2012/2013  BA-HA_HU8K  Global Financial Crisis

English Title

Global Financial Crisis

Course information
Language	English
Exam ECTS	7.5 ECTS
Type	Elective
Level	Bachelor
Duration	Summer
Course period	NOTE: The course schedule is at the moment ONLY available at www.cbs.dk/summer.
Time Table	Please see course schedule at e-Campus
Study board	Study Board for BSc in Economics and Business Administration
Course coordinator
Faculty - Jimmy Yang, Oregon State University Patricia Plackett - Department of Operations Management
Main Category of the Course
Finance
Last updated on 23-04-2012

Learning objectives

At the end of the course, the student should be able to: Describe the causes and consequences of the recent global financial crisis. Understand the rationales and impact of various government bailouts. Explain the differences in the crisis impact across developing countries and emerging markets. Demonstrate a thorough understanding of the new financial architecture and the proposed financial market reforms. Define interest rate risk and foreign exchange risk as well as demonstrating how they can be managed by various financial instruments. Understand various market stabilization mechanisms present and being considered in the global financial markets as well as their pros and cons.

Prerequisite

Corporate Finance and Investments are recommended

Examination

Global Financial Crisis

4-hour written exam: Type of test Written Exam Marking scale 7-step scale Second examiner No second examiner Exam period Summer Term Aids Closed Book Duration 4 Hours Exam aids: formula sheet and financial calculator

Course content

The goal of this course is to teach students the causes and consequences of the recent global financial crisis as well as its implications for global financial managers. Students will be exposed to a number of recent academic articles related to the global financial crisis and its impact on doing business in a global environment. In addition, given the excessive market volatility during and following the global financial crisis, various market stabilization mechanisms will be introduced and discussed. Main topics: Sub-prime mortgage New financial architecture Bank run Basel II Bailouts Rating agency International trade flows Hedging instruments Financial market reform Market stabilization mechanisms      The course’s development of personal competences: During this course, students will develop analytical skills and adapts to different ideas and approaches. Through class discussions, presentations, and team works, students will also develop communication skills, convey respect for different perspectives, and leverage diverse contributions. With the international focus, students will be able to accommodate global differences.

Teaching methods

Lectures, exercises, real-world examples and discussions, team works

Expected literature

Academic studies: Berkmen, P., Gelos, G., Rennhack, R., Walsh, J., “The global financial crisis: explaining cross-country differences in the output impact” (2009). IMF Working Paper 09/280. Cecchetti, Stephen G., “Crisis and responses: the Federal Reserve in the early stages of the financial crisis” (2009). Journal of Economic Perspectives 23, 51-75. Crotty, James, "Structural Causes of the Global Financial Crisis: A Critical Assessment of the ‘New Financial Architecture’" (2008). Economics Department Working Paper Series. Paper 16. http://scholarworks.umass.edu/econ_workingpaper/16 Edgar, R.J., “The future of financial regulation: lessons from the global financial crisis” (2009). Australian Economic Review 42, 470-476. Hsieh, P., Kim, Y, Yang, J.J., “The magnet effect of price limits: A logit approach” (2009). Journal of Empirical Finance 16, 830-837. Kim, Y., Yang, J.J., “What makes circuit breakers attractive to financial markets? A survey” (2004). Financial Markets, Institutions, and Instruments 13, 109-146. Moosa, Imad A., “Basel II as a casualty of the global financial crisis” (2010). Journal of Banking Regulation 11, 95-114. Taylor, Mark P., “The global financial crisis: introduction and overview” (2010). Applied Financial Economics 20, Special Issue. Zingales, L., “A market-based regulatory policy to avoid financial crises” (2010). Cato Journal 30, 535-540.