Asian Financial Markets
Instructors
Credits / Language / Semester
2Credits / English / Winter
Objectives/Overview
Objective: The objective of this course is to give students basic understanding of Asian Financial Markets: its developments in the last 20 years; competition among the international financial centers (Singapore, Hong Kong, Tokyo, Shanghai), monetary and financial policy of major countries.
Schedule
Session 1 (Oct. 11): Introduction: Geography, History, Institutions, Macroeconomics and Markets
Class will not meet on Oct 18, but it will be made up later.
Session 2 (Oct 25): Asian Financial Crisis of 1997-98 (I) causes and consequences;
Session 3 (Nov 1): Asian Financial Crisis of 1997-98 (II) the Role of IMF
There will be a make-up class on Nov 8, the first period (8:30-10:20)
Session 4 (Nov 8, Part 1): “Foreign Reserves, Exchange Rate Regimes and Capital Controls”
Session 5 (Nov 8, part 2): Lessons and Prevention of the future crisis
Session 6 (Nov15): Midterm Exam and Introduction to Monetary Policy
(A) *** Mid-term Exam ***
Session 7 (Nov 22) Post-Asian crisis Monetary and Exchange Rate Policy in Asia
Session 8 (Nov 29) : Major Financial Markets and Financial Centers in Asia
Session 9 (Dec 6): Financial Market Integration and Cooperation in Asia
Session 10 (Dec 13): Current Global Financial Crisis and Asia
Session 11 (Dec 20): Demography, Fiscal Prudence, and Sovereign Wealth Fund
Session 12 (Jan 10): Key currency and Global Financial Crisis of 2008-09, and future
Session 13 (Jan 17): Review
Session 14 (Jan 24): Final Exam
Teaching Methods
Topics: Japanese and Asian financial markets went through fundamental changes in the last fifteen years. Also, the weight of China in the world economy has increased, with many important implications to the Asian financial markets. The Japanese banking crisis and the Asian financial crisis in 1997-98 were instrumental in causing radical changes. Japan created an integrated supervision agency, FSA, in 1998 to enhance the regulatory framework. An enhanced regulatory power to temporarily nationalize weak banks was successful in resolving the banking crisis by 2003. Japanese markets were still large and the yen was the most widely used Asian currency in the world.
Since the Asian crisis was such a huge event that changed the course of the Asian financial markets and policies, the first five sessions will be dedicated to analysis of the crisis. It is so timely to look back to the experiences, now that we have similar but different kinds of crises occurred in the US and Europe in 2007-2011.
The weight of the Chinese financial institutions and markets has increased globally. Now, the three largest banks in the world are all Chinese. The capitalizations of large Chinese companies are greater than their Western counterparts. Some political and economic forces behind these advances will be examined.
Financial developments and financial supervision in Asian countries other than Japan and China will be documented and analyzed, asking the question of whether they are more resilient to external shocks now than before. Factors that explain why Asian countries are not affected adversely as much as Central European countries in 2010-11 will be explained.
Grading
Class participation—attendance and Q&A presentation, and debate (30%), Midterm Exam (30%), and Term Paper (40%)
Required Text
No textbook; but readings will be assigned at the beginning of the course.
Prerequisite: (Intermediate) Macroeconomics and Microeconomics
Readings will be assigned for each topic. Students are expected to read those readings prior to the lecture and participate in the class discussion.
Class materials and announcements will be posted at Professor’s homepage, which will be announced in the first few lectures.