COMM 376 - Financial Institutions I

The course focuses on the roles and operation of major financial institutions, including banks, and the financial markets and systems in which they function, including those involved in the creation and use of fiat and digital forms of money including cryptocurrencies.  

The course caters to a broad range of students, including students who aim to work at or with, or are interested in, financial institutions such as commercial banks or investment banks, and students who are interested in fiat and cryptocurrencies in the financial system and the many ways in which financial markets, payment systems and associated financial institutions are evolving in the face of current developments. The course will also be useful to any student with an inquisitive mind who would like to learn about, and be able to critically evaluate, the evolution of this key part of the financial sector in order to understand how it impacts all other sectors in the economy.   

Learning objectives

Upon successful completion of this course, students should have the ability to:

• Understand the roles of commercial banks, investment banks and related financial institutions in the economy.
• Detect how banks operate and how they are regulated while identifying their systemic risks.
• Analyze the role of central banks in regulating banks and conducting monetary policy.
• Classify payment systems into wholesale payment systems (among financial institutions) and retail payment systems (between consumers & businesses) and identify different payment methods under multiple categories, elaborating on the increasing importance of technology (credit & debit cards, “Apple pay”, distributed ledger, etc.)
• Understand the evolution of fiat money, including how it has developed to meet its functions and the role played by various financial institutions in this process.
• Assess the evolution of cryptocurrencies (e.g., Bitcoin, Stablecoins, Ethereum, etc.) and how they work (coin mining, proof of work, staking, etc.).
• Identify what functions of money different cryptocurrencies currently serve and are anticipated to serve, and analyze their key drivers of success/failure at a micro and macro level and their impact on financial systems, businesses, individuals and financial institutions.
• Examine the roles of governments, banks and other financial institutions across the world in coping with and driving the evolution of the digital era.

Prerequisite: COMM 298.