Finance: Exploration of Bond Market, Financial Institutions and Monetary System

Course 8: Finance: Exploration of Bond Market, Financial Institutions and Monetary System

I. Course Description

Bond markets, financial institutions and monetary systems are the core components of todays global financial system. They are intertwined to shape the international economic pattern together. As a part of the capital market, the bond market plays an important role in financing and investment. As the intermediary of capital, financial institutions directly participate in the operation of the monetary system by providing funds to borrowers and converting deposits into loans. The monetary system is the cornerstone of the whole economy, which not only affects the formulation of monetary policy, but also is closely related to the operation of the bond market and financial institutions. A deep understanding of the interaction between these three elements is crucial to analyzing the operating mechanism of the financial system.

This course aims to analyze the bond market, the interaction between financial institutions and monetary system, discusses how they jointly affect the stability and efficiency of the financial system, reveals the role of the bond market in financial institutions financing, how financial institutions affect the operation of the monetary system, and how to shape the dynamic relationship.

II. Professor Introduction

Martin Cherkes – Professor at Princeton University

Professor Martin Cherkes graduated from the University of Pennsylvania with a doctorate in economics. As a professor of Finance at Princeton University. One of Professor Martin Cherkess main achievements is his theory of closed-end funds based on liquidity. Professor Martin Cherkes has made important contributions to the financial field, especially in the research of closed-end funds. His pioneering work included The Liquidity Theory of Closed-end Funds, published in the Financial Research Review in 2008, which was widely cited and had a profound impact in academia.

In addition, his research covers all aspects of closed-end funds, such as liquidity dynamics, management allocation policies and the nature of misunderstanding about such investment instruments, such as “Management allocation Policies and Shareholders Activities of Closed-end Funds” published in 2014 and “Closed-end Funds: A Misunderstood Asset” published in 2001. As a member of the Wharton Financial Institutions Center, Professor Cherkes actively participates in and promotes the research and development of the financial field. He also served as senior vice president of Barclays Bank of New York and vice president of the Chicago Branch of Continental Bank. In addition, Professor Cherkes has taught at Columbia University, New York University, University of Pennsylvania Business School and other prestigious universities, and has won many Distinguished Professor awards.

III. Syllabus

1. An overview of the bond market and the introduction of the basic concepts
2. The bond pricing mechanism and interest rate system in Chinas financial system
3. Senior bond pricing and zero-interest bonds
4. Duration concept and its importance to financial institutions
5. Pricing and valuation of futures contracts
6. Banking system
7. Comparison of the banking systems in the US and China
8. European currency, LIBOR, SOFR, and interest rate futures
9. Swaps
10. Option use and option pricing