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Money and Financial Markets

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Money & Financial Market Syllabus DU

Unit 1
Money: concept, functions, measurement; theories of money supply determination.

Unit 2
Financial institutions, markets, instruments, and financial innovations
Role of financial markets and institutions; problems of adverse selection and moral hazard; financial crises
Money and capital markets: organisation, structure, and reforms in India; role of financial derivatives and other innovations

Unit 3
Interest rates
Determination; sources of interest rate differentials; theories of term structure of interest rates; interest rates in India

Unit 4
Banking System
Balance sheet and portfolio management
Indian banking system: changing role and structure; banking sector reforms

Unit 5
Central banking and monetary policy Functions, balance sheet; goals, targets, indicators, and instruments of monetary control; monetary management in an open economy; current monetary policy of India

References 
1. Baye, M., Jansen, D. (2006). Money, banking and financial markets. AITBS.
2. Bhole, L., Mahukud, J. (2017). Financial institutions and markets, 6th ed. Tata McGraw-Hill.
3. Fabozzi, F., Modigliani, F., Jones, F., Ferri, M. (2010). Foundations of financial markets and institutions, 4th ed. Pearson Education.
4. Jadhav, N. (2009). Monetary policy, financial stability and central banking in India. Macmillan.
5. Khan, M. (2015). Indian financial system, 9th ed. Tata McGraw-Hill.
6. Mishkin, F., Eakins, S. (2017). Financial markets and institutions, 8th ed. Pearson.
7. Mohan, R. (2011). Growth with financial stability: Central banking in an emerging market. Oxford University Press.
8. Various latest issues of RBI Bulletins, Annual Reports, Reports on Currency and Finance, and Reports of the Working Group, IMF Staff Papers.

Keywords
Money, financial institutions, financial innovations, banking, monetary policy

Amendment as per the last meeting on 11th January, 2022
MONEY: Concept, Functions, Measurement, Theories of Money Supply Determination
1. Baye and Jansen Chapter 1 (p 2 – 27); Chapter 14 (p.465-486) 2. N Jadhav Chapter 2 Section 2.1, (p.18 –25); Section 2.3 (2.3.1 to 2.3.6) (p.37-45); Annexure 2.1 3. RBI Report Money Supply Analytics and Methodology of Compilation 1998 chapter 2 (p.11-17)

FINANCIAL INSTITUTIONS, MARKETS, INSTRUMENTS AND FINANCIAL INNOVATIONS: a) Role of Financial Markets and Institutions; problems of asymmetric information – adverse selection and moral hazard, financial crisis 
1. M Y Khan Chapter 1 2. Fabozzi et al. Chapter 2 (p.23-26) 3. Baye and Jansen Chapter 5 (p.153-161) 4. Mishkin & Eakins Chapter 15 (p 369 – 396)

b) Money and Capital Markets; Organization, Structure and Reforms in India; Role of Financial Derivatives and Other Innovations 1. M Y Khan Chapter 9 (9.29-9.32) 2. Bhole Chapter 5 (p.137-146) 3. Fabozzi et al Chapter26 (p.496 -504) Chapter27 (p.517-529) Chapter30 (p.577 - 580)

INTEREST RATES: Determination, Sources of interest rates differentials, Theories of term structure of interest rates ; interest rates in India 
1. Baye & Jansen Chapter 8 (p.236-251) Chapter 9 (p.274-294) and chapter 10
2. RBI Report, October 4, 2017 ‘Report of the Internal Study Group to Review The Working of the Marginal Cost of Funds Based Lending Rate System’, Reserve Bank of India, September, 2017; Chapter 1, (p.1-2) and Chapter 2, (p.5-7). 3.RBI Illustrative Methodology for the Computation of the Base Rate : pg 4-5.  Reform https://rbidocs.rbi.org.in/rdocs/Content/PDFs/BRF090410_AN.pdf
BANKING SYSTEM: a) Balance Sheet and Portfolio Management b) Indian Banking System. Changing Role and Structure, Banking Sector 
1. Sengupta and Vardhan Non-performing Assets in Indian Banks, EPW, Vol. 52, Issue No. 12, 25 Mar, 2017, Money, Banking and Finance 2017
2. RBI RBI , Notification on Prudential Framework for Resolution of Stressed Assets, June 7, 2019, pg1-3.
3. RBI Glossary, Master Circular - Prudential Norms on Capital Adequacy - Basel I Framework – 2012, July 2, 2012.
4. RBI Bulletin Oct 2012 Basel III in International and Indian Context by D.Subbarao Reprinted in Indian Financial Reforms edited by Uma Kapila. 
CENTRAL BANKING AND MONETARY POLICY Functions, Balance Sheet Goals, Targets, Indicators and instruments of monetary control, monetary management in an open economy, current monetary policy of India.
1. Baye & Jansen Chapter 19 (666-687, 692-693, 697-705)
2. Jadhav Chapter 6.2, Chapter 9.3 - except 9.3.7 Chapter 11.2 – 11.2.3
3. M.Y.Khan Chapter 9 (9.1 - 9.10, 9.12-9.13)
4. P. Dua Monetary Policy Framework in India, Indian Economic Review, Vol. 55, Issue 1, June 2020, Pages 117–154 https://link.springer.com/article/10.1007/s41775-020-00085-3
5.Annual Report of RBI 2015 -16 Chapter 3, Box III.1 and III.2 (p. 44, p.50) 6. Annual Report of RBI 2020 - 21 Chapter 3
7. Monetary Policy https://www.rbi.org.in/scripts/FS_Overview.aspx?fn=2752




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