GRA 6546 Credit Markets and Financial Crises
GRA 6546 Credit Markets and Financial Crises
This course seeks to provide a comprehensive overview of credit markets and some of the important crises that has occurred in the last century (esp. 1930s and the 2007 financial crisis). It covers the financial instrument and institutions that exist and operate in credit markets, with a special emphasis on the role of banks, but will also look at institutions such as pension, mutual and hedge funds and discuss the linkages that exist between these funds and banks. Credit provision in the form of bank lending, securitization and structured financial products such as credit derivatives and CDOs will be studied. The role of government subsidies and regulations, and how these may impact market participants incentives and behaviour will also be adressed.
The course contains a mix of theory, institutional aspects and case studies of actual events.
- To get an overview of existing institutional arrangements and structures.
- To study the linkages that exist between different institutions operating in credit markets.
- To understand how the existence of asymmetric information in credit market make these markets different from other markets and gives rise to moral hazard and adverse selection problems that affect participants' incentives and behaviours.
- To understand how the design of financial contracts may mitigate or enlarge risks and problems arising from asymmetric information.
- To understand how government subsidies and regulations may mitigate or enlarge risks and problems arising from asymmetric information.
- To understand how financial shocks may be transmitted to the real sector.
- To identify situations where asymmetric information gives rise to adverse selection or moral hazard.
- To analyse how adverse selection and moral hazard affects market participants incentives and actions.
- Provide students will the skills to ability to analyse and discuss the above in a structured and "precise" manner.
- To give students sense of the complexity of recent developments in credit markets.
- To understand the trade-offs associated with government intervention in credit markets.
(Details may vary from year to year)
- Credit markets and asymmetric information
- Banks and other financial intermediaries
- Securitization and credit derivatives
- Government subsidies and regulations
- Case study(ies)
Please note that while attendance is not compulsory in all courses, it is the student’s own responsibility to obtain any information provided in class that is not included on It's learning or text book.
This is a course with continuous assessment (several exam components) and one final exam code. Each exam component is graded by using points on a scale from 0-100. The components will be weighted together according to the information in the course description in order to calculate the final letter grade for the examination code (course). Students who fail to participate in one/some/all exam elements will get a lower grade or may fail the course. You will find detailed information about the point system and the cut off points with reference to the letter grades when the course start.
All courses in the Masters programme will assume that students have fulfilled the admission requirements for the programme. In addition, courses in second, third and/or fourth semester can have specific prerequisites and will assume that students have followed normal study progression. For double degree and exchange students, please note that equivalent courses are accepted.
| Assessments |
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Exam category: Submission Form of assessment: Written submission Weight: 10 Grouping: Group (1 - 5) Duration: 2 Week(s) Comment: Case 1 Exam code: GRA65461 Grading scale: Point scale leading to ECTS letter grade Resit: All components must, as a main rule, be retaken during next scheduled course |
Exam category: Submission Form of assessment: Written submission Weight: 10 Grouping: Group (1 - 5) Duration: 2 Week(s) Comment: Case 2 Exam code: GRA65461 Grading scale: Point scale leading to ECTS letter grade Resit: All components must, as a main rule, be retaken during next scheduled course |
Exam category: Submission Form of assessment: Written submission Weight: 10 Grouping: Group (1 - 5) Duration: 2 Week(s) Comment: Essay Exam code: GRA65461 Grading scale: Point scale leading to ECTS letter grade Resit: All components must, as a main rule, be retaken during next scheduled course |
Exam category: Submission Form of assessment: Written submission Weight: 10 Grouping: Group (1 - 5) Duration: 2 Week(s) Comment: Case 3 Exam code: GRA65461 Grading scale: Point scale leading to ECTS letter grade Resit: All components must, as a main rule, be retaken during next scheduled course |
Exam category: Submission Form of assessment: Written submission Invigilation Weight: 60 Grouping: Individual Support materials:
Duration: 3 Hour(s) Comment: Written examination under supervision. Exam code: GRA65461 Grading scale: Point scale leading to ECTS letter grade Resit: All components must, as a main rule, be retaken during next scheduled course |
A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 6 ECTS credits corresponds to a workload of at least 160 hours.