341B2 - University of Alberta

University of Alberta
ECON 341 – B2
Winter 2013
Economics Department
Money and Banking
Instructor: Scott Beesley
Classes: Tuesday and Thursday from 9:30 to 10:50 in T 2 99
Office: Tory Tower 9-13 Phone: 780-248-1322 email: beesley@ualberta.ca
Office hours:
Every weekday from 2:00 to 2:30PM
Prerequisites: Economics 101 and 102 or the equivalent;
Corequisites: None
Note that the prerequisites may be checked, and you
could be removed from the course if you do not have them.
This course provides an introduction to the modern financial system. We consider
questions such as: What is money, how is it created and destroyed, what distinguishes
various types of money, how do banks function, what do central banks do, why do banks
sometimes fail, what are bonds, how are interest rates determined, and how are exchange
rates set We will primarily look at the system as it is supposed to work – however, we
will also spend significant time studying the recent housing collapse/recession in the U.S.
and Europe, and the associated damage within the financial system. We also look at the
banking system within the larger context of overextended public finances, unfunded
liabilities, and possible sovereign defaults.
Textbook:
F. S. Mishkin and A. Serlitis, The Economics of Money, Banking and Financial
Markets, Fourth Canadian Edition, Pearson Education Canada Inc, 2010.
The study guide is useful but is not formally required.
Book(s) on Reserve: None
Some additional readings and examples will be posted or handed out on actual paper, and
the exams will contain questions on the readings and the other non-text materials
covered in class (about 10-12%). The course site is in e-class. Some course notes will be
posted, but there is no guarantee that everything done in class will also be available
online! That site will be used for any postings, including notes, readings, old exams,
excel files, etc.

Course Structure:
Introduction (Chapters 1, 2 and 3)
Financial Markets (Chapters 4, 5, 6, and 7)
Financial Institutions (Chapters 8, 9, 10 and 12)
The Management of Financial Institutions (Chapter 13)
Central Banking and the Conduct of Monetary Policy (Chapters 15, 16, 17 and 18)
International Finance (Chapter 19 and part of 20)
((plus readings throughout))
Grade Determination
Assignment: 20% There is a 1,300 word (maximum) assignment, due on March 28 by
the end of the class. Papers can still be handed or emailed in later, but will lose 25% per
time period, as follows: A paper received later on the 28 th gets marked with the rest, then
that mark is multiplied by 0.75. For the 29 th , the factor is 0.50, the 30 th , 0.25, and zero
thereafter. You should ensure that you receive an email from me confirming that I have
received your assignment, if you send it late via email!
Note that you cannot merely email me a paper by the end of class – that will be hit
with the 25% discount. I want a paper copy handed to me in the room!
I want you to pick one bank, investment bank, brokerage or rating agency and describe
that entity’s history over the last three to five years (i.e. over the period during which the
U.S. housing bubble peaked and then collapsed). I will provide a list of the variables and
factors you might possibly cover (but you don’t have to hit them all!). You should
provide a bibliography of some sort, but I am not picky about format. (The bibliography
does not count towards the word count limit!)
Midterm I: 20%, Midterm II: 20%, Final Exam: 40% (the final will be
cumulative, but more heavily weighted (60%) to the material studied after Mid II)
The first midterm covers chapters 1 to 7 (+ readings) and will be on February 5.
The second midterm will cover 8, 9, 10, 12, 13 and 15 (+ readings), and will be held on
March 14. The midterms will be one hour long and will start at the usual class time.
The final is tentatively scheduled for April 22 at 9:00 AM (but you must check the date,
time and place later!!).
Note that as of the Fall 2010 term, the use of multiple-choice exams was significantly
reduced in this course.

Missed exams:
1) Note that the University has made a change to the policy regarding missed midterm
exams and other term work. Medical notes can no longer be required, in the event of
such missed work. The student may choose to provide a Medical Declaration Form, but
again, that is not a requirement. HOWEVER, the instructor will still have some discretion
as to whether or not the work will be made up, or the weight transferred to the final exam.
Instructors may also require documentation regarding missed work in some cases. Refer
to section 23.4(3) of the Calendar.
2) If you miss the final exam for a valid medical reason or severe domestic affliction, you
may apply to the Faculty of Arts for the privilege of a re-write. Please refer to section
23.5.6 of the University Calendar for the proper procedure. The Faculties of Arts and
Science require that the student complete a Statutory Declaration for in support of their
request for a deferred final.
Behavior and ethics
Students should know the university’s Code of Student Behaviour and abide by it (see
below). You are advised to read section 30.3.2 on “Inappropriate Academic Behavior” in
particular. I do not tolerate loud talking in class, the use of phones etc., and will kick you
out of class after one warning.
Code of Conduct
“Policy about course outlines can be found in ' 23.4(2) of the University Calendar.”
(GFC 29 SEP 2003).
“The University of Alberta is committed to the highest standards of academic integrity
and honesty. Students are expected to be familiar with these standards regarding
academic honesty and to uphold the policies of the University in this respect. Students are
particularly urged to familiarize themselves with the provisions of the Code of Student
Behaviour (online at www.ualberta.ca/secretariat/appeals.htm) and avoid any behaviour
which could potentially result in suspicions of cheating, plagiarism, misrepresentation of
facts and/or participation in an offence. Academic dishonesty is a serious offence and can
result in suspension or expulsion from the University.” (GFC 29 SEP 2003)
The General Office
"Dept of Economics General Office is CLOSED FROM 12-1 PM"
Good luck.