International financial markets and institutions

This module introduces students to international transactions and the role of foreign exchange markets.

It also describes the role of key international institutions such as the IMF. Overall, it moves from the single-country focus of other finance modules and gives students an international perspective on finance. Such a perspective is vital for students planning to work at international institutions or firms.

Topics covered

  • The Balance of Payments
  • PPP and the Real Exchange Rate
  • The Monetary Model & Overshooting
  • The Forex (FX) Market
  • FX Microstructure & Derivatives
  • Efficiency of the FX market
  • FX Intervention and Reserves
  • FX Policy Regimes
  • Financial Globalisation and FX Crises
  • Sovereign Debt and Default

Learning outcomes

If you complete the module successfully, you should be able to:

  • Understand and describe how international capital flows are measured and determined
  • Explain foreign exchange trading in spot, forward, swaps and derivative markets
  • Articulate and evaluate issues arising from the use of different foreign exchange policies
  • Demonstrate knowledge of foreign exchange trading conventions and their interpretations
  • Reason critically with respect to alternative foreign exchange trading strategies and choose the best strategy according a set of information available
  • Change a strategy once the set of information changes
  • Create the most suited set of information for the decision-making process
  • Utilize real-time data to estimate and monitor foreign exchange markets and capital flows
  • Utilize professional financial tools and case studies to support decisions
  • Work both independently and in teams to create and manage foreign exchange strategies
  • Present highly technical financial material to non-practitioners simply and clearly
  • Demonstrate skills to present highly technical financial material to non-practitioners simply and clearly
  • Demonstrate ability to synthesise and use information and materials from a variety of different sources to support an argument
  • Demonstrate use of research skills into international financial market problems and issues

Assessment

This module is assessed by:

Coursework (30% weighting):

  • There is one item of coursework for this module which contributes to the final assessment mark for this module:
  • Coursework: a written essay of a maximum of 2,000 or 2,500 words (deadline – weeks 9-12) The coursework is designed to check student progress, extend and reinforce concepts covered and also test individual performance.

Examination (70% weighting):

  • The final piece of assessment will be an unseen written examination of 2 hours’ duration.

Essential reading

The following is provided as part of the course materials after you register:

  • Scott A, Miles D and Breedon F, Macroeconomics, Wiley, 2012

Module author

Professor Francis Breedon, module leader

Professor Francis Breedon

BSc Economics (QMUL), MPhil Economics (Cambridge)

Francis Breedon is Professor of Economics and Finance at Queen Mary. His research is primarily focussed on bond and foreign exchange markets, ranging from detailed microstructure and trading to broader macro policy questions.

He also has extensive industry experience both as an FX strategist and as a consultant to a number of hedge funds, investment banks, Central banks and Ministries of Finance.