Global Banking Lesson 5 Introduction to Financial Markets
Global Banking Lesson 5 Introduction to Financial Markets

Time: 40 minutes
Skills: Holistic Thinking
Objectives 1,2 & 4
Related Resources:
- Banking Lesson 5 PowerPoint 
- Boughton, James. (March 2009). A New Bretton Woods?. Finance and Development, pp. 44-46. Retrieved from: http://www.imf.org/external/pubs/ft/fandd/2009/03/boughton.htm  
- Cooper, Richard. (September 2009). The Future of Dollar. Policy Brief (PB09-21). Peterson Institute for International Economics, pp. 1-6. Retrieved from: http://iie.com/publications/interstitial.cfm?ResearchID=1290.
-
Truman, Edwin. (2007, April 17). The Role of US and EU Financial Markets in the Global Economy. Remarks at the conference The Euro and the Dollar: Pillars in Global Finance, Federal Reserve Bank of New York, pp. 1-4. Retrieved from: http://ec.europa.eu/economy_finance/events/2007/20070417/truman.pdf

Before starting the Powerpoint, the instructor should introduce a couple of examples of financial markets, noted in the glossary: capital markets, commodity markets, insurance markets and foreign exchange markets

The instructors lectures and discusses basics of the international financial markets using the lecture notes and the PowerPoint presentation.

Discussion Questions

  1. How do international financial markets function and why do they grow/contract?
  2. What are the upsides and downsides to the growth of financial markets and the factors that lead to their growth: innovation, deregulation, and IT advances?
  3. Who issues/buys/sells stocks and bonds and why? Is the bond market or the stock market bigger and why?
  4. What is the difference between a currency market and the exchange rate?
  5. What are the advantages and disadvantages of having most financial transactions taking place in dollars or Euros?
  6. Why would a country have foreign reserves in a currency belonging to another country?
  7. Why are international financial markets a crucial part of today’s world?

The instructor should end the class with one of the following activities.

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