The purpose of this course is to provide students with an overview of the financial system of a modern economy, the role of money, financial markets and financial institutions with particular emphasis on banks. Its content covers: an overview of an economy’s financial system, definitions, functions, qualities, measurement and evolution of money and payment system; financial markets, types and functions, financial instruments, nature and structure of interest rates, term and risk structure of interest rates, commercial banks and their operations, information asymmetries and information costs, the problem of adverse selection and moral hazard, fundamental the problem of financial intermediation, bank risks, financial intermediary management, risk management in banks, asset-liability management model, regulation of banks and the financial sector, central banking, its functions, monetary policy formulation, goals and tools