Seminar requirements

Write a paper of 20 (25) pages as a team of two (three) or 12 pages if you are working alone. Papers can be written in either German or English. The seminar talks should be given in English. As a team of three (two) you will have to present around 60 (45) minutes and if you work alone, it will be 30 minutes.

To register for the seminar, please come on Wednesday, 4th Feb. 2009, 6 p.m. to Helmholtzstrasse 18, Room 120. If you have questions about the seminar, contact Thomas Verchow.

Organisational matters

• Registration? Wednesday, 4th Feb. 2009, 6pm at Helmholtzstrasse 18, Room 120
• Where? Kahlrückenalpe, Sigiswang, Allgäu, Germany, Destination on Google maps
• When? 29th June to 1st July 2009
• What to hand in? Please hand in or send your final version of the paper to your supervisor.
• Submission of papers? Friday, 19th June 2009
• Hints for seminar work? Have a look at Guidelines.

Topics

Note that you should consider not just your intro-paper but also additional literature for writing the seminar paper!

1. What can we learn from the great depression?

   Summarize the aspects of the great depression that are most relevant for understanding the current crisis. Then discuss which lessons should be drawn from the great depression and the way it was handled.
   
   Intro-paper:
   Galbraith, J.K., 1997, The great crash
   Wheelock, D.C. (2008): Government Response to Home Mortgage Distress: Lessons from the Great Depression
   
   Supervisor: Prof. G. Löffler
   Student: Jiang Shuang, Han Bao, Nataliya Khovayeva

2. What can we learn from the banking crises of the 1980s and 1990s?

   Summarize the aspects of the banking crises that are most relevant for understanding the current crisis. Then discuss which lessons should be drawn from those crises and the way they were handled.
   We suggest that you focus on either Asia or Scandinavia.
   
   Intro-paper:
   Laeven, L., Valencia, F. (2008): Systemic Banking Crises: A New Database
   
   Supervisor: Prof. G. Löffler
   Student team Scandinavia: Michael Fischer, Veselin Poryazov Student team Asia: Xiaocao Zhang, Ying Zhang

3. Securitization

   Describe the mechanics of securitization. Show how securitization lowered the stability of the financial system.
   
   Intro-paper:
   Gorton, Gary B. (2008): The Subprime Panic
   L. Randall Wray (2007): Lessons from the Subprime Meltdown
   
   Supervisor: Alina Maurer
   Student: Christian Heber, Manuel Gröger, Jiaming Xue

4. Lending standards during the recent house price boom

   Review literature on how lending standards change within a boom. Also discuss whether securitization lead to changes in lending standards.
   
   Intro-paper:
   Laeven, L., Igan, D., Dell'Ariccia, G. (2008): Credit Booms and Lending Standards: Evidence from the Subprime Mortgage Market
   
   Supervisor: Thomas Verchow
   Student: Gongchen Wang, Dominik Pecha, Fang Yang

5. Why did market participants not anticipate the trouble?

   Explore what market participants knew about the risks of mortgage lending.
   
   Intro-paper:
   Gerardi, K., et. al (2008): Making Senss of the Subprime Crisis
   
   Supervisor: Alina Maurer
   Student: Kristin Mühlhäuser, Johannes Güls

6. What went wrong inside firms?

   Conduct case studies of financial institutions in order to learn how risks were (mis)managed before the crisis.
   You can, for example, consider Fannie Mae or UBS.
   
   Intro-Material:
   Committee Holds Hearing on Collapse of Fannie Mae and Freddie Mac
   Shareholder Report on UBS's Write-Downs
   
   Supervisor: Alina Maurer
   Student: Tobias Andreae, Robert Ehrmann, Christian Grösser

7. Bank regulation

   Summarize the literature on the effectiveness of bank regulation and supervision. Discuss proposals for changes in the regulatory framework.
   
   Intro-paper:
   Barth, Caprio, Levine (2001): Bank regulation and supervision: what works best?
   
   Supervisor: Jürgen Bohrmann
   Student: Yimin Hua, Guo Lin, Fan Shiyuan

8. Bubbles and Experience

   Review literature on whether people who have not experienced a bubble before are more likely to buy overvalued assets during a bubble.
   
   Intro-paper:
   Greenwood, Nagel (2008): Inexperienced Investors and Bubbles
   
   Supervisor: Jürgen Bohrmann
   Student: Roman Scholze, Anfisa Lening, Markus Rauscher

9. Costs and benefits of financial liberalization

   Does financial liberalization increase the instability of the financial system? Review empirical evidence that helps to answer the question.
   
   Intro-paper:
   Kaminsky, G., Schmukler, S.L. (2007): Short-Run Pain, Long-Run Gain: The Effects of Financial Liberalization
   
   Supervisor: Thomas Verchow
   Student: Martina Ruhl, Plähn Sönke, Philipp Flottmeier

10. Too big to fail - Should big non-financial companies be protected, too?

    Discuss why banks deserve more help than non-financial companies. Review empirical evidence that helps to answer the question.
    
    Intro-paper:
    Fogel K., Morck R., Yeung B. (2006): Big business stability and economic growth: Is what's good for General Motors good for America?
    
    Supervisor: Thomas Verchow
    Student: Alexey Indiryakov, Anna Ivanova

11. Risk premiums in financial crisis - proxy or forecast

    tba.
    
    Intro-paper: tba.
    
    Supervisor: Jürgen Bohrmann
    Student: Patrick Eustermann, Maria Ickes