1. AP/ECON 3430 3.0 A MONETARY ECONOMICS I: FINANCIAL MARKETS AND INSTITUTIONS Fall 2016 Topic IA: Overview of Core Content Course Director: Prof. Brenda Spotton Visano © Brenda Spotton Visano 2016

2. Agenda Part 1A: Introductions to each other Basic course administration Overview of “what” - course content and learning objectives Part 1B: Introduction to “how” – motivating and reviewing course delivery © Brenda Spotton Visano 2016 2

3. Introduction to Each Other Professor Brenda Spotton Visano –Office: 130 McLaughlin –Voice Mail: (416) 736-2100 ext. 20470 –E-mail: spotton@yorku.caspotton@yorku.ca Class mates (in small groups) Which program are you in? Which courses at York did you like the best? Why? Which courses at York did you not like? Why? Why did you choose to enroll in this course? © Brenda Spotton Visano 2016 3

4. Course Administration Prerequisites Introduction to Economics – both Microeconomics and Macroeconomics Texts Recommended Readings are identified for each class in the Detailed Course Outline; all articles are available on- line either publicly or via the York University Library Further Reading references are provided for interest only Course Syllabus – e-copy Other information will be made available on the course website: http://spotton.info.yorku.ca/teaching/3430f16/http://spotton.info.yorku.ca/teaching/3430f16/ © Brenda Spotton Visano 2016 4

5. FAQs Do I need math to pass this course? Do I need to be able to write argument- style essays? Do I have to attend class? © Brenda Spotton Visano 2016 5

6. Overview of the Economy Sectors: Households Private Businesses For Profit Not For Profit Public/Government (Not For Profit) Volunteer © Brenda Spotton Visano 2016 6

7. Goods and Services Sectors GOODS Consumer Goods (Food, Automobiles, Clothing, …) Investment Goods (Machinery and Equipment, …) SERVICES Financial Services Retail Banking (payments services, loans, mortgages…) Investment Banking (portfolio investment, …) Retirement Financing (Pensions) Trustee Services Currency Trading Risk Management, including: Insurance (Property and Casualty/P&C; Life and Health/L&H) Non-Financial Services Household (Personal, Caregiving, Entertainment, …) For-Profit Business (Accounting, Health, Legal, …) Public (Health, Education, Legal, Social Assistance,…) Volunteer/Not-for-Profit © Brenda Spotton Visano 2016 7

8. Overview of the Financial Services Industry What does the industry produce? For whom does the industry produce…? Why does the industry produce…? What are the individual, economic, and/or social benefits of financial services? How does the industry produce…? © Brenda Spotton Visano 2016 8

9. How? What are the constituent elements of the industry? –Financial instruments (including money), financial markets, financial institutions (including central banks) How do they operate? –In Canada, we have a mix of public financial institutions and government-regulated private markets and institutions How are they regulated? Why are they regulated? Should they be regulated? –Examples of regulation include: Bank Act, Bank of Canada Act, Currency Act, etc © Brenda Spotton Visano 2016 9

10. ACTIVITIES CENTRES OF ACTIVITY Exchange of Goods or Services for Current Income or Current Consumption Medium of Exchange  Cash  Chequing Account Balances ACTORS Households Businesses Governments Financial Markets  Capital: Equities; Bond  Money  Mutual Funds  Foreign Exchange  Derivatives Exchange of Current Income for Future Consumption Savings & Investment  Stocks  Bonds  Guaranteed Investment Certificates CANADIAN FINANCIAL SYSTEM Financial Institutions (FIs)  Banks: Retail, Investment  Credit Unions  Trust Companies  Insurance Companies  Pension Funds  Central Bank Risk Hedging, Speculation  Options  Futures  Swaps  Collateralized Debt Obligations QUESTIONS What are the economic functions of financial instruments and institutions? How should they operate? Why and how should they be regulated? Regulation & Oversight  Bank of Canada  Canadian Deposit Insurance Corp  Office of Superintendent of FIs  Fin Consumer Agency of Canada  Provincial Regulators (e.g. FSCO)  Financial Industry Associations 10

11. Emerging Issues Issues facing the financial services industry: -Financial technology innovation: Fintech (including crypto-currencies, e.g., Bitcoin) -Pros and cons of a Monetary Union -Household Debt -Fringe Financing and Consumer Financial Protection © Brenda Spotton Visano 2016 11

12. Learning Objectives for Course Identify and define…, explain the functions of…, critique the explanations for and operation of… Financial instruments Financial markets Financial institutions Financial policies and regulation Explain current financial developments and critique emerging issues © Brenda Spotton Visano 2016 12