Financial market regulation and monetary policy
Lecture, 5.00 ECTS
The course gives students an understanding of regulatory measures in the financial system and presents an overview of current developments in the EU. The course is designed to convey the central building blocks of monetary theory and monetary policy with a focus on the European Economic Area. Theoretical concepts are illustrated by past or current examples.
The core contents include:
 Objectives of financial market regulation; regulation theory;
 International regulatory systems: comparison, national and supranational rules and general financial market regulation in the EU;
 Banking regulation practice in the EU (currently Basel II/III), insurance regulation in the EU (currently
Solvency II) and financial markets in the EU;
 Market supervision: objectives, tasks, fields of activity, institutions (including the FMA), sanctions;
 European supervisory architecture: Joint Committee, EIOPA, EBA, ESMA.
 Money: system and functioning, multipliers, supply and demand;
 Inflation; the "optimal" inflation rate;
 Instruments and theoretical effects of monetary policy;
 Functioning of central banks; balance sheets of central banks (ECB/FED);
 Monetary policy in the context of economic policies; Taylor rule;
 Empirical effectiveness of monetary policy.
Graduates understand the legal and regulatory framework for companies in the financial sector and recognize the importance of subordinating their business activities to these requirements, with particular attention to the following content: (a) knowledge of international regulatory systems, (b) knowledge of the European supervisory architecture, (c) understanding of the regulatory apparatus relevant in Austria and (d) the influence of compliance and money laundering regulations on the business activities of companies. Graduates will be able to (e) ensure the sustainable management of legal risks through comprehensive knowledge of the processes within the European legal framework.
In addition, graduates understand the selection and intended effects of the instruments available in monetary policy. In particular, the following contents are taught: (f) economic relevance of financial intermediaries, (g) international financial markets relevant to the banking and insurance sector, and (h) the monetary system, the role of central banks and the intended effects of monetary policy instruments.
Recommended or required reading and other learning resources / tools
References: Blanchard/Illing (2009): Makroökonomie, Pearson. Bofinger et al (1997): Geldpolitik, Vahlen. Gantenbein/Spremann (2013): Finanzmärkte, UTB. Gischer et al (2012): Geld, Kredit und Banken, Springer. Holtemöller (2008): Geldtheorie und Geldpolitik, Mohr/Siebeck. Madura (2011): Financial Markets and Institutions, South Western. Mishkin (2007): The Economics of Money, Banking, and Financial Markets, Pearson/Addison Wesley. Mishkin/Eakins (2012): Financial Markets and Institutions, Prentice Hall.
Academic journals: BIS Reports; Publications of the ECB, the IMF and other central banks; Credit & Capital Markets.
Mode of delivery
Lecture: final exam
Prerequisites and co-requisites
Assessment methods and criteria
Lecture: final exam