The European Union has long been the world's leading case of economic integration. Since 1990 it has been progressing towards an integrated financial area, culminating in monetary union (EMU) and the Financial Services Action Plan. Examples of the results (according to the FT): 'The dollar's supremacy has been challenged in the global debt markets.' 'The large funds have indulged in a frenzy of cross-border buying...with the volume of paper launched by European companies rising five-fold.' Vodafone-Mannesmann, Unicredito-HVB, Euronext,...
How does the European Central Bank differ from the Fed? Will the euro compete with the dollar as an international currency? Can European capital markets challenge the US for international portfolio managers and non-European issuers? Will Europe soon have serious venture capital and junk bond sectors? Will the European banking sector experience a deep wave of cross-border restructurings? Will European securities exchanges merge – or disappear? Will the new regulatory environment (MiFID, CESR, CEBR, …) lead to unified European markets? How well placed is Europe to resist the current financial turmoil? We will explore these and other key issues.
Students will learn about European financial markets and institutions in the conceptual framework of financial integration. Globalisation is an abstract idea – this course makes it concrete in the European context.
This course will be especially relevant for people with career interests in investment analysis, asset management, capital markets, hedge funds, corporate finance, and the finance/treasury function of corporates – in the City of London, elsewhere in Europe, or dealing with European markets from Asia or America.
· Economic and Monetary Union (EMU), European Central Bank, and euro-area monetary policy.
· European financial integration: what is it, why does it matter for business?
· Government bond markets.
· Corporate bond markets, securitization
· Equity markets.
· The regulatory framework and financial market integration.
· The transformation of the banking sector
· The current financial turmoil and European financial markets
· The internationalisation of the financial sector: case study of Iceland
· The euro and the international financial system
Lectures plus presentations by guest ‘practitioners’. In the past, these have included the Chair of 3i; the Executive Vice President of Euronext; the CEO of MTS (euro-area bond trading platform); the Director of the London Investment Banking Association; the Vice Chairman & Managing Director of Goldman Sachs International; the head of wholesale markets at the FSA; the chief European economist of JP Morgan;et al.
A corporate finance course and a course in macro-economics, otherwise some pre-course reading will be required.
Assessment will be based on a 500-word individual assignment (30%), a 1500-word individual assignment (50%), and class participation (20%).