[Financial Markets, Financial Institutions, the Power of Information, and Financial Policies]
WEEK
1. An Overview of Financial Institutions and Markets
• The Financial System of an Economy • The Structure of a Financial System • The Stock Market
2. Emerging Markets, African Markets and Capital Market Development
• Financial Markets and the Organized Exchange • Characteristics of Emerging Capital Markets • Indicators of Capital Market Development
3. Financial Regulation, Intermediation, Capital Market Structures and Development
• The Players in a Typical Capital Market:
- Capital Market Intermediaries - The Regulator: The Capital Market Authority - The Stock Exchange [NSE] - Investors - Government
• The Institutional, Regulatory and Legal Framework in Financial Markets
- Types of Regulations in Financial Markets - Market Based Banking Regulations - Crisis in Banking Regulation.
4. Securities and Their Characteristics
• Shares, Fixed Income Securities, Derivatives • Challenges of Trading of securities in the Stock Market • Why Derivatives Trading is Absent in Most Emerging Markets
5. Financial Contracting Under Imperfect Information
• Sources of Financial Information • The Principal-Agent Problem(Jensen & Meckling, Hairs & Raviv, Townsend’s CSV Model) • Asymmetric information and Financial Market Failure • Moral Hazard in Financial Markets • Financial Market Failure • Credit Rationing in Financial Markets • Adverse Selection: Screening
