FI363 Financial Institutions & Markets

for F2B 2005

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Course Title:  Financial Institutions and Markets

Instructor:  Cynthia Williams

Term Dates: 10 Oct  – 4 Dec

Meeting Time:  5:00 – 7:30 PM MW

Resident Center:  Ft. Bliss

Syllabus Money and Banking



A study of the macrofinancial environment with emphasis on the structure, functions, and economic role of financial institutions and markets. This includes the role of commercial banks, the central banking system and international finance. Pre-requisite:  EC 301



Upon successful completion of this course, the student will be able to:

Discuss the money supply response to changes in key variables including the reserve ratio, the non-borrowed monetary base, the discount rate, the currency ratio, expected deposit outflows, and market interest rates.

Compare the Classical and Neoclassical (Monetarist) views of money demand with the Keynesian view, focusing on the role of interest rates and the debate surrounding the velocity of money.

Identify the tools, goals, and targets of monetary policy.

Discuss the transmissions mechanisms of monetary policy.

Discuss how asymmetric information, adverse selection, and moral hazard relate to banking regulation in the U.S. and abroad.



Lecture and discussion of text material. Occasional handouts will be provided for the student’s edification.  



Attendance is required. Textbook chapters must be read prior to class. Performance will be evaluated with a mid-term and a final exam, each comprised of multiple choice and short answer questions, and graded accordingly:  A = 90 - 100, B = 80 - 89, C = 70 - 79,

D = 60 - 69, and F = 50 - 59.  Three homework sets, worth 100 points each, have a weight of 20 percent for the final grade. The mid-term exam is worth 100 points and has a weight of 30 percent, and the final exam is worth 100 points and has a weight of 50 percent. For example:

Homework Set #1   72                   Weight          Score x Weight

Homework Set #2   80

Homework Set #3   95

                               247  = 82.3            20                        1646


Mid-Term                          85               30            2550

Final                                   83               50            4150

                                                             100           8346/100 = 83.5


It is expected that the student will stay abreast of current economic and financial news by reading local and national news publications, such as the Wall Street Journal.



The Economics of Money, Banking, and Financial Markets, Mishkin, Frederic S., Boston: Addison Wesley, 7th Edition, 2004.



Oct    10    Why Study Money, Banking, and Financial Markets?

          12    An Overview of the Financial System/What Is Money?

          17    Understanding Interest Rates/The Behavior of Interest Rates

          19    The Risk and Term Structure of Interest Rates

          24    The Stock Market, the Theory of Rational Expectations, and the Efficient 

        Market Hypothesis/Banking and the Management of Financial Institutions/     

        Review Mid-Term Exam

          26    Mid-Term, Chapters 1–7, 9 Homework Sets #1, 2

          31    Banking Industry:  Structure and Competition/Structure of Central Banks and   

                  the Federal Reserve System

Nov    2    Multiple Deposit Creation and the Money Supply Process/Determinants of        

                 the Money Supply

            7    Tools of Monetary Policy/Conduct of Monetary Policy:  Goals and Targets

            9    The Demand for Money

          14    The Keynesian Framework and the ISLM Model

          16    Monetary and Fiscal Policy in the ISLM Model

21    Aggregate Demand and Supply Analysis

          23    Transmission Mechanisms of Monetary Policy: The Evidence/

   Review Final Exam

          28    Final Exam, Chapters 10, 14 – 18, 22-26 Homework Set #3

          30    Money and Inflation/Rational Expectations: Implications for Policy



Academic honesty is required, hence, the university will not tolerate cheating or plagiarism on tests, examinations, or other course assignments.  Students who engage in such dishonesty may be given failing grades or expelled from the university.

Attendance is required.  Classes missed for legitimate reasons (e.g., illness, death in family, work assignments, temporary duty) are excusable; however, a student who is absent from a class is responsible for all material covered during the class period.  Two consecutive weeks of unexcused absences are defined as excessive and result in an administrative withdrawal and a grade of "F" (attendance) for the course.  An "I" may not be assigned to students with excessive absences.  Students are required to read the current Park University Bulletin for the school's policies, procedures and standards.

Please note, the instructor loves economics and is accessible for any assistance you may require.  E-mail address:, and (H) 585-7659.  Voicemail 564-5803 Mail Box 600. Good Luck!


Faculty Biographical Information Sheet

Faculty Name:  Cynthia Williams

Education:  M.S. Economics The University of Texas at El Paso 1994

                     B.B.A. Economics/Finance The University of Texas at El Paso 1987

Current Occupation:  Economics Instructor

Park Faculty Member Since:  August 2001

Contact Phone Number: 564-5803

Park University Voicemail Box  #:  600

Email Address: