Course Details

1. Understand the essential elements of money and the economic system of financial intermediation.
2. Present an overview of the institutional characteristics of the banking system and appreciate the need of financial intermediation in the shipping markets.
3. Distinguish the structure of Financial Markets including Debt and Equity Markets, Primary and Secondary Markets, Exchanges and Over-the Counter Markets and Money and Capital Markets.
4. Evaluate alternative means of shipping finance including debt provisions, syndicated loans, private equity, bridge financing etc.
5. Develop working knowledge of capital budgeting/project appraisal techniques applied to shipping finance scenarios.
6. Identify shipping finance risks including interest rate risk, foreign currency risk and freight rate risk and the financial instruments used to counter these risks.

• Introduction to banking, financial markets and the economic environment.
• The Structure of Financial Markets: Primary Markets versus Secondary Markets, Money Markets versus Capital Markets, Foreign Exchange Markets, Spot Markets versus Future Markets.
• Sources of shipping finance: Term Loan, Syndicate Loans, private equity, mezzanine financing.
• The Capital Budgeting Decision: revenue and cost drivers of shipping operations, discounted cash flow analysis, net present value, return on equity, internal rate of return, capital constraints, liquidity constraints.
• Shipping finance risk: interest rate risk, foreign currency risk, freight rate risk.
• The use of financial derivatives in hedging shipping finance risks: fixed-floating interest rate swap, forward rate agreements, freight rate agreements.

• Frederic S. Mishkin, The Economics of Money, Banking and Financial Markets,2009
• Saunders, A. Financial Institutions Management: A modern perspective, 3rd edition, 2000
• Bain K., Howells P., Monetary Economics: Policy and its Theoretical Basis, 2009

• Journal of Banking and Finance, Journal of Banking, Finance and Accounting , Journal of Money, Credit and Banking

The course will be delivered through lectures, discussions, and presentations. During the lectures students are encouraged to participate in discussions and through solving exercises and mini case studies. The teaching methodology is augmented with consultations during office hours, home study and preparation for the exam.