Face-to-face , first term, 30 hours of theory and 7,5 hours of exercises.

First term
Thursday from 09:00 to 11:00 at 109 Marais 301

The course and tutorials are given in French. The reference handbook is available in French and in English.

This course should enable the students:
• to master the concepts relating to the studied themes;
• to deepen their knowledge of:
o the explanatory mechanisms of the financial markets' functioning and of the pricing of the assets that are exchanged on these markets;
o the importance of the regulation of financial markets;
o the role and the means of action of a central bank;
• to use theoretical analysis to understand a certain number of observed economic phenomena.

For the Bachelor in Business Engineering :

For the Bachelor in Economics and Management :

None

The course studies the following themes: a) the functioning of financial markets; b) the financial structure of an economy and the regulation of the financial markets and financial institutions; c) the monetary policy management. All these subjects will be illustrated by constant references to economic news.

Introduction (Mishkin, chapter 1 et 2)

Part 1: Financial markets

Chapter 1: Credit instruments and interest rates (Mishkin, chapter 4)

Chapter 2: The behaviour of interest rates (Mishkin, chapter 5)

Chapter 3: Term structure and risk structure of interest rates (Mishkin, chapter 6)

Chapter 4: Equity markets (Mishkin, chapter 7)

Chapter 5: Foreign exchange markets (Mishkin, chapter 19)

Chapter 6: An introduction to some derivative products (Mishkin, chapter 8)

Part 2: Banking and financial institutions

Chapter 7: Economic analysis of the financial system (Mishkin, excerpts of chapters 9, 10 to 13)

Chapter 8: History and lessons of a crisis (Mishkin, chapter 8)

Part 3: The Central Bank an the monetary policy management

Chapter 9: The money supply and the monetary creation process (Mishkin, chapter 17)

Chapter 10: Objectives, strategies and instruments of monetary policy (Mishkin, excerpts from chapters 16, 18 to 20)

Chapter 11: Is the Euro Zone an optimal currency area?

a) Lecture

The lecture follows the outline exposed above. Concepts and explanatory mechanisms will be presented and illustrated by concrete cases.

b) Tutorials

These will cover only certain parts of the subject matter and are organised according to the studied course material. The exercises are linked to current news topics.

The final assessment is a written examination. The student will be asked theoretical questions, exercise solving questions (similar to but not identical those solved during tutorials), and applications of theory to issues inspired by economic news.

Mishkin, Frederic, Christian Bordes et alii, Monnaie, banque et marches financiers, Pearson Education, 2010 (9ième édition).

Additional reading:

Tirole, Jean (2008), Leçon d'une crise, notes TSE n°1-12/2008 (available on the course website).

1) A copy of the slides used during the lectures is available on the course website eSaintLouis or at the reprography service.

2) A copy of the exercise statements is available on the course website.

3) A number of other documents related to the course (e.g., previous exams, list of comprehension questions on the subject matter...) are available online on the course website. Students are encouraged to register as users of this site (online registration), which will allow them to be informed of any additional documents available on the website and also of the teachers' messages.