Overview

This unit expands the understanding of theoretical concepts introduced in prior units on monetary policy and financial markets. Students will be taken through the development, regulation and deregulation of the Australian financial market, and how changes have corresponded to changes in economic thought. The unit provides an overview of monetary theory, debt, equity and derivative markets and the role of derivative products in risk management. The impacts of how changes in official interest rates are transmitted to activity in the real economy are also explored as are current fiscal and monetary policy.

Requisites

Prerequisites
ECO10004 Economic Principles
Teaching Periods
Location
Start and end dates
Last self-enrolment date
Census date
Last withdraw without fail date
Results released date

Learning outcomes

Students who successfully complete this unit will be able to:

  • Explain the special functions of financial institutions and how financial intermediation benefits the economy
  • Explain key balance sheet and regulatory features of the major financial services industry
  • Demonstrate the measurement of net interest risk and explain how interest rate margin can be used as a source of profitability and risk
  • Explain the measurement of credit risk and its impact on the management of financial institutions

Teaching methods

Hawthorn

Type Hours per week Number of weeks Total (number of hours)
Face to Face Contact (Phasing out)
Lecture		2.00 12 weeks 24
Face to Face Contact (Phasing out)
Tutorial		1.00 12 weeks 12
Unspecified Learning Activities (Phasing out)
Independent Learning		9.50 12 weeks 114
TOTAL150

Swinburne Online and OUA

Type Hours per week Number of weeks Total (number of hours)
Online
Directed Online Learning and Independent Learning		12.50 12 weeks 150
TOTAL150

Assessment

Type Task Weighting ULO's
Assignment 1Individual 20 - 30% 1,2 
Assignment 2Individual 20 - 30% 3 
ExaminationIndividual 40 - 60% 1,3,4 

Content

  • The development, regulation, deregulation and performance of the Australian financial system
  • Risks of the financial institutions
  • Regulatory requirements and Off-Balance-sheet activities
  • Interest rate Risk
  • Market Risk
  • Credit Risk
  • Technology and Operational Risk
  • Liquidity and Liability & Liquidity Management

Study resources

Reading materials

A list of reading materials and/or required textbooks will be available in the Unit Outline on Canvas.