International Financial Institutions and International Financial Relations (in English)

  • Credits: 6
  • Ending: Examination
  • Range: 2P + 4C
  • Semester: winter
  • Year: 1
  • Faculty of International Relations

Teachers

Included in study programs

Economic Diplomacy (in English language)

Teaching results

The main objectives of the course can be defined as follows:
- to discuss the reasons for the establishment and existence of international monetary and financial institutions now and in the future, explain the operations of these institutions, explain the reasons for the World Bank Group, IMF, International Development Banks, ECB and other institutions and discuss Slovakia's integration into international monetary and financial institutions, analyze the role and prospects of IFIs during the crisis
- analysis of international financial and monetary relations with emphasis on financing international trade.
Knowledge and understanding: to understand the functioning of the international monetary system and the role and position of international financial institutions. By completing the course, students gain an overview of the functioning of international payments, the importance of INCOTERMS for international trade finance, an overview of documentary means of payment and their application in international trade, practical skills using a documentary letter of credit, including the development of a complex business case.
Competence: understanding, formulation and analysis of the functioning of international financial institutions and international financial relations, selection of a suitable payment term and risk mitigation in international trade, detection of the threat of misuse of international trade for money laundering and terrorist financing.
Practical skills: application of acquired theoretical knowledge in practice in formulating the practical significance of international financial institutions with special regard to financial crisis management. By completing the course, the student gains practical experience with the use of a bill of exchange, documentary letter of credit and a bank guarantee and acquires the competencies of the right choice of payment terms and trade finance.
After successful completion of this course, students will be able to:
- identify and analyze the main areas of activity of international financial institutions
- formulate measures to improve the functioning of these organizations
- understand the role of international institutions in solving global problems
- understand the functioning of the international monetary system and international trade finance.

Indicative content

Development of the international monetary system. International Monetary Fund. World Bank Group.
Regional development banks. Bank for International Settlements. European Monetary Integration, European Central Bank. Basic characteristics of international trade finance. Payment terms, risk elimination, INCOTERMS delivery terms. Non-documentary means of payment. Documentary payment and guarantees. Financing and lending in international trade. Money laundering and terrorist financing. Innovation in international financial relations.

Support literature

BAKER, A.F.P.: International Financial Institutions, Longham, London, 1996.
GRATH, A.: The Handbook of International Trade and Finance, Kogan Page Ltd., London. 2016.
VREELAND, J.R.: The International Monetary Fund. Politics of Conditional Lendings. Taylor & Francis, Abingdon, Oxfordshire, 2007.
LESSAMBO F.I.: International Financila Institutions and Their Challenges. Palgrave Macmillan, New York. 2015.
2020 ICC Global Survey on Trade Finance: Securing future growth. ICC. Paris. 2021
World Payments Report 2021. Capgemini Research Institute. 2021
The Uniform Customs and Practice for Documentary Credits (UCP600). International Chamber of Commerce. Paris. 2007.
INCOTERMS 2020. International Chamber of Commerce. Paris 2020
Act no. 492/2009 Coll. Payment Services Act
Act no. 483/2001 Coll. Banking Act
Act no. 191/1950 Coll. Bill of exchange and check law
Websites of international financial institutions

Syllabus

The course deals with the development of the international monetary system, the solution of the post-war organization of the international monetary system and the establishment of the IMF and the World Bank. It explains the position and functions of these institutions, their lending and development activities. It explains the reasons for the creation, function and position of regional development banks. It analyzes the European monetary system and the activities of the ECB. He deals with the financing of international trade. 1. Development of the international monetary system. Definition of the international monetary system. The gold standard and the interwar period. Bretton Woods system. The collapse of the Bretton Woods system. Exchange rate regimes. 2. International Monetary Fund. Basic facts. Goals. SR and IMF. IMF lending activity. Financial crises and the role of the IMF in resolving them. The future of the IMF. 3. World Bank Group. Basic facts. Goals. World Bank institutions - IBRD, IFC, IDA, MIGA. SR and the World Bank. Activities of the World Bank and its institutions. 4. Regional development banks. European Bank for Reconstruction and Development. Asian Development Bank. New development bank. Asian Infrastructure Investment Bank. Islamic Development Bank. Inter - American Development Bank. African Development Bank Basic facts. Goals. Examples of projects. 5. Bank for International Settlements. Basic facts. Goals. Basel principles and their importance in the regulation of the banking sector. 6. European Monetary Integration, European Central Bank. European Investment Bank. History and stages of EMU. Convergence criteria. The euro and its benefits. European System of Central Banks. Eurosystem. ECB, EIB - basic facts, goals, tasks. 7. Basic characteristics of international trade finance. Basic starting points for the implementation of international trade finance. Subjects. SWIFT and its importance for international financial relations. The role of banks and financial institutions in the international trade. 8. Payment terms, risk elimination, INCOTERMS delivery terms. Definition of payment terms. Definition of risks and possibilities of their elimination. Delivery terms and their role in international trade financing. 9. Non-documentary means of payment. Bills of Exchange. Institutional and legislative preconditions for the implementation of international payments. Definition of non - documentary payment instruments. TARGET and SEPA and their role in the international payment system. Bills of exchange and their role in international financial relations. 10. Documentary payment and guarantees. Documentary letter of credit as the most important tool of business financing. Practical use. Types of letters of credit. The role of documentary collection. Individual types of bank guarantees and their use. 11. Financing and lending in international trade. Definition of financial instruments. Financial analysis as a basic starting point for financing. Characteristics of individual types of loans and instruments of short-term (letters of credit, commodity finance, factoring), medium and long-term financing (export financing, forfeiting and leasing) 12. Money laundering and terrorist financing. Definitions. International initiatives in the fight against money laundering and terrorist financing. The role of the FATF and other international institutions. Legislation governing this area - EU Directives. 13. Innovation in international financial relations. Innovation in international payments - instant payments within SEPA and SWIFT. Innovation in International Trade - Trade Service Utilities (TSU). Bank payment obligation

Requirements to complete the course

The final grade is based on continuous control of the study during the teaching part of the semester and the final written exam as follows: 40% of the overall assessment of the subject consists of continuous control during the study (active attendance on seminars 10%, semester presentation 15%, case study 15%). The final evaluation is in the form of a written exam (60% of the total evaluation of the course).

Student workload

Attendance on lectures 26 h, attendance on seminars 52 h, preparation for seminars 10 h, preparation of presentation 8 h, elaboration of case study 8 h, preparation for exam 52 h.

Language whose command is required to complete the course

English

Date of approval: 10.02.2023

Date of the latest change: 12.01.2022