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Unit information: Financial Crises in 2018/19

Please note: It is possible that the information shown for future academic years may change due to developments in the relevant academic field. Optional unit availability varies depending on both staffing and student choice.

Unit name Financial Crises
Unit code EFIM30018
Credit points 10
Level of study H/6
Teaching block(s) Teaching Block 1 (weeks 1 - 12)
Unit director Professor. George Bulkley
Open unit status Not open
Pre-requisites

None

Co-requisites

None

School/department School of Economics, Finance and Management
Faculty Faculty of Social Sciences and Law

Description

The unit will cover the causes, consequences, and appropriate policy relating to credit crises. Most of your work on asset pricing assumes efficient markets. Recent events cast doubt on the macro rationality of markets. We start with an examination of the UK credit crisis. We will look at the background and discuss who the players were. To what extent were bankers, the regulators or the government responsible? What were these securities that precipitated the crisis and why did the markets in them collapse leading to a crisis of liquidity.

We then identify the elements in the UK crisis that are common to similar crises around the world and in history. Is the UK crisis part of a general pattern? We examine other financial crises that have been seen in the last century. We look at problems of asset price bubbles and speculation, bank runs, liquidity, the role of credit in business cycles, the role of financial intermediation.

We then turn to the future and consider what the government response should be in the short term and how regulation might be tightened so that in the long run a crisis is less likely to recur.

Intended learning outcomes

On successful completion of this unit a student will be able to:

  • Understand the causes and consequences of asset price bubbles
  • Understand the recent crisis of 2007 and the current Euro crisis

Teaching details

10 hours of lectures, 5 classes.

Assessment Details

Formative: Essay of approximately 1500 words

Summative: 100% 1.5 Hour exam

All learning objectives are assessed by both summative and formative assessment

Reading and References

“Deciphering the Liquidity and Credit Crunch 2007–2008”, Markus K. Brunnermeier, Journal of Economic Perspectives, Volume 23, Number 1, Winter 2009, Pages 77–100.

“The Return of Depression Economics and the Crisis of 2008” P. Krugman, Penguin, 2008.

“Manias, Panics, and Crashes, A History of Financial Crises” , C. Kindleberger, Wiley 5th edition, 2005

“Slapped by the Invisible Hand” Gary Gorton, OUP 2010.

“The Regulatory Response to the Financial Crisis”, C. Goodhart, Edward Elgar 2009.

“Financial Stability Reports”, 2006-2009, found on Bank of England website, (henceforth BOE), Found at: http://www.bankofengland.co.uk/publications/

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