International

Finance (MN2114)
Assignment 2015
The module is assessed on the basis of an individual essay.
There is a 2,000 word limit.
The deadline for submission is mid-day Tuesday 5th May (Start of week 23)
You must chose and answer ONE out of the following THREE essay topics:
Question 1
Describe the origins and evolution of the Eurocurrency markets and the key financing
instruments they provide for firms and organisations operating internationally.
Why did these markets grow so fast and what are the advantages of raising finance through
them for international businesses and organisations?
Further Readings
Norman, P. (2007), Plumbers and visionaries: securities settlement and Europe's financial
markets, John Wiley & Sons, Chichester, England ; Hoboken, NJ Chapters 2-4 (pp. 17-59)
Donald MacKenzie, Whats in a number? The importance of LIBOR, real-world
economics review, issue no. 47, 3 October 2008, pp 237-242
http://www.paecon.net/PAEReview/issue47/MacKenzie47.pdf
McKinnon, R. I., McKinnon, R. I., McKinnon, R. I., & McKinnon, R. I. (1977). The
eurocurrency market. International Finance Section, Department of Economics, Princeton
University
Genillard, R. L. (1967). The Eurobond Market. Financial Analysts Journal, 23(2), 144-151.
Question 2
In July 2014, the BRICS (Brazil, Russia, India, China, and South Africa) announced an
agreement to establish a development bank. The initiative is referred to in the Financial
Times article below describing the launch of this initiative as an attempt to conjure a miniWorld Bank and a mini-International Monetary Fund.
Discuss the similarities and differences between the IMF and World Bank and the institutions
proposed in the BRICS initiative.
Can the so-called BRICS Bank become a credible developing economy alternative to the
existing international monetary system?
1

Further Readings
The Brics bank is a glimpse of the future - http://www.ft.com/cms/s/0/f7b876a0-170e-11e4b0d7-00144feabdc0.html#axzz3LzT9wTcT
Brics bank ought to be welcomed by poorer countries - http://www.ft.com/cms/s/0/ee7ab07e1bfc-11e4-9db1-00144feabdc0.html?siteedition=uk#axzz39gZrgiQ9
D'Arista, J. (2008). "Replacing the failed Washington consensus." Journal of Post Keynesian
Economics 30(4): 523-540.
Mateos y Lago, I., R. Duttagupta and R. Goyal (2009). The debate on the international
monetary system, International Monetary Fund.
Schwartz, A. J. (2000). "Do we need a new Bretton Woods" Cato J. 20: 21.
Question 3
On December 1st 2001, with the country facing increasing economic and social instability, the
government of Argentina decided to close the countrys banks, leading to almost total
economic, social, and political collapse in the months that followed.
Starting from the article by Feldstein below describing the crisis, analyse the Argentinian
crisis and its roots in the fixing of the exchange rate of the Argentinian Peso to the US dollar
through the perspective of the trilemma proposed by Obstfeld and Taylor (2004).
To what extent is the trilemma a useful analytic tool?
Further Readings
Martin Feldstein, 2002. Argentinas Fall: Lessons from the Latest Financial Crisis. Foreign
Affairs, 81(2), pp.814. Available at: http://www.jstor.org/stable/20033080.
Maurice Obstfeld, Jay C. Shambaugh and Alan M. Taylor, 2005. The Trilemma in History:
Tradeoffs among Exchange Rates, Monetary Policies, and Capital Mobility. The Review of
Economics
and
Statistics,
87(3),
pp.423438.
Available
at:
http://www.jstor.org.ezproxy3.lib.le.ac.uk/stable/40042939

GUIDELINES FOR WRITING YOUR ESSAY

You are expected to demonstrate evidence of reading beyond standard textbooks and lecture
notes
The further readings are just the starting point for your assignment
Criteria for a good essay:

A solid reference list based on reliable sources

Good understanding of key concepts and ideas
Some imagination and originality
Inclusion of data and graphs
Development of argument so that the whole essay hangs together
Inclusion of examples, illustrations
Substantiated conclusions