ECON3210-Financial Markets &InstitutionsC/C++

Java Python ECON3210-Financial Markets &Institutions

SemesterSem 2 2023| Administrative Campus:St  Lucia  | Mode: In Person Printed:25 July 2024,05:15 pm

This printed course profileis valid at the date and time specifed above.The course profile may be subject to change during the semester-the online version is the authoritative version.

1.General                   Course Information

1.1 Course Details

Course Code:ECON3210

Course Title:Financial Markets &Institutions Coordinating Unit:School of Economics

Semester:Semester 2,2023

Mode: In Person

Level:Undergraduate

Delivery Location: St Lucia Number of Units:2

Contact Hours Per Week:LEC2  Hours/Week  TUT2  Hours/Week

Pre-Requisites:(ECON1010 or  1011)+(FINM1415or  1416 or 2400 or 2401)or(ECON2011+FINM2411)or(ECON2012+FINM2412)or ECON2200 Recommended Companions: ECON3550

Course Description:Flow of funds &financial markets,theory &behaviourof interestrates,term &risk structure of interest rates,exchange rates, interest parity,expectations formation,equity markets,debt market,Euro markets,derivatives markets,socialallocation of capital.

Assumed Background:

The courseisintended for students who wish to acquire a deep and analytical understanding of financial markets andinstitutions.Itisessential

therefore that students who take this course have been exposed tofinancial topicsin previous courses.Please check the prerequisites isted above, whichshould be completed before enrolling in this course.tis not recommended to take the pre-requisite courses during the same semester as

ECON3210.Students havethe opportunity to postpone the studyof the course to the Summer semester if theyplan toattend the pre requisite courses during Semester 2.

1.2 Course Introduction

The course aims to provide a deepand thorough understanding of the financial markets andinstitutions.The content blends economics-relevant and business-relevant topics to enhance graduate employabity and captures the current financial environment.The methodology used toteach this

course relies on an accounting-based representationof financial mechanisms withflow-of-fund diagrams and balancesheets in a coherent and unified framework.This approach allows to debunk myths and address misconceptions that are widespread in the media,especiall concerning money and banks.

Topics covered thisyear

1.Lifecycle of a financial instrument in an accounting framework;flow of funds diagrams and balance sheets 2.The payment system;central bank money,effect on banks balance sheet,NPP and Bitcoin

3.Funding of the economy through direct finance,Intermediation and creation of money;peer-to-peer lending

4.Institutional arrangement of the debt markets;auctions in government bond market and asset-backed securities 5.Institutional arrangement of the share markets;security lending and short selling;regulation of short selling

6.Managed funds,hedge funds,ETF and XTB

7.Mark-to-market accounting and management of bad debt in banks 8.BaselII Capital adequacy regulation

9.Determination of interest rates and term structure of interest rates

10.Central bank money creation,monetarypolicy tools and market for reserves framework

11.Implementation of cash rate targeting;target while autonomous factors and change in targets unconventional monetary policies

Blended -learning delivery

The courseis deliveredin ablended learning mode.Students self study online on LearnX the content through lecturers videos,reading,MCQ and

problems at their own pace.They then attend a two-hourtutorialwhere many group activities and discussions take place to apply the knowledge to more  exam-oriented  questions.We  apply  the threcolour scheme,in which  differentiatedparalle  utorialactivities  accommodateallevels  of

preparation and confidence.Finally,students meet the course coordinator in the workshop the week after the tutorial In these workshops,Frederique  complements the online content with recent trends,when needed,critical thinking activities around articles and data,and more challenging problems  thanthe ones seenintutorials.As workshops prepareforthe higher-orderthinking questions of theassignments,attendanceis highly recommended.

The self study online material for each topic has beendvided into 3 to 5 subsections that are self contained and can therefore beeasilystudied in separateshort sessions.The self study content is released at leasttwo weeks ahead of related tutorials for maximum flexibility.

Internal delivery

Tutorials are offred either exclusively face to face on Campus(recommended option)or exclusivelyon Zoom,with no hybrid option.Workshops and consultations aredelivered in an hybrid mode,with studentsattending face to face on Campus (recommended option)while simultaneously others   are on Zoom.Werecommend face to facewhenever possible as interactions with peers and instructors are morespontaneousthis way.

The course coordinator

Dr Frederique Bracoud,the course coordinator and lecture,is a theoretical banking Microeconomist,trained in France and Belgium,and has along  experience inteaching Financial Economics at introductory andadvanced levels in the UKand in Australia.The lecturerreceived a UQCitation for Outstanding Contibution to Student Learning for hergraduated approach inteaching finance in2016and a BELEmployee excelence awardfor the three colour tutorialin 2021.She is the author of Financial markets andinstitutions:a step-by step analysis of core mechanisms,an open access textbook at UQ Pressbooks,from which mostreading for the courseare extracted.

Course Changes in Response to Previous Student Feedback

In 2023,with most students returning to internal mode delvery,we are able to reintroduce a closed book supervised exam in the exam period for 45% of the final mark,asit used to bebefore Covid hit.With many students providing feedback that they cannot commit the time to long assessment,we  have also reintroduced a 90mn mid term examduring workshop timeslot for 40%;whil short,itis online and open booked for 40%.From lastyear we retaina 15%open bookunsupervised take home assessment allowing to check that thefoundations taught in topic 1 and 2are well nderstod while preparing students to the (high)standards of the course (and possibly readjust their study and exam strategies).For more fexibility thisformative assessment wil be available for a longer period (7 daysinstead of 3 days last year)and without any timer (instead of a7hour timerlast year).

We look forward to receiving your comments onthe new format during and at the end of the semester.

1.3 Course Staff

Course Coordinator:Dr Frederique Bracoud

1.4 Timetable

Timetablesare available onthe UQ Public Timetable.(https://my.uq.edu.au/public-timetable)

Additional Timetable Information

Students are required to select their preferedclasstimes through My Timetable and attend theirallocated timeslot.The timetableis published through the UQ Public Timetable found inthe APPssection ofmyUQ Tutorials start in teaching week 1 and stop after week 12.

All ssessment datesare already scheduled(see Assessment section).Please write downall hesedates in your personal diary at once.Block also in your diary the days during which you will need to revise to prepare for each assessment

Please see the Learning Activities section of this Course Profile (Section 4.1)for the timetabling implications of public holidays. Public Holidays:Wednesday 16 August (Royal Queensland Show),Monday20ctober (King's Birthday).

Mid-Semester Break:25 September-20ctober.Semester 2 classes  recommence Tue 30ctober.

Students should refer to the timetable prior tothe commencement of classes to ensurethat theyhave the most up to date information,as from time totime lateroomchanges may occur.The timetable can be downloaded here Public Timetable(https//my.uq.edu.au/public-timetable)  .

2.1 Course Aims

This courseaimsto provide students with a thorough understanding ofthe foundations and core mechanisms of the financial system.It also intends to equipstudents with technical knowledge of the characteristics,products,and operations of major financialinstitutions and their roles in the economy.Lasty,it aims to empower students with tools that enable them to criticall analyse contemporary realworld challenges in financial

3.Learning Resources

3.1 Required Resources

Bracoud,F(2022)Chapter 1 The lifecycle of afinancialinstrument in flow-of-fund diagrams and balance sheets in Financial Markets andinstitutions

a step-by-step analysis ofcore mechanisms.[Topic 1]UQ Pressbooks.

https//uq.pressbooks.pub/financialmarkets/chapter/chapter-1/(https://uq.pressbooks.pub/financialmarkets/chapter/chapter-1)

Bracoud,E.(2022)Chapter2 The role of Authorised depositakinginstitutions in the payment system'in Financial Markets andInstitutions:astep-by step analysis of core mechanisms.[Topic 2]UQ Pressbooks

Bracoud,F.(2022)Chapter 3'Funding of the economy through direct finance,financial intermediation and net creation of money in Financial markets andinstitutions:astep-by-step analysis ofthe coremechanisms.[Topic 3]UQ Pressbooks

Bracoud,E(2022)Chapter 5'Securitisation by finance companies and banks'in FinancialMarkets andInstitutions:astep-bystep analysis of core mechanisms.[Topic 4]UQ Pressbooks. https:/uq.pressbooks.pub/financialmarkets/chapter/securitization/(https:/uq.pressbooks.pub/financialmarkets/chapter/securitization/)

ASIC(2018)Regulatory Guide RG 196 Short Selling [Topic 5]Available free of charge on LearnX https//download.asic.govau/media/4896780/rg196-published-8-october-2018.pdf (https//download.asic.gov.au/media/4896780/rg196-pubished 8-october-2018.pdf)

Hull,J(2015)Chapter 4 Mutual funds and Hedge funds in Risk Management and FinancialInstutions wiley(4th edition)[Topic 6]Available free of chargeon LearnX

ECON3210-Financial Markets &InstitutionsC/C++ RBA(2011)Exchange traded funds in RBA Bulletin March Quarter [Topic 6]Available free of charge on LearnX https:/www.rba gov.au/publications/bulletin/2011/mar/8.html (https://www.rba.gov.au/publications/bulletin/2011/mar/8.html)

Australin Centre for Financial Studies(2015)Australian Debt securities and corporate bonds,improving accessto the corporate bonds markets for retail investors.[Topic 6]Availablefreeof charge on LearnX

https://business.nab.com.au/wp-content/uploads/2015/06/Australian-debt-securities-and-corporate-bonds-june-2015.pdf

(https:/business.nab.com.au/wp-content/uploads/2015/06/Australian-debt-securities-and-corporate-bonds-june-2015.pdf)

Hogan(2004)Chapter 2Understanding financial statements of ADls in Management of financialinstitutions,2ndedn,John Wiley &Sons[Topic刁 Available free of charge on LearnX

Bracoud,Fand JOoi(2022)Mark to market accountingfor ADls securities in Financial markets andInstitutions:astep-by-step analysis of core mechanisms [Topic 7]UQ Pressbooks

Bracoud,F(2022)Chapter 7'Capita Adequacy Regulation in Australia in FinancialMarkets andInstitutions:a step-by -step analysis of core mechanisms [Topic 8]UQ Pressbooks https:/uq.pressbooks.pub/financialmarkets/chapter/bank-capital-regulation/(https:/uq.pressbooks,pub/financialmarkets/chapter/bank-capital regulation/)

Bracoud,F(2017)Future value,presentvalue and yield [Topic9]Available free of charge on Edge

Mishkin,Fand Eakins,S.(2012)Chapter  10 Conduct of Monetary Policy goals,tols,strategy and tacticsin Financial Markets and Instutions[Topic 10]Available free of charge on LearnX

RBA(2019)The Framework for monetary policy implementation in RBA Buletin June 2019[Topic 11]Available free of charge on LearnX https:/www.rba    gov.au/publications/bulletin/2019/jun/the-framework-for-monetary-policy-implementation-in-australia.html (https:/www.rba.gov.au/publications/bulltin/2019/jun/the-framework-for-monetary-policy-implementation-in-australia.html) 3.2 Recommended Resources Some subtopics on LearnX wil be complimentary and not assessed.The reading belowis for students that will beinterested in exploring these not compulsory topics.

CBA(2022)CommBank PERLS XIV capital notes prospectus (upto page 43)[Topic 4]Availablefree ofcharge on LearnX https:/www.commbank.com.au/content/dam/commbank-assets/investors/docs/CommBank-PERLS-XIV-Capital-Notes-prospectus.pdf (https//www.commbank.com.au/content/dam/commbank-assets/investors/docs/CommBank    PERLS-XIV-Capital-Notes-prospectus.pdf)

Bankof England (2014)Innovationsin payment technologies and the emergence of digital curencies in Bankof England Quarterly Bulltin 2014Q3. [Topic 2]Available for free on LearnX.

htps/www.bankofengland.co.uk/-/media/boe/fles/quarterly-bulletin/2014/innovations-in-payment-technologies-and-the-emergence-of-digital currencies.pdf(htps:/www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/innovations-in-payment-technologies-and-the-

emergence-of-digital-currencies.pdf)

3.3 University Learning Resources

Access to required and recommended resources,plus past central exam papers,is available at the UQ Library website (http://www.library.uq.edu.au/lr/ECON3210(http://www.library.uq.edu.au/lr/ECON3210)).

The University ffers arange of resources and servicesto support student learning.Details are available on the myUQ website(htps//my.uq.edu.au

(https://student.my.uq.edu.au/).

3.4 School of Economics Learning Resources

For assessment inthis course students willbe permitted to use Casio FX82 series(82withany letters)or university approved (abelled)calculators. Calculator requirements may differ for other university courses andstudents should checkeach course proflefor thespecific requirements.

PLEASE NOTE:tis the student'sresponsibity to ensure they have the correct calculator prior to assessmentin eachof their courses.Guidelines for

correct referencing  techniques  can be found in  https:/guideslibrary.uq.edu.au/referencing?b=g&d=a&group_id=15017 (https//guides.library.uq.edu.au/referencing?b=g&d=a&group_id=15017)

3.5 Other Learning Resources &Information

The chapters of Bracoud (2022)il be accessible through either pdfle in LearnXor through UQ Pressbook linkprovided at the begining of Semester  2,2023

4.Teaching   &Learning Activities

4.1 Learning Activities

Recording of Lectures: Please be aware that teachingat UQ may be recorded for the beneft of student learning If you would prefer not tobe

captured either by voice or image,please advise your course coordinator before classso accommodations can be made.Forfurtherinformation see PPL3 .20.06 Recording of Teaching at UQ 0.

Date	Activity	Learning Objectivēs
24Ju|2317:00	LearnX,blended learning &assessment standards (Workshop)
25 Jul 23-28 Jul23	0 Money,balance sheet in action,shares and bonds (Tutorial)
31Ju|2317:00	0 Money,balance shee in action,shares and bonds (Workshop):checking pre-requisites	1,2
01 Aug 23-04 Aug 23	1 Lifecycle of a financial instrument accounting(Tutorial)	1,2
07 Aug 2317:00	1 Lifecycle of a financial instrument accounting (Workshop)	1,2

4.20ther Teaching and Learning Activities Information

For simplcity,the table above only displays the tutorials,workshops andassessments.As part of blendedlearning delivery,online study of the topic is expected the week before the tutorial to whichitis related,For more flexibity,the online material for each topic is available 2 weeks before the tutorials.The workshop on agiven topic is a week after the tutorial(two weeks after tutorial after the mid-term exam).Thisis to allowthat content of the tutorial be mastered before undertaking more critical thinking activitiesduring theworkshop

The course usesBlackboard only for assessment purpose and for access to the UQExtend platform. Althe  course  content,except  assessment,is   located on the UQ Extend platform. (including videos and model answers for tutorials and selected recording and model answers for workshops after they took place).

The tutorials are not recorded, even when on Zoom because theyare mainly group activtes Instead,the studio produced Alexvideos are provided on UQ Extend tutorial section after thelast tutorialeach week.Workshop recordings are edited toremove student activity ime before being uploaded on UQ Extend workshop section.

Attendance is recommended in order to get the fullearning benefits of interactions with the teaching team and your peers and of the witing activities.Attendance face to face on Campus is likelyto be the mostenjoyable option,when possible.Wokshops and tutorials are directy relevant to the assessment process.

Itis yourresponsibility to attend classesand consult the courseBlackboard sitefor correct and up-to-date information regarding the course,including examination times.Relyingon fllow students to pass on information may resultin incorrectinformation for which the University will not be held responsible.Frederique releases everySunday evening the Sunday weekly update that summarises theactvities and assessment for the coming week (includingadvice on revisions ahead of assessment)