Banking Economics

Overview :

Over the past few decades, there has been significant evolution in the institutions shaping the modern monetary system. The 2007-2009 financial crisis underscored the need for a similar evolution in our analytical tools and theories to understand this system better. Sponsored by the Institute for New Economic Thinking, this course aims to initiate new economic thinking by revitalizing neglected traditions in monetary thought.

Key Takeaways :

• The integration of capital markets and money markets has created new dynamics and vulnerabilities, as evidenced by the financial crisis.
• The crisis revealed the global nature of the system, prompting central bank cooperation and hinting at the emergence of a new international monetary order.
• Derivative contracts, such as credit default swaps and foreign exchange swaps, played a pivotal role in the crisis, emphasizing the interconnectedness of modern money and finance. This course emphasizes the central role of dealers in providing market liquidity in both capital and money markets.

Course Contents :

• Banking As Clearing System
• Banking As Market Making
• International Money & Banking
• Banking As Advance Clearing
• Money In Real World

Course Deliverables :

• Research Papers: Write research papers on topics such as the role of derivatives in financial crises or the evolution of international monetary systems.
• Case Study Analysis: Analyze case studies related to banking clearing systems, market making, or international monetary cooperation.
• Project on Market Liquidity: Develop a project exploring the role of dealers in providing market liquidity and the implications for financial stability.
• Presentations: Prepare and deliver presentations on various aspects of modern monetary systems, integrating theoretical insights with practical examples.
• Discussion Participation: Engage in discussions and debates on the integration of capital and money markets, global financial system dynamics, and the future of banking.
• Examinations: Complete examinations to test understanding of course materials and the application of monetary theories.
• Final Report: Produce a comprehensive report synthesizing course learnings and proposing new analytical frameworks for understanding modern monetary systems.