2024 – Topic The European sovereign debt crisis was a major focus for international financial markets during 2010 2015 Economies
International Financial Market – 2024
2024 – Topic The European sovereign debt crisis was a major focus for international financial markets during 2010 2015 Economies.
Topic:
The European sovereign debt crisis was a major focus for international financial markets during 2010-2015. Economies fell into recession and financial market volatility was high. Critically analyse how the government debt problems initially faced by a few relatively small economies could trigger such a wide impact in financial markets. Your essay must be strongly focused on the impact on financial markets, not on other aspects of the European sovereign debt crisis, (i.e. there should be no discussion of banks, politics or macroeconomics). You can consider the impact of the crisis on any one or two of the following: equity markets, bond markets, money markets, derivatives markets and foreign exchange. Contagion (or spillover) across markets is an important theme to be included. The essay must include some theoretical content as well as practical considerations. You must demonstrate reading and research far beyond the material discussed in lectures. A minimum of ten references from academic journals is expected. Your essay will benefit significantly from the inclusion of insights from academic and practitioner research. Support your arguments with exampleswhen appropriate. You should ensure careful citation of all paper and electronic sources of information, and include a list of references. (The references are not included in the word count).
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Student questions
In response to some student questions:
The focus should be on contagion/spillover and the channels through which such effects operate.
Recent journal articles
Your initial objective should be to collect a group of recent journal articles that provide evidence on these spillovers in financial markets.
It is not true to state that sovereign rating actions started the crisis. Have a careful look at what happened in Greece in late 2009, and you will come to a different view.
The essay is not directly concerned with sovereign rating actions. They are relevant, but should not be the only focus.
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These are the key steps in addressing the question:
The crisis started in small countries (Greece, Portugal, Ireland) which had to receive bailout funds in 2010-11. Your essay can begin with a very short discussion of this background.
The main question is: why did this crisis become a Europe-wide and global financial market problem rather than only affecting those small countries’ financial markets?
What is the process of contagion / spillover / transmission of the crisis across different countries’ financial markets?
To answer these questions satisfactorily, you need to review relevant academic research articles (at least 10 of these). You should study the articles’ research questions, literature reviews and findings, but the articles’ methodological approach is not a central aspect of my expectations for this particular assignment.
Based on this, you should structure the essay as a literature review based on this reading from journals (i.e. present their findings in relation to contagion across the financial markets you have chosen).
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Please all information has to be latest articles and must provide graphs, histograms, and charts and all calculations must be included as well as all data and formulas (in appendix).
Word limit: 2,000 words +/- 10% (approximately 6 pages A4 1.5 spacing).
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And this is an example of a previous work which I would like to be better than it and change the style for Figure 3. Cross-Border Exposures: Greece’s Interconnections
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