In this course students will learn the fundamentals of financial institutions and markets, along with risk measurement and management. Through readings, lectures, real-world case studies, and assignments, students will gain an understanding of how financial institutions and markets work, the basics of how financial instruments are priced, and then primarily through case studies examine how risk measurement and management failures led to disasters in financial markets, institutions and/or products.
The introduction to the course will focus on financial institutions. It will cover depository institutions, finance companies, securities firms and investment banks, mutual funds and hedge funds, along with insurance companies. Then, we will cover risk measurement and management, along with specific case studies to illustrate real-world examples of failures. Risk measurement will cover the basic concepts across risk stripes: interest rates, credit, liquidity, FX, sovereign, market and fintech, to name a few. Risk management will cover a variety of concepts related to fundamental risk management practices and capital adequacy.