COURSE NUMBER:                                    EWMBA 232-1
 
COURSE TITLE:                               Financial Institutions & Markets
 
UNITS OF CREDIT:                         3 units
 
INSTRUCTOR:                                  Jim Wilcox

EMAIL:                                              jwilcox@haas.berkeley.edu
 
MEETINGS DAY(S)/TIME:             Thursday, 6.00 – 9:30pm

PREREQUISITE(S):                          EWMBA203

CLASS FORMAT:                             Lectures and in-class discussion

REQUIRED READINGS:                Custom reader and current articles

BASIS FOR FINAL GRADE:          Homework (20%), midterm (30%), In-class performance (20%), and team project (30%)

ABSTRACT OF COURSE'S CONTENT AND OBJECTIVES:
This course shows how interest rates link the performance of macroeconomies and of financial markets to the risks and returns that are faced by businesses, financial institutions of all kinds, and by individuals with substantial assets or liabilities.

These capabilities are valuable for those who make corporate valuation and financing decisions and for investment managers at financial institutions or for high-net-worth individuals.

Students will gain skills and experience in understanding and responding to interest rates. We will discuss when, how much, and why rates and yields differ for various corporate debts and government bonds. We will see how and why the financial crisis fundamentally changed the policies of the Fed and other central banks. We will see what the incoming Chair should consider and might do about the Fed’s massive bond buying spree. We also will discuss when and why rates and yields will rise and fall.

We will learn how, and why, to measure and manage the interest-rate, the credit, and the liquidity risks that doing business imposes on financial firms, as well as on nonfinancial firms. Those skills also will point to ways to reduce—or pile on more—risks. Finally, we will show how compensation policies can encourage employees to “bet the firm” with hidden risks.

Often, a student or two will be called on to make a very brief presentation on a class-relevant topic that the student chose on the basis of a recent event or report, such as a Wall St. Journal or Economist article. Rather than a final exam, teams of students will produce a report of their analysis for their client, who is either a financial institution or a high-net-worth individual.

BIOGRAPHICAL SKETCH: 
Jim Wilcox teaches courses on macroeconomics, on financial markets and institutions, and on risk management in financial institutions.         

He has written widely on bank lending, Federal Reserve policies, credit markets, real estate markets, credit unions, and macroeconomics.  Among other topics, his research has addressed reform of the FDIC, the ability of banks to reduce costs following mergers, differences in bank supervision and regulation around the world, the effects of bank loan losses and capital pressures on lending and small businesses, the effects of the baby boom (and bust) on house prices, how bank mergers affect small business lending, economies of scale in credit unions, and why so many households do not have bank accounts.

From 1999-2001, Jim was the Chief Economist at the Office of the Comptroller of the Currency, the leading U.S. banking regulator.  He has also served as the senior economist for monetary policy and macroeconomics for the President’s Council of Economic Advisers during 1990-91 and, after that, as an economist for the Board of Governors of the Federal Reserve System.

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