Money and Banking

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.  

Full module specification

Module title:Money and Banking
Module code:BEE2037
Module level:2
Academic year:2019/0
Module lecturers:
  • Dr Martha Omolo -
Module credit:15
ECTS value:

7.5

Pre-requisites:

BEE1030 and BEE1031 or BEE1036 and BEE1037 or BEE1029

Co-requisites:

BEE2038 and BEE2039 or BEE2025 and BEE2026 

Duration of module: Duration (weeks) - term 1:

11

Module aims

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.

ILO: Module-specific skills

  • 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

  • 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

  • 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

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

Scheduled Learning and Teaching ActivitiesGuided independent studyPlacement / study abroad
271230

Details of learning activities and teaching methods

CategoryHours of study timeDescription
Contact hours22Lectures
Contact hours5Tutorials
Guided Independent Study123Independent study

Formative assessment

Form of assessmentSize of the assessment (eg length / duration)ILOs assessedFeedback method
Tutorial questionsIn class1-11In class feedback

Summative assessment (% of credit)

CourseworkWritten examsPractical exams
01000

Details of summative assessment

Form of assessment% of creditSize of the assessment (eg length / duration)ILOs assessedFeedback method
Mid-term test251 hour1-11Indicative solutions available; Verbal feedback
Final exam752 hours1-11Indicative solutions available

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

Original form of assessmentForm of re-assessmentILOs re-assessedTimescale for re-assessment
Mid-term test (25%) and final exam (75%)2 hour final exam (100%)1-11August examination period

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

Indicative learning resources - Basic reading

Prescribed Text:

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

Other consulted texts:

  • Appleyard, D.R., Field, A.J. and Cobb, S.L. 2016. International Economics, 8th 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) 

Module has an active ELE page?

Yes

Indicative learning resources - Web based and electronic resources

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

Origin date

15/03/2018

Last revision date

15/03/2018