Advanced Financial Instruments for Sustainable Business and Decentralized Markets

ABOUT THE COURSE: More recently, with the Paris agreement, Kyoto Protocol, and UN demand for a sustainable economy, the interest of investors in sustainable financial instruments has been accentuated. Additionally, the need for an open, transparent, and secure financial system has contributed to the popularity of newer and decentralized instruments like cryptocurrency, stablecoins, and CBDCs. This program has been carefully designed to cater to the needs of a diverse audience like traders, brokers, consultants, and other industry professionals. This course aims to give the learner an in-depth understanding of cryptocurrencies and the newly emerged instruments under climate finance, i.e., carbon markets, and ESG markets. The program aims to help the learner with hands-on application and working knowledge on topics related to performance evaluation of ESG investments, the market microstructure of carbon markets, and cryptocurrency as an asset class. This program has been carefully designed to transform the finance industry and other industries that borrow significantly from finance. INTENDED AUDIENCE: Management students (Ph.D. and MBA), Commerce students (B.Com, M.Com.), Chartered Accountants, Science (B.Sc., M.Sc.), and Engineering students (B-Tech, M-Tech) Finance professionals (Investment analysts, banking professionals, accountants, credit analysts), Data ScientistsINDUSTRY SUPPORT: Data Science and Business analytics: Mu Sigma Analytics, Fractal Analytics, Manthan. Latent View, Tiger Analytics, Absolutdata, Convergytics, UST Global; Equity research firms, Credit rating firms, Investment Banks, Corporate Banking sector, Corporate Finance roles across all corporates (ICRA, ICICI, HDFC, Nomura, Lehman Brothers, SBI Capital Markets, Deutsche bank, HSBC Bank, etc.)

Week 1:Introduction to Modern Financial Markets: Market Microstructure, Limit order book vs. Quote driven markets, market efficiency and price discovery, Risk-return framework in financial markets
Week 2:Money, banking & payment systems, Challenges of digitization: Origin and history of money, functions, and characteristics of money, basics of banking and design of payment systems, challenges of digitization
Week 3:Blockchain and Cryptocurrency market: Blockchain technology overview, the impact of blockchain on finance, Nakamoto Consensus, cryptography, bitcoin mining, and mechanics, altcoins, different aspects of owning cryptocurrency, buying and selling, wallets, exchanges, risks and trade-offs of decentralized networks, technical challenges, Cryptocurrency-portfolios in a mean-varianceframework, common risk factors in cryptocurrency, asset pricing models, impact of investor sentiments on crypto market, various sentiment indicators like, GSVI, twitter sentiment etc., connectedness with other markets
Week 4:Central Bank Digital Currencies (CBDCs): Emergence of CBDCs across the countries, the distinction between CBDC and private currencies like Diem, different models of CBDCs, the role of the state in the financial system, the future of money
Week 5:Introduction to Climate Finance: Climate finance, Environmental finance, Green finance, climate change risk, UNFCC, and Kyoto protocol, Carbon Trading, ESG and Socially Responsible Investment (SRI) Funds
Week 6:Fundamentals of Sustainable investing: Principles, Types of screening, Relationship between financial performance and screening intensity, Economic and Financial Effects of Environmental Regulation
Week 7:Major SRI markets: USSIF-Trends, sustainable investors, strategies used by sustainable investors; EUROSIF- 7 responsible investment strategies, European SRI Transparency Code, EU Green bond standardWeek 8:European Union Emission Trading Scheme (EU-ETS): Introduction to EU-ETS, Principles, and objectives of EU-ETS, structure, phases, and reform in EU-ETS, allowance allocation mechanism, Market stability reserve, Major organized exchanges
Week 9:Emission trading scheme in other countries: China, US, UK, South Korea, New Zealand, etc. Financial instruments in carbon markets
Week 10:Price drivers in EU-ETS: Marginal abatement cost, Energy prices, Renewable energy supply, weather variation, banking of allowances
Week 11:Carbon price forecasting and market connectedness: Volatility estimation, Financial models for price and volatility forecasting, carbon market connectedness with stock, energy, and other commodity markets,
Week 12:Sustainable investing in other countries: China, Canada, Australia, India, etc.