module specification

FE5052 - Money and Banking (2018/19)

Module specification Module approved to run in 2018/19
Module title Money and Banking
Module level Intermediate (05)
Credit rating for module 15
School Guildhall School of Business and Law
Total study hours 150
 
5 hours Assessment Preparation / Delivery
105 hours Guided independent study
40 hours Scheduled learning & teaching activities
Assessment components
Type Weighting Qualifying mark Description
Coursework 50%   2,500 words research essay
Unseen Examination 50%   Unseen and closed examination 2 hours
Running in 2018/19
Period Campus Day Time Module Leader
Autumn semester City Tuesday Morning

Module summary

This module familiarises students with the main issues in macroeconomic policy choice. The module pays particular attention to the role of the commercial banking system and its impact on the money supply and the role of the Central Bank in monetary policy implementation.
The module contents include the definition and functions of money, the classifications of money in the supply of the money, the British banking system, the commercial banks and the supply of money, the demand for money, the central banking and the conduct of monetary policy, fiscal policy and the budget monetary policy and fiscal policy interaction international finance and monetary policy, monetary and fiscal policy and the exchange rate regime, the European monetary system and monetary Union, and the European central bank and the euro area monetary policy.
The module provides coherent knowledge of banking operation and develops academic and employability skills including specifically, sourcing and using academic literature, research, data collection application of knowledge, academic writing, and critical and analytical thinking, which are required to fulfil employment in the financial services work environment.

Syllabus

The British Banking System and Monetary Policy: the history, the reform and the development of the British Banking System. LO1

Commercial Banks and the Supply of Money: The definitions of money, the functions of the money, the classification of money. The functions of the commercial banks, the supply of money, the assets and liabilities of commercial bank, the assets and liabilities of central bank, the models of monetary supply determination including the base-multiplier model and the flow of funds model. LO1

The Demand for Money: the commercial banks and the demand for money, theories of the demand for money including the quantity theory, the standard approach to the transmission mechanism, the Keynes’s liquidity preference theory and Friedman’s modern quantity theory of money. LO1

Central Banking and the conduct of Monetary Policy: the role of the central back, the functions of central back, the money multiplier and the process for money creation, Central bank independence, lessons from monetary policy strategy from global financial crisis, and choosing monetary instrument, the determination of interest rate. LO1, LO3

Fiscal Policy and the Budget: the government budget, the fiscal policy multiplier s and the price level, the supply-side effects of fiscal policy
Monetary Policy and Fiscal Policy Interaction
International Finance and Monetary Policy: monetary and fiscal Policy and the Exchange Rate regimes. LO1

The European Monetary System and Monetary Union: the European Union, the European Monetary System, policies of the EU and the EMS, the European Monetary Union-Benefits, costs, and theory of optimal currency areas. LO2

The European Central Bank and the Euro area Monetary Policy: the European Central Bank, the European System of Central Banks making decisions, independence of the ECB, the monetary policy
the monetary policy instruments of the ECB LO2

Balance of independent study and scheduled teaching activity

The module is offered over a 15 week period. It provides an exploration of the macro-economic context of the banking and financial services industry and therefore addresses economic concepts and their policy implications.
The module will be delivered by a formal two hour lectures every week. These will be interactive and will involve short small group based exercises and open discussion.
The lectures will be supported by one-hour seminars.  Seminars will consolidate the lecture material and typically provide a forum for discussion of class exercises based on either theory or case studies. Some seminar time will be allocated to the use of IT resources such as the retrieval and analysis of economic data from sources such as Bloomberg.
Students will be required to prepare materials for the seminars based on the lecture themes of the previous week. They will engage students in activities such as group work, presentations, discussion, quizzes. The aim is to engender confidence in the understanding of the underlying concepts and develop critical and analytical skills through exploration of policy. Generic skills such as group work, oral communication and data collection, numeracy will also be practiced.
Students will be supported in the development of their research and written skills in seminar classes. The University’s virtual learning platform which will be used to provide supporting class materials, cited web sources and discussion forums.
The module will provide opportunities for students to undertake reflective exercises on two occasions over the duration of the module. Students will be encouraged to incorporate this in their personal development plans.

Learning outcomes

On successful completion of this module students should be able to:
1. Evaluate the scope and limitations of macro-economic policy instruments in a modern economy, and analyse and apply macro-economic theories to hypothetical macro-economic situations.
2. Critically analyse the European Monetary System and European Monetary Unit.
3. Demonstrate the written, research and critical and analytical skills required for employment in industry

Assessment strategy

The assessment strategy is designed to focus on the discipline specific skills related to macroeconomic environment of the banking and finance industry. It also aims to assess generic skills of written, research and critical and analytical skills required for employment in the financial services industry.
Diagnostic and formative assessment will take place on a weekly basis in seminars to develop theoretical, analytical and oral and written communication skills.
Summative and formative assessment will take place with the submission in week 23 of coursework in the form of an individual research essay of 2500 words. This will assess theoretical an practical understanding of the discipline and the ability of the candidate to undertake self-managed research activities including, literature review, data collection, written communication and critical and analytical abilities.
Summative assessment will take place in week 14-15 with a two hour unseen exam. This will primarily assess detailed knowledge and understanding of the discipline specific material and the candidate’s written communication skills.

Bibliography

Textbooks:

Core Text:

Mishkin, F. S. (2013), the Economic of Money, Banking, and Financial Markets, Third Edition, Pearson Education, Inc., New Jersey

Other Texts

Artis, M. and Nixson, F. (2007), the Economics of the European Union, Fourth Edition, Oxford University Press Inc., New York

Artis, M. and Lewis, M. (1991), Money in Britain: Monetary Policy, Innovation and Europe, Philip Allen, Hemel Hempstead

Blanchard O. (2011), Macroeconomics, Fifth Edition, Pearson Education, Inc., New Jersey

Buckle, M. and Thompson J. (2004), the UK Financial System: Theory and Practice, Fourth Edition, Manchester University Press, Manchester and New York

Burda, M. and Wyplosz, C. (2009), Macroeconomics: A European Text, Fifth Edition, Oxford University Press, Oxford

Dornbusch, R. & Fischer, S. (2011), Macroeconomics, Eleventh Edition, McGraw-Hill.

Handa, J.,(2009), Monetary Economics, Second Edition, Routledge, London and New York

Howells, P. and Bain, K. (2008), the Economics of Money, Banking and Finance: A European Text, Fourth Edition, FT Prentice Hall/Pearson Education, Harlow

Jones, C. I. (2011), Macroeconomics Second Edition, w. w. Norton and Company, New York and London

Mishkin, F. S. (2013), the Economic of Money, Banking, and Financial Markets, Third Edition, Pearson Education, Inc., New Jersey

Parkin, M. and Bade, R. (1983), Modern Macroeconomics, Philip Allen, Oxford

Journals:
They will be provided within weekly teaching program

Websites:
Bank of England http://www.bankofengland.co.uk
HM Treasury http://www.hm-treasury.gov.uk
European Commission http://europa.eu.int/comm./index
European Parliament http://www.europarl.eu.int

Electronic Databases:
Bloomberg

Social Media Sources:
Periodicals/Papers
Financial Times
Economist