Money Banking and finance
Course Code: 223
Credit Hours: 03
Week 01 Introduction and Development of Monetary Mechanism. Evolution of Money
and Payment System, Definition of Money, Function of Money &
Measurement of Money, Demand for Money & Supply of Money, Definitions
of Money, M1, M2, M3, etc.
Week 02-03 Role of Money in the Economy. Debate on neutrality and non-neutrality of
Money. Classical Dichotomy and Keynesian Integration of Nominal and Real
Sectors. Role of Money in the IS-LM Framework. Money in Aggregate Demand
& Aggregate Supply Analysis. Keynesian vs. Monetarist views of Equilibrium
Output, Employment and Prices.
Week 04-05 Demand for Money. Quantity Theory of Money. Transaction Theories of
Demand for Money. Theories of Demand for Money: Baumol–Tobin Model of
Cash Management. Friedman’s Restatement of Quantity Theory of Money.
Week 05-07 Theory of the Role and Functioning of Financial System. Information
asymmetry and the need for the role of financial sector. Basic concepts like
adverse selection, moral hazard, free rider and principal-agent.
problems in financial sector to understand puzzles of financial markets.
Financial system and its relationship with the rest of the economy. Functions
of financial sector: mobilization and allocation of resources; pooling,
diversification and trading of risk; advisory role; financing technological
innovation and development. Financial Repression vs Financial Liberalization.
Week 08 Mid-term Examination
Week Financial Institutions and Current issues. Scheduled Banks and their role in
09,10,11,12 economic development of Pakistan: Introduction to commercial banking;
structure of commercial bank in Pakistan; Assts and Liabilities of a commercial
bank; performance indictors for commercial banks; recent issues in,
commercial banking.
Non-bank Financial Institutions: Development Financial Institutions,
Investment Banks, Modarbas, Leasing companies, Mutual Funds, Housing
Finance Corporations, Discount Houses, Venture Capital Companies. Micro
Finance Institutions, SME Banks. Insurance Companies the rationale and role.
Week 13,14 Financial Markets and Current Issues. Functioning of Money Market (Primary
and Secondary Dealers Capital Market (Stock exchanges and Various,
Components of capital markets - Securities, equities, bonds, debentures),
Foreign Exchange Market and its evolution, dollarization of the economy.
Week 15 Presentations
Weel 16 Final Term Examination