OVERVIEW

The course provides an introduction to the financial system. In particular, it analyses the functions of the financial system, the different institutions—markets and intermediaries—that compose it, and the instruments used.

AIMS AND CONTENT

LEARNING OUTCOMES

This course aims to provide students with a basic knowledge of the financial system and the ways in which it meets the main financial needs, such as investment, financing, payment, pension, and risk management. To this end, the course illustrates the structure and functions of the financial system and the institutions operating within it—financial intermediaries and markets—the relevant regulatory framework, as well as the characteristics of the instruments and services offered to households and businesses.

AIMS AND LEARNING OUTCOMES

At the end of the course, the student will be able to:
- Describe the structure of the financial system, the main types of financial intermediaries, the characteristics of the main financial instruments, the functioning of financial markets, the  supervisory architecture of the financial system in Europe and Italy, and the strategy and operational framework of European monetary policy, in relation to real cases presented during lectures (Knowledge and understanding).
- Measure the return and risk of the main financial instruments, applying the formulas and methods illustrated during practical sessions (Applying knowledge and understanding).
- Use the acquired knowledge to solve simple problems involving investment in financial assets and project financing, through practical exercises proposed in class (Applying knowledge and understanding).
- Calculate the outcome of a transaction in derivative instruments and assess the appropriateness of risk hedging, using data provided in case studies (Applying knowledge and understanding).
- Measure banks' exposure to credit, interest rate, market, liquidity, and leverage risks, through the analysis of financial statements and indicators (Applying knowledge and understanding).
- Analyse the financial statements of the main financial intermediaries, by calculating appropriate ratios, on real or simulated data (Applying knowledge and understanding).
- Formulate independent judgments on the economic and managerial balance of financial intermediaries, on the quality of their policies and results, based on available data and information (Making judgments).
- Communicate clearly and unambiguously, using the technical language of the discipline, with both specialists and non-specialists, also through the use of information sources and databases (Communication skills).
- Identify and consult the main information and bibliographic sources, websites, and databases, to autonomously deepen the main topics of the discipline (Learning skills).

PREREQUISITES

Students are expected to have passed the following exams: 

• Business Adminstration;
• Financial mathematics.

TEACHING METHODS

Attendance is optional.
The course uses different methods, including lectures, case studies, business testimonials, individual and/or group assignments for attending students based on instructions provided on the Aulaweb platform, self-assessment tests, and instant polls as participatory teaching tools. All necessary instructions are provided on the Aulaweb page of the course.

Students with certified disabilities, specific learning disorders (SLDs), or special educational needs are advised to contact both the course instructor and the department’s disability liaison at the beginning of the course to arrange appropriate teaching and examination accommodations. These arrangements should respect the learning objectives of the course while addressing individual learning needs and allowing for the use of any approved compensatory tools.

SYLLABUS/CONTENT

Part I: FINANCIAL STRUCTURE OF THE ECONOMY AND THEORY OF FINANCIAL INTERMEDIATION

• The financial system (overview); alternative technologies for fund transfer: banks and markets

• Overview of financial instruments and markets

• Concept of the financial system

• The objective function of investors and fund borrowers

• Economic functions performed by financial intermediaries

Part II: FINANCIAL INSTRUMENTS

• Debt securities

• Equity securities

• Credit instruments

• Payment instruments

• Derivative instruments

• Insurance and pension instruments

Part III: FINANCIAL MARKETS

• Organizational forms of markets

• Structure and functioning of Italian regulated markets

Part IV: FINANCIAL INTERMEDIARIES (activities, balance sheet, risks, supervision of intermediaries)

• Banks

• Investment firms 

• Insurance companies

• Asset management companies

RECOMMENDED READING/BIBLIOGRAPHY

English-speaking students may prepare for the exam using the following textbook: Anthony Saunders, Marcia Cornett and Otgo Erhemjamts, (2022), "Financial Markets and Institutions", 8th Edition, McGraw-Hill.
Any changes or additions will be communicated on Aulaweb.

TEACHERS AND EXAM BOARD

LESSONS

LESSONS START

Lessons are held in the second semester, according to the academic calendar published on the Department of Economics website (https://economia.unige.it/calendario-didattico).

Class schedule

FINANCIAL MARKETS AND INSTITUTIONS A

EXAMS

EXAM DESCRIPTION

The exam is written and can be taken during the sessions scheduled in the calendar published on the Department of Economics website (https://economia.unige.it/date-esami).
Students who regularly attend lectures may take intermediate tests, the dates of which are communicated at the beginning of the course and on the Aulaweb page.

ASSESSMENT METHODS

The exam consists of an individual written test, which includes open-ended questions, multiple-choice questions, and short numerical exercises. The test is designed to assess the achievement of the intended learning outcomes as follows:

• Knowledge and understanding: will be assessed through open-ended and/or multiple-choice questions on the fundamental concepts of the financial system, financial instruments and markets, financial intermediaries, the supervisory architecture, and the European monetary policy, also with reference to real-world cases discussed during the course.

• Applying knowledge and understanding: will be verified through numerical and practical exercises involving the calculation of returns and risks of financial instruments, the evaluation of derivative transactions, the measurement of key banking risks, and the analysis of financial intermediaries' balance sheets, using formulas and methods presented in class.

• Making judgements: will be evaluated through questions requiring critical interpretation of data or operational situations, with the aim of assessing the financial soundness and strategic adequacy of financial intermediaries.

• Communication skills: will be assessed based on the clarity, accuracy, and consistency of open-ended responses, with particular attention to the appropriate use of technical terminology.

• Learning skills: will be assessed indirectly through the student’s ability to apply knowledge to new contexts and to use information drawn from sources provided during practical sessions or included in the teaching materials.

Further details on the assessment methods are available on the course's Aulaweb page, where sample exam questions are also provided.

For students with certified special needs, alternative assessment arrangements can be agreed upon with the instructor at the beginning of the course.

FURTHER INFORMATION

The exam can be taken only after online registration (available up to 4 days before the exam date).
If the final score is below 16/30, it is not possible to register for the next exam session (unless the next session is in a new exam period), due to the time required to address significant gaps in preparation.