Why This Master?

The goal of this specialised program is to form experts who are able to base their analysis of financial problems and developments within a sound theoretical and quantitative framework. Their analysis should also enable them to work out or to adapt existing (company) strategies.

Indeed, working in the financial sector is becoming much more demanding, but also very exiting. The deregulation of financial markets has opened many opportunities for financial service companies, investors, borrowers as well as for the government. Technological improvements in communication and information processing have decreased transaction costs dramatically, which altered the core business of banks completely. At the same time, they explain the huge growth rates in the number of transactions on financial markets. Investors have never before been confronted with such a broad range of investment opportunities, whereas corporate and government borrowers have flexible access to money, being able to choose the maturity, the currency and even the risk-profile of their financing. At the same time, government agencies in general and central banks more specifically can not only actively use financial markets to steer the economy, but also learn about the expectations of economic agents, to the extent that they are reflected in the prices of financial assets.

Of course, no benefits without any dangers - financial markets never offer free lunches. Although financial intermediaries are undoubtedly offered many opportunities, choosing among them becomes difficult. As financial markets are in constant move, a choice that seems to add value to the company in one scenario may well turn out to be fatal in other circumstances. Moreover, financial organisations often have many business lines and therefore many counterparties. It follows that a clear understanding of all the interrelationships is crucial to ascertain the risk position of the entire organisation. Likewise, a major concern of prudential authorities is that the failure of one participant will lead, through its multiple transactions, to the failure of several otherwise sound institutions, ultimately causing a total breakdown of the financial system. All these examples point out that risk management on financial markets should be well developed.

Thorough understanding of the complex relationships and dynamics of financial markets and institutions requires insight in many disciplines. Knowledge about the organisation of financial markets and the mechanics of the assets traded is not sufficient, if it is not supplemented by awareness of macroeconomic and monetary concepts. Moreover, the quantitative nature of finance also requires a sound command of econometrics and data processing skills. It is precisely the need of the financial community for people who are able to combine these economic, financial and quantitative skills that led the Faculty of Economics and Business Administration at Ghent University to organise the Master in Banking and Finance. This Master draws heavily upon the expertise of the young team of teachers and researchers from the Department of Financial Economics. This department groups sub-fields such as monetary economics, banking, microeconomics of financial markets, investment analysis, financial econometrics, and risk management.