Introduction
Financial markets evolve from interactions of the market participants within the boundaries of market institutions. The objective of this course is to provide an in-depth overview of how financial markets work and how they are used by the聽different participants: Corporations and governments seeking to raise funds supplied by private and institutional investors in search of return on savings. Understanding the mechanisms by which securities are traded and implications of efficient and liquid markets for bonds, stocks, foreign exchange, and derivatives, are key learning objectives.聽
The course addresses the following United Nations Sustainable Development聽Goals (UN SDGs), which make understanding the functioning of financial markets essential for improving the welfare in the economy:
- Reduced inequalities: Financial markets aim at redistributing resources聽from the ones that are in excess of funds聽to the ones that are in need of funds in order to invest them in innovative and viable projects. This risk sharing and redistribution helps to reduce inequality by providing greater聽opportunities聽to those with less聽resources but good聽ideas.
- No poverty: The reduction of inequality facilitated by financial markets aids to reduce and prevent poverty among the ones who are in need of funds.
- Decent work and economic growth: Ultimately, the efficient redistribution of resources facilitated by financial markets聽leads to higher economic growth and reduction of unemployment in the economy.