Currency markets- SPEC: Finance and Financial Market

1. The course is to deliver practical knowledge on functional and institutional aspects of foreign exchange markets. Students will get acquainted with financial institutions, problems of exchange rate policy, and functioning of international currency markets. They will be provided with practical and up-to-date knowledge of foreign exchange markets, such that they can use it effectively in a wide range of future jobs and in private life.

2. Students are to pick up topics for their bachelor theses, based on research problems discussed during lectures.

3. Students will be trained to become good communicators and presenters, a skill that is essential in financial industry.

- Institutional aspects of currency markets – 4 hours 1. The main actors in currency markets: states and their organizations, central banks, non-financial transnational corporations, investment, hedge and trust funds, banks, insurance companies and other intermediaries, households 2. The role of central banks as currency issuers and foreign exchange policy makers 3. Ranking of central banks 4. The main foreign exchange centers of the world and their evolution 5. International Monetary Fund (IMF) as the central bank of the world. The SDR as its quasi currency 6. The Bank for International Settlements (BIS) - a forum for cooperation of central banks 7. Peculiarities of central banking of the European Union

- Functioning of international currency markets – 3 hours

1. The notion of international money. Hierarchy of world currencies

2. Foreign currency as a commodity. Functions of the main currencies (reserve, intervention, investment, transactional and a store of value)

3. The concept and the functioning of foreign exchange markets

4. The spot, the forwards, and the futures markets

5. The role of currency speculation

6. The concept of the forex arbitrage

- Exchange rate regimes and policy. Types of money convertibility - 3 hours

1. The exchange rate as the price of foreign currency. Types of foreign exchange quotations

2. Short- and long-term determination of exchange rate

3. Systems of exchange rates (from fixed to floating ones)

4. The concept of currency convertibility

5. The typology of currency convertibility

6. Exchange rate stabilization policy

- Foreign exchange policy in transition economies – 2 hours

1. The introduction of convertibility of the national currency

2. The sequence of liberalization of exchange controls and of the internal forex market

3. The problem of maintaining the external equilibrium

4. The evolution of exchange rate systems in the countries of Central and Eastern Europe

5. The Polish forex system after 1989

- Supranational currency integration – 3 hours

1. Monetary integration as an element of economic integration

2. The concept of an optimal currency area

3. Achievements and prospects of European monetary union

4. Euro as the common currency of the united Europe

1. B. Eichengreen „Exorbitant Privilege. The Rise and Fall of the Dollar”, Oxford University Press 2012

2. E. S. Prasad „The Dollar Trap. How the U.S. Dollar Tightened Its Grip on Global Finance”, Princeton University Press 2014

R. E. Caves, J. A. Frankel, R. W. Jones „World Trade and Payments: An Introduction” (10th edition), Addison-Wesley 2007

„The Economist”, „Financial Times”

KNOWLEGDE

Student has advanced knowledge about the contemporary international and global finance environment, understands the changes taking place in the international financial environment and is familiar with the concept of risks and types of risks occurring on international financial markets, as well as the impact these risks have on the modern economy, organizations (enterprises, financial institutions).

SKILLS

Student is able to assess economic and financial phenomena taking place on the national and global scale, determine the opportunities and threats resulting from them for business entities and national economies and their mutual relations against the background of changing global conditions.

SOCIAL COMPETENCES

Student is able to formulate and substantiate critical assessment of economic issues, including financial and social issues, and he/she is aware of the shortcomings and unreliability of his/her knowledge.

1. Making a class presentation with results of home assignments (teamwork)

2. Test