International Currency and Financial Relationships

Bachelor 2021/2022

Type: Compulsory course (World Economy)

Area of studies: Economics

Delivered by: School of World Economy

Where: Faculty of World Economy and International Affairs

When: 2 year, 3 module

Mode of studies: offline

Open to: students of all HSE University campuses

Instructors: Ksenia Bondarenko, Eduard P. Dzhagityan, Oscar Mukhametov, Mikhail Orekhov

Language: English

ECTS credits: 3

Contact hours: 56

Full Syllabus Ask Question

Abstract

This Program aims at holistic understanding and fact-based view by the students of the principles, logics, consistency, dynamics, and perspectives of the international currency and financial relationships (ICFR) together with the role of the ICFR and their institutional framework in shaping the processes of financial globalization at the national, regional, and international levels. The Program delves into the evolution and specifics of the macrofinance policy and how it is tailored and managed amid imperfection and asymmetries of international financial markets. The Program also looks into the extent to which the ICFR promotes financial stability. Students will acquire knowledge about the key characteristics and mechanisms of the ICFR of Russia. The Program will equip students with broad-based outlook for the functional specifics of international finance, trade finance, and credit; international financial institutions/organizations; international capital flow; and the weaknesses and risks of the post-crisis recovery in the area of international finance. Students will expand their awareness of the latest developments in financial globalization and will be able to grasp the insights of the policy-making events and issues associated with the ICFR.

Learning Objectives

To develop students’ skills and expertise necessary for holistic and unbiased understanding of economic principles, framework, processes, and perspectives associated with the ICFR, including institutional aspect, and the interrelationship between the ICFR’s structural elements at different economic hierarchies, including those applicable to the context of financial stability.
To make students understand the economic background, rationale, driving forces, evolution, and the post-crisis issues of the ICFR, as well as the role and criticality of the ICFR in the processes of financial globalization and regionalization through the prism of the specifics of macro-financial policy, imbalances of global financial markets, and asymmetries of the global financial markets that affect the financial markets participants.
To equip students with understanding of the complex mechanisms and patterns of the ICFR in different phases of the business, financial, and economic cycles; of the specifics of the relationship and interdependence of the ICFR with other segments of macro-financial management and, as such, to expand their understanding of the processes in the global financial environment and how they are affected by international financial intermediation.

Expected Learning Outcomes

acquire a hands-on approach in identification of the various types of risks associated with the ICFR. They should understand the extent to which risk transmission affects international financial markets and financial stability, and risks in the ICFR could be mitigated.
be able to analyze the specifics of the foreign exchange position of the bank and how it affects its stress resilience, how the instruments of international capital markets are used, and how the national credit and eurocredit markets work.
be able to differentiate among various categories of world currencies; understand how the exchange rate is settled; and what is the specifics of the monetary policy trilemma.
know the specifics of the balance of payments’ structure, the purpose of its accounts, and how they are offset in case of the positive or negative balance.
recognize the main differences between international credit and international project finance. They should understand why international leasing is required and be able to make the difference between international factoring and international forfeiting.
understand core principles, issues, and challenges of the contemporary international currency and financial relationships (ICFR); risks of financial globalization and regionalization, as well as how the ICFR are affected by crises.
understand differences among the main forms of the trade finance instruments and when they are used, as well as the risks associated with international trade finance transactions.
understand factors underlying the institution and operationalization of the international financial institutions, their core functions, and differentiate between global and regional financial institutions.
understand how Russia affects the ICFR by means of the participation in the international financial markets, what is the specifics of the Russian balance of payments, and how the exchange rate of the Russian ruble affects the exchange rate policy of the Central Bank of the Russian Federation.

Course Contents

International currency and financial relationships, and financial globalization
International monetary system, policy, and regulation
Balance of payments
International trade finance
International credit
International foreign exchange, credit, and securities markets
Risks in international currency and financial relationships
Institutional framework of international currency and financial relationships
International currency and financial relationships of Russia

Assessment Elements

Seminars
Control work 1 (CW-1)
The control work (CW-1) is based on the Socrative platform (https://www.socrative.com/). Students must be online 15 minutes before the CW-1 starts. The student’s computer must meet the following requirements: https://elearning.hse.ru/data/2020/05/07/1544135594/Технические%20требования%20к%20ПК%20студента.pdf) To participate in the CW-1, the student should conduct a system test. During the control work students are prohibited from any form of communication (by using social networks or with somebody else in the room). In case the student was unable to pass the CW-1 during the scheduled time due to interruption in internet connection, they CANNOT retake the CW-1.
Control work 2 (CW-2)
The control work (CW-2) is based on the Socrative platform (https://www.socrative.com/). Students must be online 15 minutes before the CW-2 starts. The student’s computer must meet the following requirements: https://elearning.hse.ru/data/2020/05/07/1544135594/Технические%20требования%20к%20ПК%20студента.pdf) To participate in the CW-2, the student should conduct a system test. During the control work students are prohibited from any form of communication (by using social networks or with somebody else in the room). In case the student was unable to pass the CW-2 during the scheduled time due to interruption in internet connection, they CANNOT retake the CW-2.
Essay
In case the student fails to submit an essay within the period stipulated by the Program, the student receives “0” (fail) grade for the essay, and the final grade (GF) is re-calculated based on the following formula: GF = 0,24*GS + 0,14*GCW1 + 0,24*GCW2 + 0,29*GE + 0,09*GA where GS is the grade for the seminars, GCW1 and GCW2 are the grades for the control work 1 (CW-1) and control work 2 (CW-2) accordingly, GE is the grade for the essay, and GA is the grade for class attendance. At the same time, the grades for each element of the final grade are re-calculated and rounded to the nearest smallest whole number, regardless of the decimal digit. The final grade for the ICFR discipline is rounded in the same way. For example, a grade of 7.9 is rounded to 7. For students who submitted the essay within the period stipulated by the Program, the grades are not rounded and are expressed as a whole number with one decimal sign.
Class attendance
Exam (for students received grades 0-3 for the Program)
This is an oral exam based on the Webinar platform (https://webinar.ru/). Students must be online 15 minutes before the exam starts. The student’s computer must meet the following requirements: https://elearning.hse.ru/data/2020/05/07/1544135594/Технические%20требования%20к%20ПК%20студента.pdf) To participate in the exam, the student should conduct a system test, turn on the camera and microphone, and confirm his/her identity. During the exam students are prohibited from any form of communication (by using social networks or with somebody else in the room), cheating, and using the internet. During the exam students are allowed to use calculator. An up to 1 (one) minute interruption in communication is considered as a short-term following which students may continue the exam. Interruption in communication of 1 (one) minute and more is considered as a long-term, following which students cannot continue their participation in the exam. Retaking the exam is similar to the exam as above.
Optional Exam (for students wishing to improve their final grades)
This is an oral exam based on the Webinar platform (https://webinar.ru/). Students must be online 15 minutes before the exam starts. The student’s computer must meet the following requirements: https://elearning.hse.ru/data/2020/05/07/1544135594/Технические%20требования%20к%20ПК%20студента.pdf) To participate in the exam, the student should conduct a system test, turn on the camera and microphone, and confirm his/her identity. During the exam students are prohibited from any form of communication (by using social networks or with somebody else in the room), cheating, and using the internet. During the exam students are allowed to use calculator. An up to 1 (one) minute interruption in communication is considered as a short-term following which students may continue the exam. Interruption in communication of 1 (one) minute and more is considered as a long-term, following which students cannot continue their participation in the exam. Retaking the exam is similar to the exam as above.

Interim Assessment

2021/2022 3rd module
0.15 * Control work 1 (CW-1) + 0.25 * Seminars + 0.1 * Class attendance + 0.25 * Essay + 0.25 * Control work 2 (CW-2)

Bibliography

Recommended Core Bibliography

Bank Guarantees in International Trade : The Law and Practice of Independent (First Demand) Guarantees and Standby Letters of Credit in Civil Law and Common Law Jurisdictions, Bertrams, R.I.V.F., 1998
Banking crises, liquidity, and credit lines : a macroeconomic perspective, Singh, G., 2014
Banking strategy, credit appraisal, and lending decisions : a risk-return framework, Bhattacharya, H., 2011
Barry J. Eichengreen, Balazs Csonto, Asmaa A ElGanainy, & Zsoka Koczan. (2021). Financial Globalization and Inequality: Capital Flows as a Two-Edged Sword. IMF Working Papers.
Cash and credit, Barker, D. A., 2011
CIURLĂU, F. C. (2018). Financial Globalization and Economic Dynamics. Economics, Management & Financial Markets, 13(3), 340–350. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=bsu&AN=132128343
Counterparty credit risk and credit value adjustment : a continuing challenge for global financial markets, Gregory, J., 2012
Credit risk management : basic concepts: financial risk components, rating analysis, models, economic and regulatory capital, Gestel van, T., 2009
Credit risk measurement in and out of the financial crisis : new approaches to value at risk and other paradigms, Saunders, A., 2010
Currency convertibility : the gold standard and beyond, , 2011
Cyclical movements in the balance of payments, Chang, T. C., 2011
Derivatives demystified : a step-by-step guide to forwards, futures swaps and options, Chisholm, A. M., 2010
Dictionary of international trade finance : terms, Hammett, M., 2001
Diehl, E., Clift, J., & International Monetary Fund. (2007). Financial Globalization : A Compilation of Articles From Finance & Development. Washington, D.C.: International Monetary Fund. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=449549
Dora Hancock. (2017). International Finance : For Non-Financial Managers (Vol. 1st). Kogan Page.
Exchange rates, capital flows and policy, , 2012
Felix I. Lessambo. (2021). International Finance : New Players and Global Markets. Palgrave Macmillan.
Financial derivatives : futures, forwards, swaps, options, corporate securities, and credit default swaps, Constantinides, G. M., 2015
Financial globalization : growth, integration, innovation and crisis, Das, D. K., 2010
Financial globalization and economic performance, , 2011
Financial globalization and the emerging market economies, Das, D. K., 2012
Forecasting and hedging in the foreign exchange markets, Ullrich, C., 2009
Grahame Thompson. (2019). Financial globalization? History, conditions and prospects. Chapters, 32. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.h.elg.eechap.18293.2
International finance : global edition, Eun, C. S., 2012
International finance and open-economy macroeconomics : theory, history, and policy, Van den Berg, H., 2016
International project finance : law and practice, , 2015
Letters of credit and demand guarantees : defences to payment, Horowitz, D., 2010
Letters of credit, Champion, S. R., 2017
Models of balance of payments constrained growth : history, theory and empirical evidence, , 2012
Money, currency and crisis : in search of trust, 2000 bc to ad 2000, , 2018
Notes on options trading, Volkov, D., 2016
One currency, two Europes, Dallago, B., 2016
Owning development : creating policy norms in the IMF and the World Bank, , 2010
Reform of the international monetary system : Why and how?, Taylor, J. B., 2019
Reforming the World Bank : twenty years of trial - and error, Phillips, D. A., 2011
Sovereign risk analysis, Heffernan, S. A., 2012
Stanley, L. (2018). Emerging market economies and financial globalization: Argentina, Brazil, China, India and South Korea. Germany, Europe: London: Anthem Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsbas&AN=edsbas.B6B463E6
Structured credit products : credit derivatives & synthetic securitisation, Choudhry, M., 2010
Studies in foreign exchange economics, Evans, M. D. D., 2017
Successes of the International Monetary Fund : untold stories of cooperation at work, , 2009
Systemic risk : the dynamics of modern financial systems, Gai, P., 2013
The IMF and European economies : crisis and conditionality, Rogers, C., 2012
The IMF and global financial crises : Phoenix rising?, Joyce, J. P., 2013
The Russian Financial Crisis: Why was the Rouble Devaluation accompanied by Sovereign Debt Default?, Shpringel, V.K., 2005
Understanding letter of credit : learner's guide to letter of credit, Koshal, N. S., 2017

Recommended Additional Bibliography

Balance of payments and exchange rate theories, Miller, N. C., 2002
Looking back at Russian financial crisis : Препринт (Working paper) #2001/029, Gurvich, E., 2001
Russian banking : evolution, problems and prospects, , 2002
United Kingdom balance of payments : the pink book, , 2008

Authors

DZHAGITYAN EDUARD PAVLOVICH

Course Syllabus