The Euro crisis and the new banking and financial regulations

Credit hour 2.5
Total number of hours 15
Number of hours for lectures 15

Directors

Dr. Felix RITCHIE

Goals

At the end of the module, students should feel confident of their ability to discuss a range of issues including

·         how the different parts of the economy are interrelated, and how countries are linked together

·         the causes of the financial crisis

·         the problems of the Euro are and the lessons for other countries

·         the rationale behind the drive for austerity since 2007

·         the implications of the new structures being introduced in Europe

The emphasis will be on gaining a good understanding of broad concepts, rather than development of technical arguments. This understanding will be tested by a debate between students and a reflective piece of writing.

Content

This module is designed to give students an understanding of the forces behind the recent financial crises in Europe, and how this led to the development of the banking union and cross-national regulation.

It will provide an introductory understanding of core theory in macroeconomics and banking, and its application to European countries, but with an equal emphasis on the political economy of the Euro and the institutions of the EU.

Day 1 : Introduction to macroeconomics : why a country doesn't work like a household

Day 2 : Exchange rates and currency unions 

Day 3 : Banking, credit and the relationship between government and private finance

Day 4 : Crisis and responses : the European Financial Stability Fund, banking union and the Single Supervisory Mechanism

Day 5 : Presentations and summary

Bibliography

Background reading :

 

- Allen L (2013) The global economic crisis : a chronology.  London : Reaktion Books.

- Marsh D. (2011) The euro : the battle for the new global currency . New Haven : Yale University Press

Tests

The module will be evaluated with the following compulsory tasks:
  • Daily summaries (40%)
For each of the first four days, students will be required to produce a summary of 150-200 words of the key messages from the days’ teaching. The audience will be an intelligent lay reader who has not attended the lectures. Summaries do not need to cover all of the day’s teaching but should pick out two or three key points which are most interesting/useful. Summaries will be graded for (a) accuracy (b) clear communication (c) avoidance of technical jargon.

  • Presentation (60%)
Students will be asked to devise and deliver a short (15 min) presentation on the topic “Will the new banking regulations work? Understanding lessons from the financial crisis”. The presentation should consider economic, political and regulatory issues. The presentation will be followed by questions. The presentation will be awarded a group mark, adjusted for presentation.

 

Additional Information

No prior knowledge of economics, finance or European legislation is assumed. However, students should be familiar with the basic geography of Europe and the history of European integration  since 1945:

http://www.ecb.europa.eu/ecb/educational/facts/euint/html/ei_001.en.html


Teaching and Learning Strategy :

The module will employ a mix of taught material and group exercises. As students come from a mix of academic backgrounds and nationalities, the sessions will focus on developing students’ understanding of concepts and their abilities to express them, rather than developing a specific technical knowledge. Therefore, a key element will be getting the students to explore concepts themselves. The requirement for daily summaries in non-technical language is a key element of this: being able to express oneself in everyday language (rather than technical language and diagrams) is a key indicator of whether the topic is truly understood.

The presentation on the Friday is designed to extrapolate from the first four days’ teaching. Not all the material needed for the presentation will be covered in classes; the aim is for students to draw their own inferences. This will be done as a group project to encourage conversations and co-operative thinking. The presentation will not be marked on the accuracy of conclusions, but on the arguments put forward and evidence used to reach those conclusions.