Money, Banking and Finance

| UOS Y3 | (APC312) Money, Banking and Finance

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UNIVERSITY OF SUNDERLAND

AND

MANAGEMENT DEVELOPMENT INSTITUTE OF SINGAPORE

IN TASHKENT

Module Code and Title : APC312 Money, Banking and Finance

MDIS Module Leader : Mr.Lim Khai Seng

Assessment : Individual Assignment

Submission Due Date :16 January 2023

Word Length : 3000 words (+/- 10%)

Weighting within Module : 100%

_____________________________________________________________________

Assignment Submission

Students are required to submit their coursework through JIRA. Only assessments

submitted through JIRA will be marked. Any other submission including submission

to your study

Centre in hard copy will be treated as a non-submission.

If your centre supports Turnitin©, a copy of your Turnitin© originality report must be

submitted in conjunction with your assignment.

PLAGIARISM/INFRINGEMENT STATEMENT

All Assessments are subject to the University’s Policy on 'Cheating, Collusion and

Plagiarism'. Students found guilty of this are subject to severe penalties.

This is an INDIVIDUAL piece of work - If there is evidence that the work is not

wholly attributable to you, the University's policy on 'Cheating, Collusion and

Plagiarism' will be applied

Link to University Academic Integrity and Misconduct Policy

 https://docushare.sunderland.ac.uk/docushare/dsweb/View/Collection-8155

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Requirements:

This assignment is in three (3) parts with each part carrying a maximum mark of Part

A 35 marks Part B 35marks Part C 30 marks.

Guidance:

Students should approach this assignment as an academic essay, weighing the

arguments for and against each issue, making comment on the literature and drawing

logical conclusions. Harvard referencing is a key requirement of the assignment to

demonstrate wider reading and to underpin the discussions, ensuring they have

sufficient depth.

PART A

Question 1

The Federal Reserve has made the following decisions to implement the monetary

policy stance announced by the Federal Open Market Committee in its statement on

May 4, 2022:

” The Board of Governors of the Federal Reserve System voted unanimously to raise

the interest rate paid on reserve balances to 0.9 percent, effective May 5, 2022.”

Critically discuss the main reasons why the Federal Reserve is taking this decision to

increase the interest rate.

17 marks

Question 2

Critically discuss how The Russia-Ukraine conflict has triggered turmoil in the

financial markets, and drastically increased uncertainty about the recovery of the

global economy.

18 marks

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PART B

Question 1.

Critically discuss what Block Chain is and evaluate the impact of blockchain

technology on financial transactions and services.

17 marks

Question 2

Critically discuss the role of financial intermediaries in an economy.

18 marks

PART C

Question 1

There is a widespread belief amongst economists that one of the principal

determinants of an economy’s rate of growth is the rate at which the capital stock

expands and is replaced.

Critically discuss and evaluate this statement.

15 marks

Question 2

Critically discuss and analyse. Keynesian theory of inflation.

15 marks

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Part A references

References

A global database on central banks' monetary responses to Covid-19

Adrian (T.) and Shin (H.S.) (2007): "Liquidity and Leverage". Journal of

Financial

Intermediation. Forthcoming. Available on the New York Fed website as Staff

Report no 328.

Adrian (T.) and Shin (H.S.) (2009): "Money, Liquidity and Monetary Policy"

Forthcoming in

American Economic Review, papers and proceedings. Available on the New

York Fed

website as Staff Report no 360.

Committee on the Global Financial System. CGFS Papers No 34. "The role of

valuation and

leverage in procyclicality". April 2009 (available on the Bank for International

Settlements –

BIS-website).

Danielsson (Jon) and Shin(Hyun Song): "Endogenous Risk ";London School of

Economics

September, 2002.

For an analysis, see Kashyap and al. (2008).

BIS Review 94/2009 5

Kashyap (AK), Rajan (R.G) and Stein (J.C.) (2008) "Rethinking Capital

Regulation". Paper

presented at the Federal Reserve Bank of Kansas City Symposium.

The Spectre of Price Inflation: Evidence, Theory and Policy Paperback – 20

October 2022

by Max (University of Missouri - St Louis) Gillman (Author)

Inflation Hacking: Inflating Investing Techniques to Benefit from High Inflation

Hardcover – 14 February 2021 by Kendrick Fernandez (Author)

federal Reserve's Commercial Paper Funding Facility Tobias Adrian

DIANE Publishing, 2010

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Part B references

Blockchain: The Complete And Comprehensive Guide To Understanding

Blockchain Technologies Paperback – 9 February 2018

The Financial System and the Economy: Principles of Money and Banking

Paperback – Illustrated, 15 July 2009

by Maureen Burton (Author), Bruce Brown (Author)

The Financial System, Financial Regulation and Central Bank Policy Hardcover

– 6 October 2017

by Reno) Cargill, Thomas F. (University of Nevada (Author

Blockchain: Everything You Need to Know About Blockchain

Corey Bowen

Jun 2020 · Online Creative Services · Narrated by A W Dickson

Part C references

Aizenman, J. and R. Glick (2008), “Sterilization, Monetary Policy, and Global

Financial

Integration,” NBER Working Paper 13902.

Alvarez, F., A. Atkeson and C. Edmond (2003), “On the Sluggish Response of

Prices to

Money in an Inventory-Theoretic Model of Money Demand,” NBER Working

Paper 10016.

Alvarez, F., A. Atkeson and P.Kehoe (2002), “Money, Interest Rates and

Exchange Rates

with Endogenously Segmented Markets,” Journal of Political Economy 110(1),

73-112.

Alvarez, F., R. Lucas and W. Weber (2001), “Interest Rates and Inflation,”

American

Economic Review Papers and Proceedings 91(2), 219-225.

Andrés, J., J, López-Salidoa and J. Vallésa (2002), “Intertemporal Substitution

and The

Liquidity Effect in a Sticky Price Model,” European Economic Review 46, 1399-

1421.

Bank for International Settlements (2008), “Monetary Policy Frameworks and

Central Bank

Market Operations,” Markets Committee Compendium, June 2008.

Barnett, W., D. Fisher, and A. Serletis (1992), “Consumer Theory and the

Demand forMoney,” Journal of Economic Literature 30, 2086-2119.

Bartolini, L. and A. Prati (2004), “Cross-country Differences in Monetary Policy

Execution andMoney Market Rates’ Volatility,” European Economic Review 50,

349-376.

Bernanke, B. (2007), “The Financial Accelerator and the Credit Channel,”

speech give at The

Credit Channel of Monetary Policy in the Twenty-first Century Conference,

Federal Reserve

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Bank of Atlanta.

Bernanke, B. and A. Blinder (1988), “Credit, Money, and Aggregate Demand,”

American

Economic Review 78 (May), 435–439.

Bernanke, B. and M. Gertler (1995), “Inside the Black Box: The Credit Channel

of Monetary

Policy Transmission,” Journal of Economic Perspectives 9 (Fall), 27–48.

Monetary policy implementation: Misconceptions and their consequences 19

Bernanke, B. and I. Mihov (1998), “The Liquidity Effect and Long-run

Neutrality,” CarnegieRochester Conference Series on Public Policy, 49, 149–94.

Bindseil, U. (2004), Monetary Policy Implementation, Oxford University Press,

New York.

Fuerst, T. (1992), “Liquidity, Loanable Funds and Real Activity,” Journal of

Monetary

Economics 29, 3–24.

Kimball, M. (1995), “The Quantitative Analytics of the Basic Neomonetarist

Model,” Journal of

Money, Credit, and Banking 27, 1241–1277.

King, R. and M. Watson (1996), “Money, Prices, Interest Rates, and the Business

Cycle,”

Review of Economics and Statistics 78, 35–53.

Kishan, R. and T. Opiela (2000), “Bank Size, Bank Capital, and the Bank

Lending Channel,”

Journal of Money Credit, and Banking 32 (1), 121-141.

Krause, M. and T. Lubik (2007), “The (Ir)relevance of Real Wage Rigidity in the

New

Keynesian Model With Search Frictions,” Journal of Monetary Economics 54,

706—727.

Krugman, P. (2008), “Betting the Bank,” International Herald Tribune 15

March 2008.

Laidler, D. (1999), “Passive money, active money and monetary policy”, Bank of

Canada

Quarterly Review (Summer), 15-25.

Part C references

Basile, Peter, John Landon-Lane and Hugh Rockoff (2011): “Money and interest

rates in the

United States during the Great Depression”, in Geoffrey Wood, Terence C Mills

and Nicholas

Crafts (Eds), Monetary and Banking History: Essays in honour of Forrest Capie,

London:

Routledge.

Cannan, Edwin (1924): “Limitation of currency or limitation of credit?”,

Economic Journal, 34,

52–64.

Chick, Victoria (1983): Macroeconomics after Keynes, The MIT Press

Cambridge,

Massachusetts.

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Chick, Victoria (2001): “Varieties of post-Keynesian monetary theory: conflicts

and (some)

resolutions”, paper for the Association for Heterodox Economics Conference,

July 2001.

Ciocca, Pierluigi and Giangiacomo Nardozzi (1996): The high price of money: an

interpretation of world interest rates, Oxford University Press.

Cmd 3897 (1931): Macmillan Committee Report on Industry and Finance,

London: His

Majesty’s Stationery Office.

BIS Papers No 65 81

Dalton, Hugh (1954): Principles of public finance, London: Routledge & Kegan

Paul Ltd.

Dow, S C (1997): “Endogenous money”, in G C Harcourt and P ARiach (Eds), A

‘Second

Edition’ of The General Theory, Vol 2, London: Routledge.

Fisher, Irving (1933): “The debt deflation theory of great depressions”,

Econometrica, 1 (4),

October, 337–57.

Friedman, Milton and Anna J Schwartz (1982): Monetary trends in the United

States and

United Kingdom: their relation to income, prices, and interest rates, 1867–1975,

Chicago and

London: University of Chicago Press.

Homer, Sidney (1963): A history of interest rates, first edition, New Brunswick,

New Jersey:

Rutgers University Press.

Howson, Susan (1993): British monetary policy 1945–51, Oxford: Clarendon

Press.

Howson, Susan (1988): “Cheap money and debt-management in Britain 1932–

51”, in

P L Cottrell and D E Moggridge (Eds), Money and power: Essays in honour of L

S Pressnell,

London: Macmillan.

Howson, Susan and Donald Winch (1977): The Economic Advisory Council

1930–1939,

Cambridge University Press.

Kahn, Richard (1984): The making of the General Theory, Cambridge

University Press.

Keynes, J M (1971–89): The collected writings of John Maynard Keynes, 30

Volumes,

General editors Donald E Moggridge and Elizabeth S Johnson, London:

Macmillan and New

York: Cambridge University Press for the Royal Economic Society. Cited in the

text as

CW [Vol no].

Moggridge, D E (1992): John Maynard Keynes: an economist’s biography,

London and New

York: Routledge.

Sayers, R S (1967): Modern banking, seventh edition, Oxford University Press.

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Sayers, R S (1956): Financial policy: 1939-1945, London: Her Majesty’s

Stationery Office

and Longmans, Green and Co.

Skidelsky, Robert (1992): John Maynard Keynes, Vol II, The economist as

saviour

1920–1937, London and Basingstoke: Macmillan.

Smithin, J N (1996): Macroeconomic policy and the future of capitalism,

Cheltenham: Edward

Elgar.

Somerville, H (1931): “Interest and usury in a new light”, Economic Journal, Vol

41, No 164,

December, 646–9.

Tily, Geoff (2010 [2007]): Keynes betrayed: the General Theory, the rate of

interest and

‘Keynesian’ Economics, Basingstoke: Palgrave Macmillan.

Tily, Geoff (2009): “John Maynard Keynes and the development of national

accounts in

Britain, 1895 to 1941”, Review of income and wealth, 55, 2, June, 331–59.

Turner, Philip (2011a): Is the long-term interest rate a policy victim, a policy

variable or a policy

lodestar?, BIS Working Papers no 367. December.

http://www.bis.org/publ/work367.htm.

Turner, Philip (2011b): Fiscal dominance and the long-term interest rate.

Financial Markets

Group, London School of Economics. Special Paper No 199. March.

www2.lse.ac.uk/fmg/workingPapers/specialPapers/PDF/SP199.pdf

Warming, Jens (1932): ‘International difficulties arising out of the financing of

public works

during depressions’, Economic Journal, 42 (166), Jun, 211-24.

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Generic Assessment Criteria – Undergraduate Bachelor’s degree These should be interpreted according to the level at which you are working

Categories

Grade Relevance Knowledge Analysis Argument and Structure Critical Evaluation Presentation Reference to Literature

P a

s s

86 – 100%

The work examined is exemplary and provides clear evidence of a complete grasp of the knowledge, understanding and skills appropriate to the Level of the qualification. There is also unequivocal evidence showing that all the learning outcomes and responsibilities appropriate to that Level are fully satisfied. At this level it is expected that the work will be exemplary in all the categories cited above. It will demonstrate a particularly compelling evaluation, originality, and elegance of argument, interpretation or discourse.

76-85% The work examined is excellent and demonstrates comprehensive knowledge, understanding and skills appropriate to the Level of the qualification. There is also excellent evidence showing that all the learning outcomes and responsibilities appropriate to that level are fully satisfied. At this level it is expected that the work will be excellent in the majority of the categories cited above or by demonstrating particularly compelling evaluation and elegance of argument, interpretation or discourse and there may be some evidence of originality

70 – 75%

The work examined is of a high standard and there is evidence of comprehensive knowledge, understanding and skills appropriate to the Level of the qualification. There is also clearly articulated t evidence demonstrating that all the learning outcomes and responsibilities appropriate to that level are satisfied At this level it is expected that the standard of the work will be high in the majority of the categories cited above or by demonstrating particularly compelling evaluation and elegance of argument, interpretation or discourse.

60 – 69%

Directly relevant to the requirements of the assessment

A substantial knowledge of relevant material, showing a clear grasp of themes, questions and issues therein

Good analysis, clear and orderly

Generally coherent and logically structured, using an appropriate mode of argument and/or theoretical mode(s)

May contain some distinctive or independent thinking; may begin to formulate an independent position in relation to theory and/or practice.

Well written, with standard spelling and grammar, in a readable style with acceptable format

Critical appraisal of up-to- date and/or appropriate literature. Recognition of different perspectives. Very good use of source material. Uses a range of sources

50 – 59%

Some attempt to address the requirements of the assessment: may drift away from this in less focused passages

Adequate knowledge of a fair range of relevant material, with intermittent evidence of an appreciation of its significance

Some analytical treatment, but may be prone to description, or to narrative, which lacks clear analytical purpose

Some attempt to construct a coherent argument, but may suffer loss of focus and consistency, with issues at stake stated only vaguely, or theoretical mode(s) couched in simplistic terms

Sound work which expresses a coherent position only in broad terms and in uncritical conformity to one or more standard views of the topic

Competently written, with only minor lapses from standard grammar, with acceptable format

Uses a variety of literature which includes some recent texts and/or appropriate literature, though not necessarily including a substantive amount beyond library texts. Competent use of source material.

40 – 49%

Some correlation with the requirements of the assessment but there are instances of

Basic understanding of the subject but addressing a limited range of material

Largely descriptive or narrative, with little evidence of analysis

A basic argument is evident, but mainly supported by assertion and there may be a lack of clarity and coherence

Some evidence of a view starting to be formed but mainly derivative.

A simple basic style but with significant deficiencies in expression or format that may pose obstacles for

Some up-to-date and/or appropriate literature used. Goes beyond the material tutor has provided. Limited use of sources to support a point.

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irrelevance the reader

F a

il

35 – 39%

Relevance to the requirements of the assessment may be very intermittent, and may be reduced to its vaguest and least challenging terms

A limited understanding of a narrow range of material

Heavy dependence on description, and/or on paraphrase, is common

Little evidence of coherent argument: lacks development and may be repetitive or thin

Almost wholly derivative: the writer’s contribution rarely goes beyond simplifying paraphrase

Numerous deficiencies in expression and presentation; the writer may achieve clarity (if at all) only by using a simplistic or repetitious style

Barely adequate use of literature. Over reliance on material provided by the tutor.

The evidence provided shows that the majority of the learning outcomes and responsibilities appropriate to that Level are satisfied – for compensation consideration.

30 – 34%

The work examined provides insufficient evidence of the knowledge, understanding and skills appropriate to the Level of the qualification. The evidence provided shows that some of the learning outcomes and responsibilities appropriate to that Level are satisfied. The work will be weak in some of the indicators.

15-29% The work examined is unacceptable and provides little evidence of the knowledge, understanding and skills appropriate to the Level of the qualification. The evidence shows that few of the learning outcomes and responsibilities appropriate to that Level are satisfied. The work will be weak in several of the indicators.

0-14% The work examined is unacceptable and provides almost no evidence of the knowledge, understanding and skills appropriate to the Level of the qualification. The evidence fails to show that any of the learning outcomes and responsibilities appropriate to that Level are satisfied. The work will be weak in the majority or all of the indicators.