INTERNATIONAL FINANCIAL INSTITUTIONS AND MARKETS
Learning outcomes of the course unit
The aim of the course is to introduce the functions of a financial system in channeling funds from surplus to deficit units. The first part of the course aims to answer the following questions: what is a financial system, who uses it, what does it do? The course then focuses on the international regulators and regulations on the financial system and the activities of financial intermediaries. Financial institutions come in lots of different forms and offer a variety of services: the course emphasizes the distinctive characteristics of financial intermediaries of different European countries (banks and non-banking financial institutions). European mortgage markets and European consumer credit markets will be described in detail.
The second part of the course focuses on the role of microfinance in economic and social development. In developing countries the poor often do not access the mainstream financial system. The lack of funds due to financial exclusion prevents them from taking up opportunities offered by economic activities. Microfinance institutions provide financial services that allow people to save and invest in small businesses. Problems of sustainability and impact of microfinance institutions will be discussed, together with the opportunities and threats coming from the growth of the institutions and the internationalization process.
Course contents summary
Role of the financial system. The intermediation process of financial institutions. Banks: characteristics and functions. Non-banking financial intermediaries.Financial systems: differences among European countries. International regulation of financial markets. European mortgage markets.
European consumer credit markets.Financial exclusion. Role of microfinance in providing access to finance. Microfinance institutions: organization, lending policies, financial performance, and sustainability. Growth and vulnerabilities in microfinance. Role of international capital markets in microfinance. Impact of microfinance on social and economic development.
1) F.S. Mishkin, S.G. Eakins, “Financial Markets and Institutions”, Pearson International Edition, Sixth Edition, 2009
2) The Economics of Microfinance, Beatriz Armendáriz de Aghion and Jonathan Morduch, The MIT Press, 2005. Chapters: 1,3,4,5,6,7,9,10.
(Corresponding chapters in the 2010 edition: 1,3,4,5,6,7,10,11)
3) Additional compulsory readings indicated during the classes and on the Internet.
Assessment methods and criteria