Standard

Format Updated: 04/27/05

MKT 113 - Money and Banking

Course Description

Emphasizes the relevance of monetary instruments, intermediaries, and the central banks to local, state, national, and international economics. Topics include: history and evolution of financial institutions; monetary instruments and flow; and central banking, operation, and policies.

Competency Areas	Hours
History and Evolution of Financial Institutions	Class	5
Monetary Instruments and Flow	D. Lab	0
Central Banking, Operation, and Policies	P. Lab/O.B.I.	0
	Credit	5

Prerequisite:	Program admission
Corequisite:

Course Guide

Competency	After completing this section, the student will:	Hours
		Class	D.Lab	P.Lab/ O.B.I.
HISTORY AND EVOLUTION OF FINANCIAL INSTITUTIONS		10	0	0
History	Explain the uniqueness of the U.S. dual banking system.
Evolution	Describe the evolution of the system that regulates U.S. financial institutions.
Regulations	List the primary agencies that regulate commercial banks, savings institutions, and credit unions.
Growth	Name several benefits and drawbacks of the current regulatory system.
MONETARY INSTRUMENTS AND FLOW		20	0	0
Terms	Define terms related to monetary instruments and flow.
Functions	List three functions served by banks.
Money	Describe three basic functions of money.
Payments	Explain the evolution of the American payments system into its present form.
Money supply	List two approaches to measuring the money supply.
	Distinguish among the four measures of money used by the Federal Reserve System.
Financial markets	Describe the basic function of financial markets.
	List the four classifications of financial markets.
	Explain the four characteristics of financial markets.
Financial intermediaries	Identify three major categories of financial intermediaries.
	Explain why and how the government regulates financial markets.
Interest rates	List three methods of measuring interest rates.
Balance sheet	Explain the purpose of a bank's balance sheet.
	List some assets and liabilities that make up a bank balance sheet.
	Name several methods that can be used by banks to manage their assets and liabilities profitably.
Financial institutions	Differentiate among financial institutions handling transaction accounts (i.e., thrifts, banks, and credit unions).
Nonbank financial institutions	Describe the purpose and general structure of pension plans.
	List the types and purpose of finance companies, mutual funds, investment brokers, and insurance companies.
Technology	Explain how technological changes have resulted in financial innovations.
Regulations	Summarize financial services regulations during the past 20 years and the impact of these regulations on the financial services industry.
CENTRAL BANKING, OPERATION, AND POLICIES		20	0	0
Federal Reserve Act	Explain how and why the Federal Reserve System was established.
	Describe the structure of the Federal Reserve System.
	List ways the Federal Reserve controls the money supply.
	Explain why the Board of Governors and the chairman of the Federal Reserve are so powerful.
Money supply	Describe the roles of the central bank, depository institutions, depositors, and borrowers in the money supply process.
	Explain the impact of changes in the Federal Reserve balance sheet on the money supply.
	Explain the impact of the behavior of banks, depositors, and borrowers on the money supply process.

Suggested Resources

Books

Kamerschen, D. R. (1988). Money and banking (9th ed.). Cincinnati: South-Western.

Kidwell, D. S., & Peterson, R. L. (1989). Financial institutions, markets, and money (4th ed.). Chicago: Dryden Press.

Klausmeia. (1988). Money and banking. Chicago: Institute of Financial Education.

Miller, R. L., & Pulsinelli, R. W. (1989). Modern money and banking (2nd ed.). New York: McGraw-Hill.