ESCP Europe

NEW! Material on Financial Markets and Institutions. In light of ongoing research and changes in financial markets and institutions, we have added the following material to keep the text current: A new Mini-Case box on the Raj Rajaratnam and the Galleon insider trading scandal (Chapter 6) A new section on why the efficient markets hypothesis does not imply that financial markets are efficient (Chapter 6) A new Mini-Case on collateralized debt obligations (CDOs) (Chapter 8) A new Global box on the European Sovereign Debt Crisis (Chapter 8) A new section on macroprudential versus microprudential supervision (Chapter 18) A new section on too-big-to-fail and future regulation (Chapter 18) A new web chapter on financial crises in emerging market economies that provides a much more extensive treatment of financial crises in these countries NEW! Material on Monetary Policy. In the aftermath of the global financial crisis, there have been major changes in the way central banks conduct monetary policy. This has involved a substantial rewriting of Chapter 10, along with the following new material. A discussion of the new monetary policy tool, changing the interest paid on reserves, and a new Inside the Fed box on why the Fed pays interest on reserves (Chapter 10) A new section on nonconventional monetary policy tools and quantitative easing (Chapter 10) A new Inside the Fed box on Fed lending facilities during the global financial crisis (Chapter 10) A new Inside the Fed box on Ben Bernanke and the Federal Reserve Adoption of Inflation Targeting A more extensive discussion of the debate over whether central banks should try to pop bubble(Chapter 10) A new section of the policy trillemma (Chapter 16) A new section on monetary unions (Chapter 16) A Mini-case on if the Euro will survive

PART I: INTRODUCTION --- 1. Why study financial markets and institutions? --- 2. Overview of the financial system --- PART II: FUNDAMENTALS OF FINANCIAL MARKETS --- 3. What do interest rates mean and what is their role in valuation? --- 4. Why do interest rates change? --- 5. How do risk and term structure affect interest rates? --- 6. Are financial markets efficient? --- PART III: CENTRAL BANKING AND THE CONDUCT OF MONETARY POLICY --- 7. Structure of central banks and the federal reserve system --- 8. Conduct of monetary policy: tools, goals, strategy, and tactics --- PART IV: FINANCIAL MARKETS --- 9. The money markets --- 10. The bond market --- 11. The stock market ---12. The mortgage markets --- 13. The foreign exchange market --- 14. The international financial system --- PART V: FUNDAMENTALS OF FINANCIAL INSTITUTIONS --- 15. Why do financial institutions exist? --- 16. What should be done about conflicts of interest? a central issue in business ethics ---PART VI: THE FINANCIAL INSTITUTIONS INDUSTRY --- 17. Banking and the management of financial institutions --- 18. Commercial banking industry: structure and competition --- 19. Savings associations and credit unions --- 20. Banking regulation --- 21. The mutual fund industry --- 22. Insurance companies and pension funds --- 23. Investment banks, security brokers and dealers, and venture capital firms --- PART VII: THE MANAGEMENT OF FINANCIAL INSTITUTIONS --- 24. Risk management in financial institutions --- 25. Hedging with financial derivatives on the web --- 26. Finance companies appendices on the web chapter --- Chapter 4 Appendix 1: Models of asset pricing --- Chapter 4 Appendix 2: Applying the asset market approach to a commodity market: the case of gold --- Chapter 4 Appendix 3: Loanable funds framework --- Chapter 4 Appendix 4: Supply and demand in the market for money: the liquidity preference framework --- Chapter 8 Appendix: The Fed's balance sheet and the monetary base --- Chapter 14 Appendix: balance of payments --- Chapter 20 Appendix: Evaluating FDICIA and other proposed reforms of the banking regulatory system --- Chapter 25 Appendix: More on hedging with financial derivatives..