This two-week course is intended for mid- to senior-level officials in central banks, ministries of finance, and regulatory agencies.

The aim of this course is to explore the nature of financial intermediation, the role financial markets and institutions play in the allocation of risk, and the need for regulatory mechanisms to create the appropriate incentives for all the participants in the financial system. The course will pay particular attention to the emergence of derivative markets and instruments, analyzing the conceptual bases of these new instruments, including their pricing and trading strategies, as well as how financial entities use them in risk management. Topics covered include: financial market structure; capital markets (short-term and long-term finance); derivatives and their pricing (futures, forwards, swaps, options); commercial bank risk management; credit risk models; regulation of banks, capital markets, and derivatives; and origin and nature of financial crises.

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