• Definitions and basic features of the financial system
• Determination of interest rates
• Problems of asymmetric information and financial intermediation
• Banks and money supply
• Interbank market and monetary policy
• Risks of financial institutions
• Interest rates risk
• Credit risk
• Market risk
• Capital adequacy of banks
• Forward contracts and swaps

The objective of this course is to analyse and explain basic concepts and topics relating to the financial sector and the financial management of banks. The course outlines and examines the operation of central banks, the role of commercial banks in money supply and the interbank market. In addition, the basic risks faced by commercial banks, and the measurement and management of these risks are discussed.

On successful completion of the course students will be able to:

• understand definitions and basic concepts relating to the financial sector;
• understand the role of the financial sector in the economy and the causes and effects of financial crises;
• recognise and analyse the different types of risks faced by banks;
• understand the methods of measuring and managing banking risks; and
• understand risk management tools.