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2012/2013  KAN-CM_SU8Q  Global Financial Crisis

English Title
Global Financial Crisis

Course information
Language English
Exam ECTS 7.5 ECTS
Type Elective
Level Full Degree Master
Duration Summer
Course period Summer
NOTE: The course schedule is at the moment ONLY available at www.cbs.dk
Time Table Please see course schedule at e-Campus
Study board
Study Board for MSc 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
  • Offer critical views of various government bailouts and proposed financial market reforms with theoretical perspective and empirical supports
Prerequisite
Corporate Finance and Investments
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 Please, see the detailed regulations below
Duration 4 Hours

Financial calculator and formula sheet allowed.
 
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. Critical thinking will be developed through in-depth understanding of theoretical models and empirical settings in select academic studies.
 
Teaching methods
Lectures, exercises, real-world examples and discussions, team works, presentations
Expected literature
Required course readings and literature:
Academic studies:
Introduction and fundamental
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.

In-depth analyses
Afonso, G., Kovner, A., Schoar, A., “Stressed, not frozen: the federal funds market in the financial crisis” (2011). Journal of Finance 66, 1109-1139.
Demyanyk, Y., Van Hemert, O., “Understanding the subprime mortgage crisis” (2011). Review of Financial Studies 24, 1848-1880.
Beber, A., Pagano, M., “Short-selling bans around the world: evidence from the 2007-09 crisis” (2011). Journal of Finance, forthcoming.
Vyas, D., “The timeliness of accounting write-downs by U.S. financial institutions during the financial crisis of 2007-2008” (2011). Journal of Accounting Research 49, 823-860.
Campello, M., Giambona, E., Graham, J.R., Harvey, C.R., “Liquidity management and corporate investment during a financial crisis” (2011). Review of Financial Studies 24, 1944-1979.

 
Last updated on 23-04-2012