Theories and practices of international finance is a subject that involves dynamic real-world events. Since the material covered in this course is emphasized daily in the newspapers and other media, you will soon find that the theories and practices of international finance seem to come to life.
And a daily reading of the Wall Street Journal or the London Financial Times makes an excellent supplement. As you progress through the subject, international financial news will become more and more meaningful and useful.
THE ACTORS
This course is not simply a study of abstract theories concerning the international consequences of changes in money supply or demand, prices, interest rates, or exchange rates. We also discuss the role and importance of the institutional and individual participants.
Most people tend to think immediately of large commercial banks as holding the starring role in the international monetary scene. Because the foreign exchange market is a market where huge sums of national currencies are bought and sold through commercial banks, the theories and practices of international finance will include many examples and instances in which such banks play a major part.
Course Arrangement
Chapters 1 through 3 identify the key institutions and the historical types international monetary system as well as discussing the current system.
In Chapters 4 through 7 the international monetary system is expanded by allowing payments to be due in a future time period. This results in a need for hedging instruments and expands the interaction between financial variables in different countries.
Chapters 8 through 9 are devoted to applied topics of interest to the international financial manager. Issues range from the “nuts and bolts” of financing imports and exports to the evaluation of risk in international lending to governments. The topics covered in these chapters are of practical interest to corporate treasurers and international bankers.
For the learners of this course who do not go on to a career in international finance, the major lasting benefit of the lessons contained here will be the ability to understand the international financial news intelligently and effectively.
