https://at-ceu.studyguide.timeedit.net/modules/DOPP5634?type=CORECurrently, there is no standalone course at CEU on financial sector activities. It is a huge gap which is felt whenever economic policy alternatives are discussed. Students specializing in economics or various areas of public policy - including economic policy - receive a master degree without a deep and detailed analysis and understanding of the nature and scope of financial institutions and their role in the market economy. Financial sector activities - the symbolic economy as one can say - are intimately interlinked with the functioning of the real economy. It strengthens further the cyclical nature of the market economy. That needs to be understood by future policy makers in order to become better equipped with policy instruments to mitigate the negative consequences of the business cycle. Fiscal issues cannot be properly understood without looking at other major components of economic policy, especially monetary policy. This latter, in turn, requires a deeper analysis into the nature & characteristics of money, banking, central banking, prudential regulation and supervision. During the course, students are offered a comprehensive assessment on the evolution of money and the characteristics of modern money. The nature and role of modern central banks is analyzed in detail. In addition to creating money, the activities and importance of central banks in operating interbank payment systems are highlighted. Students will understand the very specific nature of central banks compared to commercial banks and other important financial institutions. The objectives and instruments of monetary policy, as well as their potential effectiveness and efficiency is demonstrated through practical examples. The difference between the scope and instruments of monetary policy in closed and open economies are discussed in detail. The impact of currency convertibility on monetary sovereignty is highlighted by the impossible trinity. In addition, the behavior and fragility of commercial banks will be analyzed with special emphasis on the conflicting objectives they are required to pursue. Distinction will be made between liquidity and solvency. Bank resolution and restructuring will also be explained. It is closely connected with prudential regulation and supervision. The role of capital markets and securities exchanges in financial intermediation will be amply demonstrated.Part of the Policy track courses for MAIPA