Money and Banking

Subject ECON30005 (2015)

Note: This is an archived Handbook entry from 2015.

Credit Points: 12.5
Level: 3 (Undergraduate)
Dates & Locations:

This subject has the following teaching availabilities in 2015:

Semester 2, Parkville - Taught on campus.
Pre-teaching Period Start not applicable
Teaching Period 27-Jul-2015 to 25-Oct-2015
Assessment Period End 20-Nov-2015
Last date to Self-Enrol 07-Aug-2015
Census Date 31-Aug-2015
Last date to Withdraw without fail 25-Sep-2015

Timetable can be viewed here. For information about these dates, click here.
Time Commitment: Contact Hours: Two 1-hour lectures and a 1-hour tutorial per week
Total Time Commitment: Not available

Both of the following:

Study Period Commencement:
Credit Points:
Summer Term, Semester 1
Corequisites: None
Recommended Background Knowledge:

Please refer to Prerequisites and Corequisites.

Non Allowed Subjects: None
Core Participation Requirements:

For the purposes of considering request for Reasonable Adjustments under the Disability Standards for Education (Cwth 2005), and Student Support and Engagement Policy, academic requirements for this subject are articulated in the Subject Overview, Learning Outcomes, Assessment and Generic Skills sections of this entry.

It is University policy to take all reasonable steps to minimise the impact of disability upon academic study, and reasonable adjustments will be made to enhance a student's participation in the University's programs. Students who feel their disability may impact on meeting the requirements of this subject are encouraged to discuss this matter with a Faculty Student Adviser and Student Equity and Disability Support:


Dr Mei Dong


Subject Overview:

This course provides an overview of the economic principles that underlie the operation of banks and other financial institutions. The impact of monetary policy in Australia will also be examined with particular emphasis on the roles played by the Reserve Bank and other banking and financial institutions. Topics may include how economic theory applies to financial markets; the process of financial intermediation; available financial statistics; the money supply process and the implementation of monetary policy; money in the macroeconomy; the recent behaviour of major financial aggregates; the 1997/98 Asian economic crisis; financial regulation and deregulation; the monetary transmission mechanism; and a discussion of the recent approach to monetary policy in Australia. The course emphasises institutional and public policy issues, providing an Australian perspective on this topical subject.

Learning Outcomes:
  • Explain how financial institutions improve welfare outcomes by facilitating borrowing and lending outcomes that would not otherwise occur
  • Synthesise how financial institutions transform the risk and liquidity structure of financial assets and remove informational asymmetries and identify the subsequent impact on borrowing and lending opportunities
  • Describe the role of the financial intermediary and the function of financial institutions in facilitating financial intermediation
  • Analyse the implication of expectations in economic markets generally and in financial markets particularly;
  • Explain regulation and deregulation of economic markets in general and of financial markets in particular
  • Evaluate the implementation of, and recent approach to, monetary policy in Australia and explain the transmission of monetary policy throughout the economy
  • Describe the role of money and financial institutions in recent problems in the world economy
  • Apply relevant theories to the real world issues and scenarios, such as how the institutional structure of the Reserve Bank Board can be designed to minimise the incentive to deliver undesirable outcomes
  • Critically evaluate the relevance of competing theories. For example, the extent to which different types of market failure apply to financial markets and consequently how best to regulate financial markets.

A 2-hour end-of-semester examination (80%) and class assignments totalling 2000 words (20%).

Prescribed Texts:

“Modeling Monetary Economies”, third edition - Bruce Champ, Scott Freeman and Joseph Haslag.

Breadth Options:

This subject potentially can be taken as a breadth subject component for the following courses:

You should visit learn more about breadth subjects and read the breadth requirements for your degree, and should discuss your choice with your student adviser, before deciding on your subjects.

Fees Information: Subject EFTSL, Level, Discipline & Census Date
Generic Skills:
  • High level of development: written communication; application of theory to practice; interpretation and analysis.

  • Moderate level of development: oral communication; collaborative learning; problem solving; statistical reasoning; critical thinking; synthesis of data and other information; evaluation of data and other information; accessing data and other information from a range of sources; receptiveness to alternative ideas.

  • Some level of development: team work; use of computer software.

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