Money and Banking

Module title	Money and Banking
Module code	BEE2037
Academic year	2019/0
Credits	15
Module staff	Dr Martha Omolo ()

Duration: Term	1	2	3
Duration: Weeks	11

Number students taking module (anticipated)	300

Module description

This module undertakes a detailed analysis of various topics within the fields of monetary economics, including the management of financial institutions and the economic analysis of financial regulation. This module also explores the main objectives of a Central Bank and investigates how Central Banks design and implement appropriate monetary policy strategies in line with meeting primary Central Bank objectives. The process of exchange rate determination is also examined through investigating the monetary, portfolio-balance, and micro-structure approaches.

Module aims - intentions of the module

The aims of this module are to:

Provide students with a solid understanding of various topics within the fields of Monetary Economics, Central Banking, and International Finance.
Help students to understand contemporary issues within the above-mentioned areas and use this understanding to debate the appropriateness of various policy responses by the relevant authorities.

Intended Learning Outcomes (ILOs)

ILO: Module-specific skills

On successfully completing the module you will be able to...

1. Assess the structure and management of financial institutions within the world economy
2. Demonstrate an understanding of various Central Banking frameworks, with specific reference to the Bank of England
3. Explain the theories, tools and strategies available to monetary authorities, and how they can be used and/or applied when conducting monetary policy changes
4. Understand and evaluate the monetary policy framework currently implemented in the UK, namely inflation targeting
5. Explain the different approaches to exchange rate determination from both a macro and micro perspective
6. Compare the effects of macroeconomic policies under differing exchange rate systems

ILO: Discipline-specific skills

On successfully completing the module you will be able to...

7. Develop the ability to apply relevant economic theories to real-world monetary issues
8. Assess the appropriateness of policies aimed at various economic and financial market problems

ILO: Personal and key skills

On successfully completing the module you will be able to...

9. Improve reasoning ability
10. Demonstrate the ability to communicate effectively in both a written and verbal format
11. Improve summarizing of key concepts for speech and/or presentation purposes

Syllabus plan

PART 1: CENTRAL BANKING AND CONDUCT OF MONETARY POLICY

Banking and the Management of Financial Institutions
Central Banking
The Tools of Monetary Policy
The Conduct of Monetary Policy: Strategy and Tactics
Monetary Policy in Practice: Inflation Targeting

PART 2: INTERNATIONAL FINANCE AND MONETARY POLICY

The Foreign Exchange Market
Monetary and Portfolio-Balance Approaches to Exchange Rate Determination
The Microstructure Approach to Exchange Rate Determination

PART 3: MONETARY THEORY

Monetary Policy Theory
Lags and Policy Implementation
Policy Conduct: Rules versus Discretion
The Role of Credibility and a Nominal Anchor
Transmission Mechanisms of Monetary Policy
Macroeconomic Policy in an Open Economy under Fixed Exchange Rates
Macroeconomic Policy in an Open Economy under Flexible Exchange Rates

Learning activities and teaching methods (given in hours of study time)

Scheduled Learning and Teaching Activities	Guided independent study	Placement / study abroad
27	123	0

Details of learning activities and teaching methods

Category	Hours of study time	Description
Contact hours	22	Lectures
Contact hours	5	Tutorials
Guided Independent Study	123	Independent study

Formative assessment

Form of assessment	Size of the assessment (eg length / duration)	ILOs assessed	Feedback method
Tutorial questions	In class	1-11	In class feedback

Summative assessment (% of credit)

Coursework	Written exams	Practical exams
0	100	0

Details of summative assessment

Form of assessment	% of credit	Size of the assessment (eg length / duration)	ILOs assessed	Feedback method
Mid-term test	25	1 hour	1-11	Indicative solutions available; Verbal feedback
Final exam	75	2 hours	1-11	Indicative solutions available

Details of re-assessment (where required by referral or deferral)

Original form of assessment	Form of re-assessment	ILOs re-assessed	Timescale for re-assessment
Mid-term test (25%) and final exam (75%)	2 hour final exam (100%)	1-11	August examination period

Indicative learning resources - Basic reading

Prescribed Text:

Mishkin, F.S. 2016. The Economics of Money, Banking, and Financial Markets, 11^th Edition. Pearson Education Limited: UK

Other consulted texts:

Appleyard, D.R., Field, A.J. and Cobb, S.L. 2016. International Economics, 8^th Edition. McGraw-Hill Publishers: USA (A&F)
Gereben, A., Gyomai, G. and Norbert Kiss, M. 2005. The microstructure approach to exchange rates: a survey from a central bank’s viewpoint. Magyar Nemzeti Bank Occasional Papers 42. Magyar Nemzeti Bank: Budapest, Hungary (G,G&N)
Hammond, G. 2011. State of the art of inflation targeting. Centre for Central Banking Studies, Handbook No. 29. Bank of England: UK (IT)

Indicative learning resources - Web based and electronic resources

Journal articles from various e-journals will be provided in the module’s ELE page.

Key words search

Central banks, Monetary Policy, Interest Rates, Exchange Rates

Credit value	15
Module ECTS	7.5
Module pre-requisites	BEE1030 and BEE1031 or BEE1036 and BEE1037 or BEE1029
Module co-requisites	BEE2038 and BEE2039 or BEE2025 and BEE2026
NQF level (module)	5
Available as distance learning?	No
Origin date	15/03/2018
Last revision date	15/03/2018