RSM2304H – Financial Institutions and Capital Markets

General Information

Instructor Bio

Professor Célérier has award-winning teaching experience with both undergraduate and graduate students. Her research focuses on the role of financial institutions in the channeling of capital flows to firms and households, drawing on methods from behavioral finance to empirical banking history to asset pricing, and spanning the areas of household finance, banking, and economic history.  Her work has been published in top refereed academic journals, including the Quarterly Journal of Economics, and has raised the interest of several central banks and regulators around the world, such as the European Central Bank and the UK Financial Conduct Authority. Professor Célérier’s new research includes innovative interdisciplinary perspectives at the nexus of finance and history, investigating how financial institutions targeted specific populations in 18^th-century France and the 19^th-century United States.

Target Audience

Either as an individual investor or a manager, you will need to interact with financial institutions. Financial institutions, such as banks, hedge funds, mutual funds and money market funds, are central to financing decisions that have long-lasting effects both on the wealth of households and on the value of firms. Therefore, understanding the functioning of financial institutions and their interaction with capital markets is crucial to make optimal strategic and personal decisions. 

Financial institutions, and banks in particular, operate in a very unique way, which differs from other firms: they are prone to crisis, are bailed out, subject to heavy regulation, and serve as a major transmission channel of monetary policy and macro-economic shocks.   Therefore, the course would be of great interest to any student, including those contemplating a career in banking as well as students just wanting to gain general knowledge on the functioning of capital markets, financial institutions and the economy in general.

The course is particularly well suited to anyone willing to gain some general knowledge and historical perspectives on the functioning of our institutions today. The material is accessible and general enough for all business majors as it provides a solid understanding of financial markets needed by anyone working in business management.

Course Mission and Scope

The financial landscape is rapidly evolving as we are facing an unprecedented health and economic crisis. Many of the themes of this class have special relevance today: how banks and credit markets amplify or absorb economic shocks, how banking regulation limits the risks of a banking crisis, how monetary policy affects growth and inequalities, how financial institutions channel funds from households to firms, how central banks curb inflations. Examining these questions will provide you with a holistic view of finance, capital markets, and the role of financial institutions.

This class combines sources from history, economics and political science to examine how financial institutions and capital markets are designed, how their regulation works, and how it affects the allocation of capital in the economy, with implications for future growth, inequalities and welfare. For each institution or market we will study, from banks to OTC markets, we will investigate the economic rationale behind their design and regulation, as well as the historical and political context that shaped them. We will use simulations, historical case studies, and managerial case studies.

A greater understanding of the concepts of this course is useful beyond banking and has applications in general management, corporate strategy, entrepreneurship, as well as in any individual investment or mortgage decision.

Evaluation and Grade Distribution

Component	Due Date	Weight
Class Participation	Ongoing	20%
Cases/Assignments	Ongoing	50%
Final Exam	During Exam Period (April 10-21, 2023)	30%

Required Resources

A course package of readings and cases will be available. The instructor has also developed several course notes which supplement reading material and are available through Quercus.

Last Updated: 2022-09-28 @ 10:49 am

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