• 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.

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.
 
Course plan:

1. Introduction
2. Overview of GFC
3. Causes of GFC
4. Government responses
5. Regulations
6. Market reforms
7. Other consequences of GFC
8. Managerial implications
9. Hedging strategies
10. Market stabilization mechanisms
11. Comprehensive review

A course compendium will be made available for purchase.

Course plan and readings from academic studies. :

1. Introduction
    
2. Overview of GFC
   Taylor, Mark P., “The global financial crisis: introduction and overview” (2010). Applied Financial Economics 20, Special Issue.
    
3. Causes of GFC
   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
    
4. Government responses
   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.
    
5. Regulations
   Edgar, R.J., “The future of financial regulation: lessons from the global financial crisis” (2009). Australian Economic Review 42, 470-476.
   Zingales, L., “A market-based regulatory policy to avoid financial crises” (2010). Cato Journal 30, 535-540.
    
6. Market reforms
   Moosa, Imad A., “Basel II as a casualty of the global financial crisis” (2010). Journal of Banking Regulation 11, 95-114.
    
7. Other consequences of GFC
   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.
    
8. Managerial implications
   Chor, D., Manova, K., “Off the cliff and back? Credit conditions and international trade during the global financial crisis” (2012). Journal of International Economics 87, 117-133.
    
9. Hedging strategies
    
10. Market stabilization mechanisms
    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.
     
11. Comprehensive review