Iğdır University Lifelong Learning Programme

Description of Individual Course Units

Course Unit Code	Course Unit Title	Type of Course Unit	Year of Study	Semester	Number of ECTS Credits
150400306103	FINANCIAL INSTITUTIONS AND INSTRUMENTS	Elective	3	6	4

Level of Course Unit

First Cycle

Objectives of the Course

In this course, local and international financial institutions and markets are examined with their economic and theoretical dimensions. The functions of financial institutions, modern banking, insurance and investment institutions and the services provided by these institutions and new products and tools especially used will be covered. The fact that companies and individuals provide financing through banking and money market activities is no longer sufficient in today's financial world and companies want to be opened to capital markets and traded on different exchanges. For this reason, the acquisitions of securities and futures exchanges within the system are also included in the course content. The liberalization of the markets and the complexity of financial instruments both reduce and increase the risks that the financial system is exposed to. Market risk, interest rate risk, liquidity risk etc. The effects of the systematic risks on financial institutions and the basic econometric models established for the measurement of these risks will also be presented in the course and will be discussed with the students as to what the financial institutions should do in the face of the fluctuations in the markets.

Name of Lecturer(s)

Dr. Öğr. Üy. Duygu ARSLANTÜRK ÇÖLLÜ

Learning Outcomes

1	completion of this course, students will learn financial institutions and tools and applications in Turkey will have the ability to understand in detail.
2	will be able to perceive the market dynamics and interpret them scientifically.

Mode of Delivery

Daytime Class

Prerequisites and co-requisities

Recommended Optional Programme Components

Course Contents

Weekly Plan: Week-1 Introduction Classification of financial assets and markets, the role of financial markets, market participants, global trends Week-2 Financial Institutions, Financial Intermediaries and Assets Introduction to financial institutions, financial intermediation processes, asset / debt management, current legal regulations Week -3 Deposit Institutions Commercial banking, investment institutions and credit unions. The structure, size, performance, new regulations etc. of the institutions accepting deposits. examination of factors, Turkish Banking System Week -4 Central Banks and Monetary Policy The aim of central banks, monetary policy tools used and discussion of monetary authority Investigation of Fed, CBRT and other central banks Week -5 Insurance Companies Insurance system, types and products of insurance companies, premium calculations, SGK Week -6 Investment Companies Investment and development banking, mutual funds, hedge funds and individual pension funds management Week -7 Primary Markets IPO process Week -8 Secondary Markets Property, structure and stock market activity problem of stock and commodity exchanges Investigation of ISE and other major stock exchanges Week -9 Derivatives Market Futures and options exchanges, futures, forward, options, swaps etc. introduction of tools and process of mathematical evaluation Week -10 Asset Pricing Models and Determination of Interest Rates Properties of financial assets and pricing mechanisms, maturity structure, risk-return models Week -11 Risks faced by financial institutions: Interest rate risk, credit risk, market risk, off-balance sheet items risk, exchange rate risk, country and state risk, technology and operational risk, liquidity risk, bankruptcy risk, hedging approach. Week -12 Interest Rate Risk Re-pricing model, duration, bank stress tests etc. Week -13 Credit Risk Models Types of credit, modeling of credit risk, RAROC approach, Basel 1-2-3 and IBS standards Week -14 Market Risk Assessment RiskMetrics, VaR, Modeling of market risk by simulation.

Weekly Detailed Course Contents

Week	Theoretical	Practice	Laboratory
1	Weekly Plan: Week-1 Introduction Classification of financial assets and markets, the role of financial markets, market participants, global trends Week-2 Financial Institutions, Financial Intermediaries and Assets Introduction to financial institutions, financial intermediation processes, asset / debt management, current legal regulations Week -3 Deposit Institutions Commercial banking, investment institutions and credit unions. The structure, size, performance, new regulations etc. of the institutions accepting deposits. examination of factors, Turkish Banking System Week -4 Central Banks and Monetary Policy The aim of central banks, monetary policy tools used and discussion of monetary authority Investigation of Fed, CBRT and other central banks Week -5 Insurance Companies Insurance system, types and products of insurance companies, premium calculations, SGK Week -6 Investment Companies Investment and development banking, mutual funds, hedge funds and individual pension funds management Week -7 Primary Markets IPO process Week -8 Secondary Markets Property, structure and stock market activity problem of stock and commodity exchanges Investigation of ISE and other major stock exchanges Week -9 Derivatives Market Futures and options exchanges, futures, forward, options, swaps etc. introduction of tools and process of mathematical evaluation Week -10 Asset Pricing Models and Determination of Interest Rates Properties of financial assets and pricing mechanisms, maturity structure, risk-return models Week -11 Risks faced by financial institutions: Interest rate risk, credit risk, market risk, off-balance sheet items risk, exchange rate risk, country and state risk, technology and operational risk, liquidity risk, bankruptcy risk, hedging approach Week -12 Interest Rate Risk Re-pricing model, duration, bank stress tests etc. Week -13 Credit Risk Models Types of credit, modeling of credit risk, RAROC approach, Basel 1-2-3 and IBS standards Week -14 Market Risk Assessment RiskMetrics, VaR, Modeling of market risk by simulation.