Studying at York
Money, Banking and Corporate Finance - ECO00093M
- Department: Economics and Related Studies
- Credit value: 20 credits
- Credit level: M
- Academic year of delivery: 2024-25
- See module specification for other years: 2023-24
Module will run
| Occurrence | Teaching period |
|---|---|
| A | Semester 2 2024-25 |
Module aims
Money and banking is hugely important to every household and every nation, and corporate finance is crucial to every firm’s financial decision-making. The module aims to provide students with an in-depth understanding of money and (global) banking systems, their roles in the financial markets, corporate finance, and current critical issues
Module learning outcomes
After successful completion of the module students will be able to:
1. Understand the general functioning of the banking systems;
2. Evaluate the impacts of monetary policies and regulations;
3. Master the principles and basic tools of banking management; and
4. Have a birds eye-view of some frontier research concerning money and banking.
5. Be able to explain the different theories in corporate finance;
6. Be able to critically assessing the different theories in corporate finance;
7. Solve basic agency models related to corporate financing decisions;
8. Describe the incentive problems that can occur due to asymmetric information and ways to solve them through contract design.
Module content
Topics cover capital investment, capital financing, short-term liquidity, corporate governance, management of commercial and investment banks, central banking and monetary policies, international banking, banking regulations and supervision. We study asymmetric information models and address fundamental issues, such as bank runs, financial crises, bubbles, credit rationing, and risk-taking behaviours.
Indicative assessment
| Task | % of module mark |
|---|---|
| Closed/in-person Exam (Centrally scheduled) | 100 |
Special assessment rules
None
Indicative reassessment
| Task | % of module mark |
|---|---|
| Closed/in-person Exam (Centrally scheduled) | 100 |
Module feedback
Feedback will be provided in line with University policy
Indicative reading
Brealey, Myers and Allen (BMA), Principles of Corporate Finance, McGraw-Hill, 13th Edition, 2020. (You may also use 12th Edition).
Freixas, X and Rochet, Jean-Charles. Microeconomics of Banking, MIT Press, 2008.
Kindleberger, Charles and Robert Aliber. Manias, Panics, and Crashes, Palgrave Macmillan, 2011.
Mishkin, Frederic S., Economics of Money, Banking and Financial Markets, Pearson, 2010.
Ross, Westerfield, Jaffe, and Jordan (RWJJ), Corporate Finance: Core Principles and Applications, McGraw-Hill, 5th Edition, 2018. (You may also use 4th Edition).
Articles
Franklin Allen and Douglas Gale (2000), Financial Contagion, Journal of Political Economy Vol. 108, No. 1, pp. 1-33.
S. Bhattacharya (1979), “Imperfect Information, Dividend Policy, and “the bird in the hand” Fallacy”, Bell Journal of Economics, 10, pp. 259-270.
H. DeAngelo, L. DeAngelo and D. Skinner (2004), “Are Dividends Disappearing? Dividend Concentration and the Consolidation of Earnings”, Journal of Financial Economics, 72, pp. 425-456.
E. Fama and K. French (2001), “Disappearing Dividends: Changing Firm Characteristics or Lower Propensity to Pay?”, Journal of Financial Economics, 60, pp. 3-43.
M.Z. Frank and V.K.Goyal (2003), “Testing the Pecking-Order Theory of Capital Stucture”, Journal of Financial Economics, 67, pp. 217-248.
R. Green (1984), “Investment Incentives, Debt, and Warrants”, Journal of Financial Economics, 13, pp. 115-136.
S. Grossman and O. Hart (1980), “Takeover Bids, the Free-Rider Problem and the Theory of the Corporation”, Bell Journal of Economics, 11, pp. 42-64.
J. Helwege and N. Liang (1996), “Is There a Pecking Order? Evidence from a Panel of IPO Firms”, Journal of Financial Economics, 40, pp. 429-458.
M. Jensen (1986), “Agency Cost of Free Cash Flow, Corporate Finance and Takeovers”, American Economic Review, 76, pp. 323-329.
M. Jensen and W. Meckling (1976), “Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure”, Journal of Financial Economics, 3, pp. 305-360.
M. Miller (1977), “Debt and Taxes”, Journal of Finance, 32, pp. 261-275.
M. Miller (1988), “The Modigliani-Miller Propositions After Thirty Years”, Journal of Economic Perspectives, 2, pp. 99-120.
M. Miller and K. Rock (1985), “Dividend Policy under Asymmetric Information”, Journal of Finance, 40, pp. 1031-1051.
S. Myers (1977), “The Determinants of Corporate Borrowing”, Journal of Financial Economics, 5, pp. 147-175.
S. Myers and N. Majluf (1984), “Corporate Financing and Investment Decisions when Firms Have Information that Investors Do Not Have”, Journal of Financial Economics, 13, pp. 187-221.
J. Stein (1992), “Convertible Bonds as Backdoor Equity Financing”, Journal of Financial Economics, 32, pp. 3-21.
Bebchuk Lucian and Itay Goldsterin (2011). ``Self-Fulfilling Credit Market Freezes,” Review of Financial Studies 24(11), 3519-3555.
Diamond, Douglas W. and Philip H. Dybvig (1983). "Bank Runs, Deposit Insurance, and Liquidity," Journal of Political Economy 91(3), 401-419.
Gertler, Mark and Kiyotaki, Nobuhiro (2012). ``Banking, liquidity and bank runs in an infinite horizon economy.”
Goldstein, Itay and Ady Pauzner (2005). "Demand-Deposit Contracts and the Probability of Bank Runs," The Journal of Finance 60(3), 1293-1327.
Goldstein, Itay, Emre Ozdenoren and Kathy Yuan (2011). "Learning and Complementarities in Speculative Attacks," The Review of Economic Studies 78(1), 263-292.
Kiyotaki, N and Moore John (1997). ``Credit Cycles,” Journal of Political Economy 105, 211-248.
Kiyotaki, Nobuhiro and Randall Wright (1989). ``On money as a medium of exchange,” Journal of Political Economy 97(4), 927-954.
Morris Stephen and Shin Hyun Song (1998).``Unique Equilibrium in a Model of Self-Fulfilling Attacks ,” American Economic Review 88, 587-597.
Morris Stephen and Shin Hyun Song (2004). ``Coordination Risk and the Price of Debt, European Economic Review 48, 133-153.
Reinhart Carmen and Kenneth Rogoff. This Time Is Different: Eight Centuries of Financial Folly, PUP, 2009.
Stiglitz Joseph and A. Weiss (1981). ``Credit rationing in markets with imperfect information,” American Economic Review 71, 393-410.