anthony Saunders, Marcia Cornett and Otgo Erhemjamts, (2022), "Financial Markets and Institutions", 8th Edition, McGraw-Hill.

Teachers and Exam Board

• Course Instructor: Francesca Querci
• Exam Board:
  • Francesca Querci (President)
  • Barbara Alemanni
  • Marco Di Antonio
  • Laura Nieri

Lessons

Lessons are held in the second semester, according to the academic calendar published on the Department of Economics website.

Exams

Exam Description

The exam is written and can be taken during the sessions scheduled in the calendar published on the Department of Economics website. Students who regularly attend lectures may take intermediate tests, the dates of which are communicated at the beginning of the course.

Assessment Methods

The exam consists of an individual written test, which includes open-ended questions, multiple-choice questions, and short numerical exercises. The test is designed to assess the achievement of the intended learning outcomes.

Further Information

The exam can be taken only after online registration. If the final score is below 16/30, it is not possible to register for the next exam session, due to the time required to address significant gaps in preparation.