ITF312

Money and Banking

This course is designed to help students understand the connections between money (the Central Bank), financial markets, and the macroeconomy. How are interest rates determined, and how does the Federal Reserve conduct monetary policy? What economic factors drive the yield curves in different bond markets? We will pay particular attention to the banking system, with an eye toward understanding the function and importance of banks. Topics will include the role of the Central Bank as a lender of last resort during the recent, and prior, financial crises, unconventional monetary policy tools such as quantitative easing and forward guidance. We discuss new developments in payment and clearing including cryptocurrencies. We will often begin class with a discussion of current macro-financial market events in the context of our course coverage. The course is appropriate for anyone trying to gain a macroeconomic perspective on capital markets, from investors to bankers, or those simply interested in the linkages between interest rates, banks and the economy.