An Introduction to Central Banking and Foreign Exchange

Learn about foreign exchange history, the spot foreign exchange market, the basics of a central bank, and the emerging market countries.



Weekly Effort

4-6 hours





Course Description

  • Explore foreign exchange history, gaining an understanding of the evolution and fundamental principles that have shaped the global currency market.
  • Examine the spot foreign exchange market, learning about its structure, operations, and significance in international trade and investment.
  • Understand the basics of a central bank, including its roles, functions, and impact on the economy, both domestically and internationally.
  • Investigate emerging market countries and their influence on and integration with the foreign exchange markets, recognizing the trends and challenges specific to these dynamic economies.

What You Will Learn

By the end of this course, learners will be able to:


  • Demonstrate knowledge of the historical context of foreign exchange, including crucial milestones such as the Bretton Woods system and the creation of the Euro, providing an essential background to modern currency systems.

  • Describe the key concepts and principles that underpin foreign exchange markets, with a particular focus on how they function, and the significant role played by central banks.

  • Evaluate and analyze current issues and challenges faced by emerging market countries in the foreign exchange realm, using critical thinking skills to understand complex economic situations.

  • Possess a solid foundation in foreign exchange history, market dynamics, and the ability to critically assess emerging market situations, preparing them for further studies or professional endeavors in the field of international finance.


Course Outline


Module 1: Foreign exchange history

Module 2: The spot foreign exchange market

Module 3: Basics of a central bank

Module 4: The emerging market countries


Image of David DeRosa in a white shirt and a navy blazer
David DeRosa
Adjunct Associate Professor

David DeRosa is a financial economist who largely specializes in areas of finance. He is deeply rooted in both practical real-world finance and in academic teaching and research. He has worked as a hedge fund trader, foreign exchange trader, investment manager, and consultant. His research usually is aimed at the publication of books in his areas of interest. He has also done a great deal of expert witness work in federal courts, all of which are supported by his education, experience, and publications. At Columbia Professor DeRosa teaches corporation finance, derivatives pricing, and foreign exchange.

Professor DeRosa's research is in the areas of finance and economics. He describes himself a researcher and practitioner of neoclassical finance and economics. His most recent research is aimed at debunking the idea that there are stock market bubbles. This has led to the publication of his book Bursting the Bubble: Rationality in a Seemingly Irrational Market (2021). But he has also done research in the areas of foreign exchange, derivatives pricing, and central banking.

Professor DeRosa received his Ph.D. in finance and economics from the Graduate School of Business of the University of Chicago (1978), now called the Booth School of Business, and his A.B. in economics from the College of the University of Chicago (1972).

Please note that there are no instructors or course assistants actively monitoring this course.

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