Global Financial Institutions

1.5 Credits · Level: Undergraduate

This course examines the banking and nonbank financial institutions that make the modern financial system work—and, at times, fail. At its core, the financial system channels funds from households and firms with surplus funds to those seeking capital, thereby supporting the allocation of resources throughout the economy. We will study a broad and evolving range of institutions, including central banks, commercial banks, investment banks, private equity funds, private credit funds, and business development companies. Course content will adapt to financial innovation, regulatory developments, and changes in the structure of financial markets. These institutions are not distant abstractions. Most students in this course are finance majors preparing for careers on Wall Street and across the broader financial sector. The organizations with which they interview—and often ultimately join—are the same institutions whose objectives, business models, balance sheets, funding structures, incentives, and constraints we analyze. The course therefore develops both the institutional fluency valuable in interviews and professional settings and the analytical perspective needed to understand how financial institutions allocate capital and respond to markets, regulation, and government policy. We do not, however, study financial institutions simply for the sake of cataloging them. The course is organized around a larger question—its second title: **Where Is the Next Financial Crisis Hiding? By the end of the course, students are expected to: explain how major banking and nonbank financial institutions make money and obtain funding; analyze their balance sheets, incentives, regulatory constraints, and principal risks; evaluate how monetary policy and financial regulation affect institutional behavior; trace how distress can spread across institutions and markets; and use financial evidence to assess emerging vulnerabilities and develop a defensible crisis forecast.