The Hong Kong Polytechnic University

School of Professional Education and Executive Development

Bachelor of Arts (Hons) Scheme in Business (FT)

SPD4421 Money and Banking

Semester 2 (2016-17)
Teaching Plan

Lecturer: Sandy Chau e-mail: sandychau316@gmail.com

Office: NA Tel:
Consultation Hours: By appointment
Prior knowledge: Fundamental Knowledge in business finance
(if any) (Note: This is not a pre-requisite subject requirement and is only for
students reference of the scope of basic knowledge required for this
subject.)

1. ROLE AND PURPOSE

This subject builds on students understanding of business finance concepts and techniques, and
allows students to acquire deeper understanding of monetary and financial institutions. This
subject analyses the role and function of the banking system. In addition, the practice of
monetary policy is examined. On this basis, this subject further provides details of monetary
market, such as the central banking system, inter-bank lending. The significance of U.S.
financial system in global financial system will be discussed along the introduction of the
monetary systems of Hong Kong and China.

2. LEARNING OUTCOMES

On successfully completing this subject, students will be able to:

a. Understand monetary systems and operations of financial institutions.
b. Discuss how monetary policy influences interest rates and asset markets, such as
the bond market and the stock market.
c. Analyze financial intermediation and the role of banks in the economic system and
study the economic rationale behind banking
regulation.
d. Review evidence and theory on how monetary policy affects real economic activity, and
then study the instruments and goals of monetary policy, focusing in particular on
credibility and expectations management for central banks.

3. TEACHING AND LEARNING APPROACH

Lecture will focus on introducing concepts and techniques to students. Students

understanding will be reinforced by tutorial activities, concentrating on application of such in
solving problems at basic and intermediate levels. Group work will be assigned so that
students can help each other in learning by sharing individuals views and strengths amongst
the group.

Student Study Effort Required

Lecture 28 hours
Tutorial 14 hours
Self-study 84 hours
1
 Total student study effort 126 hours

4. TEXTBOOK AND RECOMMENDED BOOKS

4.1 Recommended Textbook

Stephen Cecchetti , Kermit Schoenholtz , Money, Banking and Financial Markets. McGraw-
Hill. Latest Edition.

4.2 References
Mishkin, F.S. and S.G. Eakins, Financial Markets and Institutions, 6th Edition, Pearson
Prentice Hall, 2009.

Ho, S.M., R.H. Scott and K. A. Wong, The Hong Kong Financial System: A New Age, Oxford
University Press, 2004.

McGuinness, P.B., A Guide to the Equity Markets of Hong Kong, Oxford University Press,
1999.

Beecham, B.J., Monetary and Financial system in Hong Kong, 3rd Edition, Hong Kong
Institute of Bankers, 2002.

Ross, S.A., R.W. Westerfield and J.F. Jaffe, Corporate Finance, 7th Edition, McGraw-
Hill/Irwin, 2005.

Hong Kong Exchange and Clearing Limited (www.hkex.com.hk)

Securities and Futures Commission: (http://www.hksfc.org.hk)

Hong Kong Monetary Authority: (http://www.hkma.org.hk)

Federal Reserve (www.federalreserve.gov )

5. WEEKLY TEACHING PLAN

Meeting Topic Reading/reference
1 Money and the Payment System Ch 2, Supplementary
notes on Shadow Banking;
Leverage Trading by
Institutional Investors
2 Global Liquidity and hot money Ch 3, Supplementary
notes on Carry Trade;
Deleveraging
3, 4 Banks and Bank Management Ch 12, Supplementary
notes on Asset-back
Securities; Loan to
Deposit Ratio
5,6 Central Banks in the World Today Ch 15, Supplementary
notes on Monetary
Economics; Monetary
Policies
7 The Structure of Central Banks Ch 16; Supplementary
notes on Gold Reserves in
Central Banks

2
 Meeting Topic Reading/reference
8 Central Bank Balance Sheet and Ch 17; Supplementary
Money Supply Process notes on Banking
Liquidity in China
9, 10 Exchange-Rate Policy and the Ch19, Supplementary
Central Bank notes on Rise of RMB as
Reserve Currency;
Foreign exchange
intervention by Central
Bank of China
11 Test (Date to be confirmed)
12 Presentation
13 Revision

6. PLAGIARISM

You are strongly advised to pay attention to the rules and guidance notes regarding
plagiarism and how sources should be referred to and bibliography referencing stipulated
in the Student Handbook.

The School may take disciplinary actions against students when there is evidence of
collusion between individuals. The work of others, which is included in the assignment
must be attributed to its source (a full bibliography and a list of reference must be
submitted). Failure to observe such requirements will definitely lead to serious
consequence for your study on this subject and registration at School.

7. ATTENDANCE REQUIREMENTS

It is important that students attend classes and study related activities regularly and
punctually. Participation forms a critical part in the learning process, contributing to the
desired learning outcomes. Absence will affect study progress and students should not be
absent without good reason.

Some programmes consist of Continuing Education Fund (CEF) reimbursable subjects.

For claiming CEF, students are required to fulfil the attendance requirement as stipulated
by the Office of CEF.