This course aims at introducing the functioning of financial markets and the role they play in an economy, with particular attention at the main financial institutions and the products and services that they trade. The course focuses mainly on international markets, however with frequent references to specific countries (Europe, US, Rest of the World), for the purpose of evidencing similarities and differences, and of underlining the importance of international relationships between markets and institutions.
Knowledge and understanding:
- knowing why financial markets and institutions exist, how they function and how they are structured and organised
- knowing the main constraints affecting the functioning of financial markets and institutions, especially towards information asymmetries and financial crisis
- knowing the main contractual features of the leading financial products and services
- knowing similarities and differences of financial markets and institutions at the international level
Applying knowledge and understanding:
- describing the main features of financial markets and institutions
- describing the mechanics and the main distortions caused by information asymmetries and financial crisis
- applying evaluation tools on financial products and services
- describing financial intermediation at the international level
Making judgments:
- evaluating differences in risk and return of the main financial instruments
- evaluating the performance of the main classes of financial intermediaries
- selecting financial markets and institutions consistently with the financial needs of families and firms
Communication skills:
- understanding and applying the technical language specific to financial markets and institutions
- expressing knowledge and critical opinions effectively on the main features of financial instruments, markets and institutions
Learning skills:
- autonomously research relevant data on financial instruments, markets and institutions
- autonomously manage and interpret financial data

Preconditions (knowledge needed to successfully attending this course that will be assumed already acquired by students): Financial Mathematics, Macroeconomics.
Propedeuticities: Accounting.

Main topics:
- Structure and functioning of financial markets
- Interest rates: economic and financial role, determinants and structure
- Efficiency of financial markets: evidence and economic consequences
- Money markets
- Bond markets and bond evaluation
- Stock markets and stock evaluation
- Foreign currencies and international financial markets
- Financial crisis: nature and economic impact
- The role of central banks and monetary policy
- Banks: structure, role and performance
- Mutual funds
- Insurance companies and pension funds
- Other intermediaries
- Financial risk management through derivatives

SEMINARS: typically, past topics included the role of ESG in financial markets, Islamic Finance, commodities, trading (conditional to speakers' availability).

Mishkin F.S. and Eakins S.G. (2024), Financial markets and institutions, Pearson, 10th Edition. Earlier versions are fine, but they are not up to date. Additionally, it is advised to constantly read and interpret specialised newspapers and autonomously extend the knowledge by reading the bibliographic references suggested by the textbook. Finally, it is useful to check the online material offered by the editor of the textbook.

These are the references between our classes and the handbook. A1: 1, 2, 16, 18 A2: 3, 4, 5 A3: 6 (+ class references) A4: 11 A5: 12 A6: 13 A7: 14 A8: 15 B1: 7, 8, 25(W1) B2: 9, 10 B3: 17, 19 B4: 20 B5: 21 B6-7: 22, 26(W22), 27(W) B8: 23, 24

Most lectures follow the traditional front-lesson approach, however encouraging the active participation of students and the joint discussion of market data and business cases. Moreover, the course involves a number of class exercises, as well as a limited number of numerical simulations and role-playing games. Finally, the lecturer will organize one or two seminars delivered by experts or operators in financial markets.

Students are advised to consider the teaching materials provided on Moodle. There are no differences in terms of exam, grading or teaching materials for students that choose not to attend classes. However, they are encouraged to get in touch with the lecturer if they need further explanations or additional readings on this course's topics.

Grading is based on a final written exam and a non-mandatory oral exam. The written exam is required for all students. It consists of three parts: 1) ten multiple choice questions; 2) one open question with short answer; 3) one numerical exercise. Multiple choice questions address basic concepts of this course, such as definitions and overarching features of financial markets, institutions and instruments. Each question has 4 alternatives, of which only one is correct. Each correct answer is worth 1 point and there is no penalty for wrong answers. However, it is required to provide a correct answer to at least 5 of these 10 questions, otherwise the test will be considered failed. Examples of these questions are covered during classes. The open question addresses a more advanced understanding of one of the topics covered during classes. It requires a short answer, no longer than 10 handrwitten lines. The focus is on the ability to correctly identify and describe the most relevant aspects pertaining to the topic. A few examples: 1) Describe the most relevant assets and liabilities (or revenues and costs) of a financial institution; 2) Describe the main players (or instruments) pertaining to a specific financial market; 3) Illustrate the main advantages and disadvantages of a specific financial performance metric (such as the yield to maturity, the duration, the dividend discount model, etc.). This question is worth up to 10 points, awarded on the basis of the correct identification of the most relevant contents pertaining to the question, and the quality of the explanation (level of knowledge, proper use of technical language, ability to sum up). The numerical exercise will require participants to provide a specific calculation for a financial performance metric that was presented and discussed during classes. A pocket calculator can be used. The exercise is worth up to 10 points, awarded on the basis of the correctness of the calculation and the quality of the explanatory text that is strongly suggested to add in order to help the lecturer's review process. The exam, assuming that at least 5 multiple choice questions are right, is passed with a total score of at least 18, summing its three parts. The oral discussion is non mandatory and it is designed for those aiming at higher grades. The choice is given to participants obtaining at least 25 in the written exam. Who does not wish to take this chance will get a maximum grade of 25, even if their starting score is higher. The oral discussion can increase this value up to the maximum grade, but can lead on a downgrade of maximum 2 points if the performance is particularly poor. With a score between 18 and 24 no oral will take place and the grade will be confirmed. With 25-30 from the written exam, those choosing not to take the oral exam will get 25. Those taking the chance will get from 2 grades lower (23 with a score of 25, 24 for 26, and so on) to 30 with honors. The oral discussion is based on one or two questions, for a total of 5-15 minutes (the shorter the better is the outcome). The questions require to apply evaluation tools in a real-world scenario taken from financial markets, institutions, instruments or recent news on them. The purpose is to demonstrate higher levels of understanding, competence, critical thinking and application of knowledge. The oral exam will typically take place one or two days after the written exam, but for qualified needs (family care, transportation issues, work-related problems, ...) the correction and the oral exam can take place immediately after the written exam.

The main aims consistent with the Sustainable Development Goals targeted by part of this course's contents are:
1. No poverty: a few classes are dedicated to discuss the relationship between financial institutions and household savings/borrowings/risk management, and what role is played by financial education in promoting a sustainable financial behaviour.
2. Good health and well-being: a few classes are dedicated to the issue of the ageing society, and how pensions can address this basic need of people.
3. Decent work and economic growth: a few classes are dedicated to the issue of work ethics in financial institutions, and how it may promote growth and reduce the risk of tail events in the financial system
4. Industry, innovation and infrastructure: a few classes are dedicated to the FinTech phenomenon, and how it may addess sustainability and inclusion issues in the financial sector
5. Reduced inequalities: a few classes discuss how financial education may promote greater economic/financial resilience and equality for households, with the contribution of financial institutions.