TARGET GROUP | Mid- to senior-level officials in central banks, ministries of finance, and financial regulatory agencies who are interested in more advanced finance topics than those offered in the Financial Markets Analysis course. Participants are expected to have an advanced degree in economics or finance, or equivalent work experience. The course requires heavy use of Excel spreadsheets and participants should be proficient in their use. Participants are strongly recommended to have completed the online Financial Market Analysis (FMAx) course or be able to demonstrate knowledge of the material in this course.
DESCRIPTION | This two-week course, presented by the IMF’s Institute for Capacity Development, aims at providing participants with the foundation of financial instruments beyond the standard treatment of bonds and equity covered in the FMAx. After a short review, the course takes on forwards, futures, swaps and options and moves toward combinations of these building block instruments with practical applications. Some time is devoted to relevant policy implications, notably related to the regulation of financial markets, though a course devoted to financial sector policies is recommended for those interested in more detail. Lectures introduce the underlying theory, while workshops and case studies allow the participants to apply the techniques introduced and to test their understanding of how and why some strategies and misuse of financial instruments can lead to large losses and financial instability. Participants will prepare final presentations on a set of predetermined current financial market issues.
Upon completion of this course, participants should be able to:
• Identify and use the building blocks to construct financial instruments
• Explain the underlying economic rationale for various financial instruments and markets
• Use basic pricing models to identify potential mispricing and misuse of financial instruments
• Identify threats to financial stability in markets and instruments, using case studies of previous financial crises
• Extract lessons from previous financial stability threats to try to prevent their recurrence