International financial markets are a powerful engine of both growth and instability for the global economy. They facilitate the transmission of positive and negative economic shocks among nations and pose challenges and opportunities to firms and investors. Aim of the course is to let you master the functioning of foreign exchange markets and international portfolio diversification, as well as to gain an insight into many current crucial issues concerning international financial markets on a worldwide scale. The interaction between policy variables and financial markets/flows will be discussed extensively. Attention will also be paid to the historical evolution of the international financial infrastructure, as a necessary prerequisite to develop a stronger understanding of the complex dynamics lying at the basis of today’s global markets. A major focus will be on FX markets’ functioning, exchange rate parity conditions and exchange rate determination, international risk management and diversified international investments.