CCGL9030 Global Issues

Understanding the Financial Crisis

[This course is under the thematic cluster of ‘Sustaining Cities, Cultures, and the Earth’.]


Course Description

As a subprime mortgage crisis that started in America in 2008, the crisis speedily mutated into a “systemic risk” threatening the financial system of every advanced and emerging economy. The financial contagion quickly exacerbated the impact of the crisis by transmitting the financial shocks through the interlinked financial markets to the whole global economy.

Sooner than expected, millions of people in America, Europe and even China lost their jobs and fell into poverty. Almost overnight the entire investment banking industry worldwide was wiped out. The crisis that started out in America has turned into the worst global economic crisis since the Great Depression.

Understanding the Financial Crisis aims to bring to students an exploratory account of the crisis and an understanding of the conceptual underpinnings of the issues that lie at the heart of it. The course will focus on how the current financial crisis began, how it developed, how the different countries dealt with it with their own politico-economic means and measures, what are the effects on people, and what is its implication for the global economy, and its broader ramifications for our society.

Course Learning Outcomes

On completing the course, students will be able to:

  1. Describe the socio-economic background and the possible causes for the financial crisis and explain how the crisis through the different financial and economic channels can reinforce itself and affect other economies in the world.
  2. Formulate critical questions and reflections regarding issues of economic development against an understanding that very often our efforts to respond to one problem might lay the foundations for the next.
  3. Critically evaluate the effectiveness of the various government policies for the rescue of the faltering economy and assess how these policies in one country can impact others in the global economy.
  4. Demonstrate understanding that the elimination of crises, if possible at all, is very costly and hence why crises will almost certainly recur.
  5. Assess how the current crisis will form and shape the future path of growth and development for the global economy.

Offer Semester and Day of Teaching

First semester (Wed)


Study Load

Activities Number of hours
Lectures 24
Tutorials 12
Reading / Self-study 50
Video viewing 10
Assessment: Individual report on group project 10
Assessment: Group presentation of group project 20
Assessment: Case summaries and homework 20
Assessment: Take-home test 4
Total: 150

Assessment: 100% coursework

Assessment Tasks Weighting
Class participation and tutorial discussions 10
Homework and case summaries 30
Group project and presentation 20
Group project report 10
Take-home test 30

Required Reading

The following cases and reading materials will be assigned. The list will be updated as deemed appropriate.

  • Alfaro, L., & White, H. (2013). Currency wars. Harvard Business School.
  • Coval, J., Jurek, J., & Stafford, E. (2009). The economics of structured finance. Journal of Economic Perspectives, 23(Winter), 3-25.
  • Greenspan, A. (2010, Spring). The crisis. Brookings Papers on Economic Activity.
  • Mathis, J., Tuzzolino, F., & Ramaswamy, V. (2011). Global financial crises and the future of securitization. Harvard Business School Case.
  • Mishkin, F. S. (2009). Is monetary policy effective during financial crises?. American Economic Review Papers and Proceedings, 99(2), 573-577.
  • Moss, D., & Bolton, C. (2011). Fighting a dangerous financial fire: The federal response to the crisis of 2007-2009. Harvard Business School Case.
  • Pill, H., Tella, R. D., & Schlefer, J. (2008). Financial crisis in Asia: 1997-1998. Harvard Business School Case.
  • Roscini, D., Schlefer, J., & Dimitriou, K. (2011). The Greek crisis: Tragedy or opportunity. Harvard Business School Case.
  • Rotembery, J. J. (2008). Subprime meltdown: American housing and global financial turmoil. Harvard Business School Case.
  • Segel, A. I., & Creo, B. (2010). Understanding the credit crisis of 2007-2008. Harvard Business School Background Note.

Recommended Reading

  • Bardhan, A. (2008). Of subprimes and subsidies: The political economy of the financial crisis. Social Science Research Network. From http://ssrn.com/abstract=1270196
  • Blinder, A. S., Lo, A. W., & Solow, R. M. (2012). Rethinking the financial crisis. Russell Sage Foundation.
  • International Monetary Fund, Washington, DC. (2011, September). Global financial stability report: Grappling with crisis legacies.

Recommended Website


Course Co-ordinator and Teacher(s)

Course Co-ordinator Contact
Dr K.S. Tse
School of Economics and Finance, Faculty of Business and Economics
Tel: 2857 8636
Email: ktse@hku.hk
Teacher(s) Contact
Dr K.S. Tse
School of Economics and Finance, Faculty of Business and Economics
Tel: 2857 8636
Email: ktse@hku.hk