Why do we have a financial system?

Macro – Financial Markets and the Financial System

In this course, Professor Sir John Kay (University of Oxford) examines the role financial markets and the financial system play in the economy. In the first module, we look at the key question of why we have a financial system. After that, we look at money in more detail - what we mean when we talk about money, what purposes it serves and the way we measure it when constructing economic statistics. Then, in the third module, we will explore monetary policy in more detail. After this, we will explore how the global financial developed from 1945 onwards and its key institutions today. In the fifth module, we will explore how the financial markets provide capital for business and how this has changed over the last few centuries. Finally, we will discuss the 2008 financial crisis.

Why do we have a financial system?

In this module, we look at the key question of why we have a financial system. In particular, we will focus on: (i) what does the financial system look like in the physical world; (ii) what do financial firms do; (iii) the difference between stocks and bonds, and other financial assets; (iv) do we need a financial system, including the link between economic development and financial development; (v) what happens when countries don’t have a financial system; and (vi) what is the purpose of a financial system.