ICM332-Financial Markets and Institutions

Module Provider: ICMA Centre
Number of credits: 10 [5 ECTS credits]
Level:7
Terms in which taught: Autumn term module
Pre-requisites:
Non-modular pre-requisites:
Co-requisites:
Modules excluded:
Current from: 2023/4

Module Convenor: Dr Alfonso Dufour
Email: a.dufour@icmacentre.ac.uk

Type of module:

Summary module description:

This module provides an introduction to international financial markets and an overview of financial institutions. The main characteristics and risks of a range of financial markets are presented: equity, fixed income, foreign exchange, futures and commodity markets. A series of interactive workshops are used to learn about ethical investing and alternative trading systems.

Aims:

To provide an economic framework for understanding global financial markets, financial institutions, market players and the importance of liquidity and price efficiency. Participants will gain an understanding of commercial and investment banks, mutual funds, central banks, stock, bond and repo markets. Also, participants will learn about specific characteristics and risks of foreign exchange markets as well as futures markets and commodity markets.Ìý

Assessable learning outcomes:

By the end of the module, it is expected that students will be able to:

• Explain the structure of the global financial system and illustrate the role of central banks, financial institutions and the functions of finance;


• Identify the main features of global financial markets in bonds, stocks, foreign exchange and commodities;Ìý


• Distinguish primary and secondary markets in each asset or instrument;


• Compare exchanges and OTC markets;


• Describe the major players in each market and the role of intermediaries;


• Recognise quotation conventions;


• Explain and apply mark-to-market procedures and market mechanics (market participants, order matching systems and auctions);


• Critically discuss the importance of liquidity and price efficiency

Ìý

Additional outcomes:

Students will be able to describe different firms in the industry, explain how they differ from each other and identify the various careers available within the industry as an aid to their own career development.Ìý

Outline content:

Lecture 1:

The financial services industry and the purpose of finance and investment (overview of financial trading industry)

Workshop: Ethical and professional standardsÌý

Lecture 2:

Financial institutions and central banks. Why financial institutions exist. Liquidity and transaction costs, adverse selection, price discovery, market efficiency.

Workshop: ESG factors

Lecture 3:

Buy and sell side institutions. Markets and Exchanges. Trading process.

Workshop on alternative exchangesÌý

Lecture 4:

Equity markets

Workshop on order driven marketsÌý

Lecture 5:

Fixed income and money markets, Forex Markets

Workshop on Fixed Income markets – Bloomberg/TR

Lecture 6:Ìý

Futures and Commodities markets: Features and risksÌý

Workshop on Futures markets – Bloomberg/TR

Global context:

This module focuses on US and European markets but also refers to major markets in other countries.

Brief description of teaching and learning methods:

All topics are presented and discussed in the lectures. Interactive workshops and seminars are used to provide practical examples of the concepts presented in the lectures. In the seminars, participants will discuss and solve non-assessed coursework set by the instructors.

Summative assessment- Examinations:

2-hour exam based on multiple-choice questions (100%)Ìý

The examination for this module will require a narrowly defined time window and is likely to be held in a dedicated exam venue.

Summative assessment- Coursework and in-class tests:

Formative assessment methods:

Sample multiple-choice questions and questions discussed in the seminars

Penalties for late submission:

Penalties for late submission on this module are in accordance with the University policy. Please refer to page 5 of the Postgraduate Guide to Assessment for further information:

Assessment requirements for a pass:

A minimum total mark of 50% for the module

Reassessment arrangements:

Exam based on multiple-choice questions

Additional Costs (specified where applicable):

The required textbook is: Foundational Theories and Techniques for Risk Management, A guide for professional risk managers in financial services, PRMIA Institute, 2022. The e-book version is made available free of charge to enrolled students.

Last updated: 30 March 2023