Syllabus

Title
2357 S3ATF1/2 Advanced Topics in International Finance
Instructors
Prof. Mojmir Mrak, Ph.D.
Contact details
Type
PI
Weekly hours
2
Language of instruction
Englisch
Registration
09/01/21 to 09/19/21
Registration via LPIS
Notes to the course
Subject(s) Master Programs
Dates
Day Date Time Room
Wednesday 12/01/21 02:00 PM - 06:00 PM Online-Einheit
Thursday 12/02/21 09:00 AM - 01:00 PM Online-Einheit
Friday 12/03/21 09:00 AM - 01:00 PM Online-Einheit
Monday 12/06/21 02:00 PM - 06:00 PM Online-Einheit
Tuesday 12/07/21 02:00 PM - 06:00 PM Online-Einheit
Thursday 12/09/21 09:00 AM - 01:00 PM Online-Einheit
Wednesday 12/22/21 08:00 AM - 10:00 AM TC.0.02 Red Bull

Contents

The course consists of three main parts.

  •      It will start with the examination of the two main components of the global international financial environment, namely (i) balance of payments (including international investment position), and (ii) exchange rates. This introduction is needed for an analysis of the concept and evolution of the international monetary system and of the international financial governance problems.
  •      The second part of the course is aimed at two specific risks in international finance, namely (i) foreign exchange risk (including forecasting of foreign rates based on international party conditions) and (ii) country risk (including political risk as well as economic and financial risk).
  •      Within the third part of the course, two specific international finance topics will be analysed in some depth. The first one addresses international capital flows to emerging economies from official sources (multilateral financial institutions, official development aid) as well as from private sources (selected financial instruments, such as syndicated loans and bonds). The second topic deals with issues of particular relevance for two specific country groups – one for the euro-area’s members and another one for emerging economies – both within the context of the ongoing COVID crisis. Analysis of the euro-area members group will be concentrated on the economic governance of the European monetary union prior to the global financial crisis and changes made in this area since then. The discussion related to the emerging economies group will be focused on growing external debts of many countries within this group and on alternatives for effective restructuring of these debts.

Learning outcomes

The main objective of the course is to give participants a focused overview of international finance issues at the global level. The course is designed to combine both a practical and theoretical approaches to global finance. Students will be put into positions of a various players in international finance (foreign direct and / or portfolio investor, creditor, government of the recipient country, multilateral financial institution, etc.). Mathematical context of the course will be kept to a minimum, with the main focus being on institutional aspects as well as on practical application.

After the course, participants are expected to understand main international finance concepts, their relationship to other macroeconomic aggregates as well as institutional aspects of international finance and capital flows at global level. More specifically, participants will be able: 

· to understand key concepts in international finance,

· to demonstrate ability to analyse international finance problems and to write issue papers on this subject, and

· to present ideas on international financial issues in a clear, concise and professional manner

Attendance requirements

At least 80% course attendance is necessary to pass.

Teaching/learning method(s)

The course will be carried out as a combination of lectures, exercises and individual assignments to be done by the participants. Reading assignments will be assigned to the students for each of the lectures. Students are expected to stay current in their reading assignment preparation before class, to regularly attend class and to participate actively in the class discussions.

Assessment

    Students will be assessed on:

    • their knowledge on the content domain of international finance,
    • their ability to understand and analyze the issues presented in their home assignments, and 
    • the quality of presentations in class discussions, the written reports and the examination questions; by quality in this context we mean the clarity and persuasiveness of each bit of work. 

    The final grade will be composed on the following four components:

    · During the course assignments          20 per cent 

    · Post course assignments                    30 per cent

    · Final Exam                                        50 per cent

    During the module assignments will complement lectures. Each of the assignments will be introduced in class and will have to be submitted within the time specified during the lecture. Post module assignments will be introduced in class and will be have to be submitted at the time of the final written exam. Final exam – in the form of a written “open book” exam – in the duration of about 90 minutes will be composed of between 6 - 8 questions. Most of the questions will of an essay type while 1 or 2 will be aimed at providing quantitative answers.   

    For a positive grade, a student must reach at least 60 per cent (60 out of possible 100 points), of this at least 25 points must be from the final exam.

    Prerequisites for participation and waiting lists

    • Completion of the assessment Phase
    • Successful completion of 8 courses within the subject "Grundlagen Finanzwirtschaft, Rechnungswesen und Steuern" ("Basics in Finance, Accounting and Taxes")
    • Allocation to the elective

    Readings

    1 Author: Eiteman, David and Stonehill, Arthur and Moffett, Michael
    Title:

    Multinational Business Finance


    Publisher: Pearson Education
    Remarks: chapters 2 (on exchange rates and international monetary system), 3 (on balance of payments), 5 (on foreign exchange market) and 6 (on international parity conditions)
    Year: 2016
    Content relevant for class examination: Yes
    Recommendation: Essential reading for all students
    Type: Book
    2 Author: Shapiro, Alan
    Title:

    Multinational Financial Management


    Publisher: Wiley
    Remarks: chapter 6 (Provided as VIENNA-2021-TEXT-1) (on country risk)
    Year: 2010
    Content relevant for class examination: Yes
    Recommendation: Essential reading for all students
    3 Author: Nelson, Rebecca
    Title:

    ·· Multilateral development banks: overview and issues for Congress. US Congress, July 2018)


    Remarks: (Provided as VIENNA-2021-TEXT-3) (on official capital flows)
    Year: 2018
    Content relevant for class examination: Yes
    Recommendation: Essential reading for all students
    4 Author: Clark, Ephraim and Levasseur, Michel and Rousseau, Patrick
    Title:

    International Finance

     


    Publisher: Chapman Hill
    Remarks: Chapter 16 and 17 on syndicated loans and euro-bonds (Provided as VIENNA-2021-TEXT-4) (on private capital flows)
    Year: 1993
    Content relevant for class examination: Yes
    Recommendation: Essential reading for all students
    5
    Title:

    Capital flows report: sudden stop in emerging markets, IIF, April 2020


    Remarks: (Provided as VIENNA-2021-TEXT-2) (on international capital flows to emerging countries)
    6 Author: Protopapa, Marco
    Title:

    A first look at fiscal dynamics in the Euro area after COVID-19: the case for a shift in the fiscal governance system. SUERF Policy Note, June 2020


    Remarks: (Provided as VIENNA-2021-TEXT-6) (on euro area governance after COVID)
    Year: 2020
    Recommendation: Essential reading for all students
    7 Author: Xafa, Miranda
    Title:

    Euro-area governance reform: the unfinished agenda.


    Publisher: CIGI
    Remarks: (Provided as VIENNA-2021-TEXT-5) (on euro area governance)
    Year: 2018
    Recommendation: Essential reading for all students
    8 Author: Bulow, Jeremy and Reinhart, Carmen and Rogoff, Kenneth Rogoff, and Trebesch, Christoph.
    Title:

    The pandemic debt: new steps are needed to improve sovereign debt workouts. F&D, fall 2020


    Remarks: (Provided as VIENNA-2021-TEXT-7) (on COVID related external debt problems of emerging economies)
    Recommendation: Essential reading for all students

    Recommended previous knowledge and skills

    Though not obligatory for official enrolment into the course, basic understanding of macroeconomic concepts would be desirable.  

    Availability of lecturer(s)

    Lecturer can be contacted via mail: mojmir.mrak@ef.uni-lj.si

    Additional information on MyLEARN.

    A course pack consisting of some of the above texts, presentations and cases will be available before the beginning of the course.

    Unit details

    Unit Date Contents
    1 Part 1

    Conceptual framework for analysing international finance (part 1) – balance of payments (Wednesday, 1 December; 4 hours)

    · Balance of payments concept

    · Balance of payment analysis

    During the course assignment No. 1: On balance of payment

    2 Part 2

    Conceptual framework for analysing international finance (part 2) – exchange rates and international monetary system (Thursday, 2 December; 4 hours)

    · Exchange rates and exchange rate policies

    · International monetary system: concept and evolution

    · Global financial governance

    · Post course assignment No. 1: Finnish Maarka and Swiss Franc

    · Post course assignment No. 2: Yuan exchange rate developments and its internationalization

    3 Part 3

    Specific risks in international finance (part 1) – foreign exchange risk (Fridayday, 3 December; 2 hours)

    · Foreign exchange markets and international parity conditions 

    · Foreign exchange risk concept

    · Instruments for foreign exchange risk mitigation

    · During the course assignment No. 2: On currency carry trade

    4 Part 4

    Specific risks in international finance (part 2) – country risk (Fridayday, 3 December; 2 hours)

    · Concept and analytical framework for measuring country risk

    · Credit rating agencies and their importance

    · Post course assignment No. 3: Country risk of an emerging economy

    5 Part 5

    International capital flows to emerging economies (part 1) – concept of capital flows and their link to macroeconomic aggregates (Monday, 6December; 1 hours)

    · International capital flows and macroeconomic aggregates

    · Classification, volume and structure of international capital flows

    · Liberalization of international capital flows

    6 Part 6

    International capital flows to emerging economies (part 2) – flows form official sector (Monday, 6 December; 3 hours)

    · Multilateral financial institutions

    · Bilateral official flows with special reference to official development aid 

    · Post course assignment No. 4: Cooperation of »your country« with MFIs

    7 Part 7

    International capital flows to emerging economies (part 3) – flows from private sector (Tuesday, 7 December; 4 hours)

    · Euro-financial markets

    · Syndicated loans

    · Eurobonds

    ·  During the course assignment No. 3: On syndicated loans and / or eurobonds

    8 Part 8

    Specific international finance issue No. 1: Euro-area and its economic governance (Thursday, 9 December; 2 hours)

    · Optimal currency theory as a theoretical basis of monetary unions

    · Original euro-area's economic governance

    · Post-global financial crisis setting of the reformed euro-area’s economic governance

    · COVID crisis and its implications on euro-area’s economic governance  

    9 Part 9

    Specific international finance issue No. 2: External debt of emerging economies and its management (Thursday, 9 December; 2 hours)

    · Sources of emerging countries’ external debt

    · Debt restructuring of various categories of debts

    · External debt management under COVID crisis circumstances

    · During the course assignment No. 4: On a country in a crisis 

    Last edited: 2021-10-21



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