Macroeconomic policy and financial markets
[C225]
Macroeconomic
policy and financial markets focuses on the relationship between
macroeconomic policies and financial markets. How do central
banks’ policies on interest rates and credit relate to financial
markets? What is the relation between budget deficits and
financial markets? How do financial markets relate to investment
and savings flows? The course includes both theory and empirical
material.
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Microeconomic principles and policy
(currently under development)
This course is currently under development. Please check back
here soon for more information about the course.
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International finance
[C229]
This course is
concerned with the institutions of international finance and the
key policy problems that have arisen in recent decades. It
presents a policy-oriented perspective, similar to that an
economist would use when advising governments on how to work
within the modern international financial system and how to
overcome its problems. The course aims to familiarise students
with the three key concepts necessary for understanding the
problems of policy formulation within the international
financial system: the institutional structure of the modern
international financial system; the principles of financial
policy analysis for an open economy; and the principles
affecting some current policy issues in international finance.
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The International Monetary Fund and economic policy
[C213]
This course
introduces a number of concepts and approaches — in particular,
disequilibrium and structuralist models of macroeconomics and
finance. One of the main aims of this course is to encourage
self-directed study. Whereas the earlier courses direct students
along a firmly structured path, this course sets the broad
parameters within which a relatively independent mode of study
is encouraged, with optional topics provided for the
investigation of special interests. The macroeconomics studied
in other courses is based on equilibrium (or neo-classical)
models. In addition, this course introduces disequilibrium and
structuralist models and aims to familiarise students with the
main ideas, concepts and techniques needed to understand these
models.
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Public financial management: planning and performance
[C201]
In this course you will be introduced to the methods and issues
of public financial management. You will examine subjects
including cost management, budgeting, expenditure control
techniques, accounting for public spending and performance
budgeting.
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Public financial management: revenue
[C205]
In this course you will study the theory and practice of public
finance with special reference to how governments raise revenues
and how they use taxation to pursue policy aims. The course is
mainly concerned with taxation, borrowing and aid.
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Finance in the global market
[C242]
Financing the
global firm: multinational cost of capital and capital
structure; sourcing debt and equity globally. Measuring and
managing foreign exchange exposure. Foreign investment
decisions. Corporate strategy and foreign direct investment.
Foreign ventures. International portfolio investment.
Multinational capital budgeting. International acquisitions and
valuation. Country risk analysis. Multinational taxation. Legal
aspects of foreign direct investment and multinational
corporations.
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Bank regulation and resolution in
banking crises (currently under development)
Bank crises occur frequently in many countries and across many
time periods. Many go beyond the distress of individual banks
and have systemic effects, threatening the banking system as a
whole. Since the nineteenth century governments and central
banks have developed increasingly sophisticated methods to
regulate banks in order to minimize the risk of bank distress
and intervention tools to mitigate its effect. Since crises
recur, as in the USA and United Kingdom in 2007, they motivate
heightened discussion of the merits of regulation and
intervention and their design. In this course you study
technical aspects of bank regulation, supervision, and
intervention to resolve crises. It relates the techniques to
fundamental principles and to examples of countries' experience.
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Banking and capital markets
[C226]
This course covers
the role of banking and finance in the economy. It introduces
some of the central issues and ideas in modern theories of
banking and finance in the light of recent thinking about the
relationship between banking, finance and the real economy. In
this course, finance is examined within a general framework
concentrating on the experience of advanced capitalist
economies, including an introduction to the current concern with
derivatives. As a contrast, applications to less developed
economies are also, briefly, considered. The course is organised
around four principal themes: the relationship between financial
markets, financial institutions, and the economy’s real
investment and savings; the trade-off between risk and expected
returns and their links to information and monitoring; the
efficiency of financial markets; and the dialectic between
regulation and deregulation or liberalisation of financial
markets.
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Quantitative methods for financial management
[C219]
This course
introduces some of the quantitative methods of financial
management which are commonly used by financial analysts, firms’
managers and individual investors. It examines techniques for
the valuation of different classes of securities, analyses
criteria for guiding investment decisions, considers the
measurement of asset risk and return and discusses statistical
techniques of forecasting. The MICROFIT computer package is
provided for regression analysis and diagnostic procedures. The
aim of the course is to give students confidence and skill in
the use of the mathematical and statistical methods used in the
analysis of financial instruments and financial markets,
including the calculation of financial market yields and prices,
frequency distributions, risk and probability, correlation and
regression analysis. Statistical inference, the multiple linear
regression model, autocorrelation, and risk reassessment and
investment are all topics covered in the course, which teaches
not only the relevant theoretical concepts but, in the belief
that quantitative techniques can only be learned by doing, gives
abundant practice in the manipulation of numerical material with
problems and exercises.
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Risk management: principles and applications
[C323]
Risk management: principles and applications examines the
techniques and the foundation of risk management in
corporations. It covers the use of derivatives, portfolio
allocation, the value of risk, and the management of credit risk
and operations risk. This course has four main aims: to
illustrate the main types of risk; to present the most important
ideas and methods used in the analysis of portfolios of
financial securities, (including stocks and bonds); to explain
how rational investors can use financial derivatives (mainly
futures and options) in order to alter the risk of their
investment position; and to illustrate some more specialised
risk management techniques (such as Value at Risk and Credit
Risk).
Unit 1 Introduction to risk management
Unit 2 Portfolio analysis
Unit 3 Management of bond portfolios
Unit 4 Futures markets
Unit 5 Options markets
Unit 6 Risk management with options
Unit 7 Value at risk
Unit 8 Credit risk
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Econometric principles and data analysis
[C230]
This course
examines the interaction and confrontation between economic
theory and economic data. It is concerned with the use of
statistical and mathematical methods in analysing economic data,
with the aim of providing economic theories with sufficient
empirical foundation to enable them to be verified or refuted.
Central attention is given to regression analysis — the major
tool of statistical analysis in econometrics, to hypothesis
testing and the treatment of heteroscedasticity and
autocorrelation. The MICROFIT computer package is provided for
regression analysis and diagnostic procedures. Econometrics is
concerned with quantifying economic relations, with the
provision of numerical estimates of the parameters involved and
testing hypotheses embodied in economic relationships. This
course aims to provide a basic introduction to econometric
analysis, to enable students to examine economic theories with
empirical data. In doing so, it examines the difficulties
inherent in confronting theory with economic data in order to
quantify economic relationships, in dealing with errors and
problems in variables which can be only observed but not
controlled, and the means of compensating for uncertainty in
data. Econometric principles and data analysis is
extended by Econometric analysis and applications,
which teaches more advanced techniques in quantitative methods.
This course can be studied in its own right but normally we
would expect it to be taken as part of the MSc or Postgraduate
Diploma programme which provides the theoretical background
required to interpret empirical data using statistical
techniques.
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Econometric analysis and applications
[C232]
This is the second
econometrics course that can be taken as part of the MSc. It
extends the basic introduction to econometric analysis developed
in the core course, Econometric principles and data analysis.
This course teaches the more advanced techniques of dummy
variables, lags and expectations, simultaneous equation models,
non-stationarity and co-integration and forecasting. The course
ends with a brief discussion of ‘further topics for
econometrics’ for students who are particularly keen to develop
their quantitative skills beyond the course. It assumes that
students have studied the classical linear regression model at
an introductory level and that are familiar with the assumptions
which underlie the model. It is also assumed that they have a
basic working knowledge of the econometric software, MICROFIT.
There are many examples to illustrate the main themes in a way
which will help you in both understanding the econometrics and
putting the theory to use with data. This course aims to broaden
knowledge and extend understanding of econometrics. By the end
of the course students should be able to: make progress with
qualitative regressors, dummy variables and the identification
and estimation of simultaneous econometric models; show how lags
and expectations can be incorporated in dynamic models; and
forecast with both econometric and time series models.
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Financial econometrics
[359]
Financial markets and others generate vast amounts of data on
asset returns, their volatility, and other financial variables
in long and high-frequency time series. The ability to analyse
market behaviour requires knowledge of the properties of time
series and appropriate estimation methods. Since the early 1980s
techniques for analysing time series which exhibit
auto-regression have yielded important studies of financial
markets, increasing our knowledge of financial variables’
volatility. In this course you study time series techniques and
their application to financial markets. Before starting this
course students should normally have completed the course
Econometric Analysis and Applications [C232].
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Derivatives [333]
The expansion of financial markets since 1973 has been founded
on the growth of derivatives, both over the counter derivative
contracts and exchange traded contracts. It was made possible by
the development of models for valuing derivatives based upon the
mathematics of stochastic calculus. In this course you learn the
application of those principles to the valuation of derivatives.
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Corporate finance
[C221]
The theories,
examples, and empirical studies in Corporate finance which are
discussed in this course concentrate on the finance of
corporations whose shares are traded on a well organised stock
market. The purpose of the course is to explain the observable
financial decisions of corporations and portfolio managers, and
to interpret the behaviour of the securities markets which
results from the decisions of those and other agents.
Traditionally, the securities markets considered in corporate
finance are ‘spot’ or ‘cash’ stock markets dealing in company
shares and bonds. But modern finance also includes large and
growing markets in ‘derivatives’, especially options and
futures, which are contracts relating to the future prices of
the underlying shares or bonds. To ‘explain the behaviour’ of
any of the financial markets involves explaining how the prices
of shares, bonds and derivatives are determined. The course aims
to enable students to understand and analyse the theoretical
principles relating to corporate finance, and the controversies
and criticisms which surround these theoretical propositions. It
focuses on the relation between corporations’ decisions on
investing in productive (‘physical’) assets and issuing
financial liabilities, and the markets in the financial
liabilities (equities and debt) which they issue. The theorems
concerned with corporations’ decision problems which the course
examines include the Net Present Value Rule, the
Modigliani-Miller Theorem on Dividend Policy and their earlier
seminal Theorem on Debt-Equity Ratios, and Agency Theory; and
the main theorems focusing on the Operation of Financial Markets
analysed are the Efficient Markets Hypothesis, the Capital Asset
Pricing Model, and the Theory of Option Pricing.
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Corporate governance
[C244]
This course
analyses legal/political/economic features of major corporate
governance systems, examining how corporate governance systems
influence the performance of individual firms and the allocation
of capital within a country. It investigates the evolution of
diverse ownership and governance structures across different
economies.
Unit 1 Definitions of corporations and corporate governance
Unit 2 Theory of the firm
Unit 3 Corporate governance and the role of law and the state
Unit 4 Corporate governance systems: equity-led, bank-led and
family-led
Unit 5 Control and board composition
Unit 6 Control and CEO compensation
Unit 7 International corporate governance
Unit 8 Corporate governance guidelines and codes of best
practice in developed, developing and transition economies
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Project appraisal and impact analysis
[C207]
This course will give you a theoretical and applied background
to investment finance. You will study the project cycle from
project identification to project and programme appraisal
techniques, and including financial and economic analysis,
impact assessment and risk analysis.
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Bank financial management
[C222]
This course has a
somewhat more practical orientation than many other courses in
the MSc programme, focusing as it does on the microeconomic
problems of financial management of banking firms. This does not
mean, however, that the course is devoid of theoretical
interest. It also raises some new theoretical problems for
consideration, many of them concerned with the way we need to
conceptualise the banking firm. This course examines the role
and importance of bank financial management to the modern bank.
It teaches the basic models of financial management taught by
University Economics Departments and Business Schools, which
were constructed from the experience of mature capitalist
economies. The course discusses the various trends shaping
banking markets, such as institutionalisation, securitisation,
globalisation and concentration. Among its aims are the
following: to set the banking firm in the context of a changing
financial services industry; to look at the role of the
financial manager within the banking firm; to examine bank
capital and capital structure, and to consider the question of
the adequate regulation of the banking sector to ensure its
safety, to preserve bank liquidity and prevent bank failures.
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Modelling firms and
markets (currently under development)
You will study not
only the behaviour of individual firms, but also how firms
interact with each other in competitive and non-competitive
markets. The course will look at models of stratgeic behaviour
based on the tools of game theory and how firms inteact under
conditions of imperfect formation. This course is currently
under development. Please check back here soon for more
information about the course.
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Research methods
[C253]
The purpose of the course is to provide students with a thorough
understanding of the theoretical concepts, methodological
approaches and reporting issues that underpin good quality
research projects. It is a prerequisite course for completing a
dissertation. The course outlines the issues involved in
planning, designing, executing and reporting research. In
addition it provides students with the opportunity to develop
quantitative and qualitative skills, depending on the
dissertation topic and research interests.
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Dissertation
[C254]
The Research
methods course covers the methodological basis for the final
dissertation. It includes methods for setting up and carrying
out research on issues in development finance and related areas.
The topic for the dissertation to be submitted by MSc students
must be approved by the Programme Director and is expected to
relate to both theory and policy issues.
