Econ 106M - Financial Markets and Financial Institutions

This course examines the critical role of financial intermediaries—including banks, insurance companies, and securities firms—in the global economy. Students study the day-to-day operations of these institutions and how they attract savings and create investments through financial services, securities, loans, and advice. Core topics include the time value of money, risk analysis, bonds and the term structure of interest rates, equities, derivatives, and financial regulation. The course emphasizes the Federal Reserve’s role in monetary policy and its impact on money supply and interest rates to achieve price stability and full employment. Special attention is given to financial crises, including the 2007-2009 crisis, examining whether such catastrophic losses can be prevented or mitigated. Classes begin with discussions of current financial news, applying analytical frameworks to real-world events, and the course includes a required research paper on a finance topic of the student’s choosing.