FIN 413. Financial Markets and Intermediaries. 3 Hours.
Explores the financial institutions that create credit and liquidity for businesses and other borrowers, the financial instruments that facilitate credit and liquidity creation, and the markets in which those instruments are sold or traded. Special emphasis is paid to commercial banks, but non-depository intermediaries such as finance companies, mortgage banks, insurance companies and investment banks are also discussed. Presents and analyzes the workings of money markets, bond markets, commercial loan markets, mortgage markets and foreign exchange markets. Throughout the course, the determination of interest rates, as well as the sources and implications of credit risk, liquidity risk and interest rate risk, are central to the discussion. The course closes with an introduction to risk management at financial intermediaries using on-balance sheet (e.g., loan underwriting, asset-liability management) and off-balance sheet (e.g., asset securitization, interest rate, foreign exchange and credit derivatives) tools. (Not open to students with credit in FIN 430). Prerequisite: FIN 310 or FIN 311. Enrollment restricted. LEC.