COURSE
NUMBER: MBA 232-1
COURSE TITLE: Financial Institutions & Markets
UNITS OF CREDIT: 3 units
INSTRUCTOR: Jim Wilcox
EMAIL: jwilcox@haas.berkeley.edu
MEETINGS DAY(S)/TIME: Tuesday and Thursday, 9:30-11.00am
PREREQUISITE(S):
MBA203
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.