Course Syllabus

MGT 890, ECON 363a, LAW 20515: The Global Financial Crisis

Fall  2015. Wednesdays, 2:40 – 5:30 pm, Evans Hall: Room 2400


The Honorable Timothy F. Geithner   Professor Andrew Metrick                                                                                                                             

(203) 432-3069                                                                            

165 Whitney Ave, Room 4522


Course Assistant: Ashley Garand,, 203-432-2781

TAs: Christian McNamara, Roz Wiggins, June Rhee.

TA Office Hours: By appointment. Email

Course Description

This course surveys the causes, events, policy responses, and aftermath of the recent global financial crisis. The main goal is to provide a comprehensive view of this major economic event within a framework that explains the dynamics of financial crises in a modern economy. 

The instructors aim to maximize the value of in-class time. To this end, students will be expected to watch the video of course lectures in advance, with class time reserved for discussions, cases, group presentations, and a crisis simulation. All students will be expected to contribute to class discussions both online and in-person. Secretary Geithner will lead the discussions and participate in breakout sessions on 10/7, 11/18, and 12/2. Professor Metrick will lead the discussions on other days, and will be in all classes and cycle through all breakout sessions.

The required book for the course is Stress Test, by Timothy F. Geithner (Crown, 2014), which is available at most bookstores or from Amazon. Other recommended reading is given below on the syllabus and will be available on the course's Canvas website.

Online Platforms

Canvas (

We will use the Canvas platform to host important course information, including the lecture videos, quizzes, and readings. An updated syllabus will be available on the Canvas platform. Students will submit their assignments via Canvas, as well.

Discussion Board (

The discussion board will host threads for each video and case we cover in class. Students will use this platform to post questions and comments about course material, and will be used to determine the community contribution portion of a student’s grade (see grading details below).


Your grade will be based on the following five categories:

  1. Quizzes (20%): The class lectures are available on the Canvas platform. Each lecture is broken up into individual “lessons” that are a few minutes long. For each lesson there are a few ungraded multiple-choice questions, and after each full lecture there are eight quiz questions. These questions are straightforward and are just intended to make sure students have absorbed key facts and concepts in advance of the classroom discussion. Quizzes must be taken by 11:59 the day before class. For each student, we will drop your lowest two quiz grades before computing your quiz average.
  2. Community Contribution (20%): Prior to each class, beginning in the second week of class, students are expected to submit at least 1 question or comment to the online board for each video lecture and case study we cover. (There are a total 12 video lectures and 10 case studies that will require comment. Students will be allowed to skip commenting on four of these 22 without any penalty.) The online submissions can be about the lectures, the readings, or any other topic related to that day’s class material. The instructors will use these online discussions as the basis for the class discussions.

    For full credit on this grade component, 200 points are required – students earn 1 point for each post or comment on the online board. Points are accrued based on the number of up-votes less down-votes on each submission. For example, a question with 10 up-votes and 2 down-votes will earn 1 point for posting, and then the net of the votes (8), for a total of 9. How can you excel at this? Ask good questions, give thoughtful answers to other students’ questions, and do not waste our collective time with comments just to fill space. Discussion threads for each class will close at 11:59 P.M the day before class.

    Note that we will not be evaluating in-class comments as part of this grade. Nevertheless, please come to class prepared to speak and to keep the collective conversation going. If things are slow, the faculty will gleefully cold call.

  3. Case Presentation (20%): For five of the class meetings, we will break out into sections in the second half of class for student-led case discussions, with participation by teaching assistants (one per room) and faculty (roving). These cases consider various aspects of the Lehman bankruptcy and aftermath, the crisis in Europe, and the new banking regulations of the Basel committee. Each student will be a member of a three to five-person team assigned to present and lead the discussion on one of these cases, with the grade based on the effectiveness of this presentation.

  4. Crisis Simulation and Memo (20%): On September 30, we will use the second half of class for a simulation of the business and policy challenges in the weekend before the Lehman bankruptcy in September 2008. Student teams will be assigned to different roles, will prepare a strategy, negotiate with other teams, and then submit a memo on their strategy and outcomes. In the second half of class on October 7, Secretary Geithner and Professor Metrick will discuss the memos and outcomes in breakout groups.

  5. Final Paper (20%): The final paper will be an analysis of specific policy decisions made during the financial crisis. Length will be limited to eight pages. A complete list of topics, along with additional references that can supplement the class readings, is available here

Integrity and responsibility

Integrity and responsibility are bound closely to the values we hold important in the SOM community. We aspire to hold ourselves to the highest levels of honesty in all interactions, including academic, personal, and professional behavior (see the SOM Honor Code for more details). Lack of integrity and responsibility, especially improper collaboration, is viewed very seriously and has led to expulsion in the past. The guidelines offered below address some key aspects. Please contact the professor or TAs if you have doubts or concerns.

All assignments in this course must be your own work (for individual assignments) or the collective work of your group (for group assignments). You can ask other students (and certainly ask TAs and faculty) to help you understand the assignment, but not to so much that we are answering the questions for you.

Technology Policy

Please only use your laptops/tablets/phones for taking notes or looking at course materials. All community members should feel empowered to ask anyone to cease and desist any other tech activity.

Class Schedule

Time Slots: I = 2:40 – 3:50; II = 4:00 – 5:30
All locations are Evans 2400 unless otherwise noted


Class 1: Introduction to the Global Financial Crisis (September 2)

Coursera Module 1

I: Course Organization and Overview

II: Class discussion of modules and readings

Suggested Readings:

  1. Stress Test, Introduction + Chapters One and Two
  2. Bernanke, Ben, 2010, Testimony to the Financial Crisis Inquiry Commission.
  3. Gorton, Gary B. and Andrew Metrick, 2012, Getting up to speed on the financial crisis: a one-weekend-reader’s guide, Journal of Economic Literature 2012, 50:1, 128–150
  4. Schularick, Moritz and Alan M. Taylor 2012, Credit Booms Hone Bust: Monetary Policy, Leverage Cycles and Financial Crises, 1870-2008, American Economic Review 102, 1029-1061.


Class 2: Safe Assets and the Global Savings Glut (September 9)

Coursera Modules 3 and 4

I) Class discussion of modules and readings

II) Case Session (in breakout classrooms for instructor-led discussions):

Suggested Readings:

  1. Stress Test, Chapter Three
  2. Jobst, Andreas, 2008, Back to Basics-What is Securitization? Finance & Development 45, 48.
  3. Pozsar, Zoltan. 2011, Institutional Cash Pools and the Triffin Dilemma of the U.S. Banking System, International Monetary Fund Working Paper 11/190.
  4. Bernanke, B., C. Bertaut, L. DeMarco, and S. Kamin, 2011, International capital flows and the return to safe assets in the United States, 2003-2007, FRB International Finance Discussion Paper No. 1014.
  5. Gorton, Gary B. and Andrew Metrick, Securitization, 2013, Handbook of the Economics of Finance, Volume 2A, George Constantinides, Milton Harris, and Rene Stulz eds., 1-70, Elsevier. (just read the first three sections)


Class 3: The Housing Crisis (September 16)

Coursera 5

I: Class discussion of modules and readings

II: Guest speaker: Professor Robert Shiller

Suggested Readings:

  1. Bernanke, Ben S., The Subprime Mortgage Market, Speech at the Federal Reserve Bank of Chicago’s 43rd Annual Conference on Bank Structure and Competition, Chicago, Illinois, May 17, 2007.
  2. Shiller, Robert J., 2007, Understanding Recent Trends in House Prices and Homeownership, in Proceedings of the symposium "Housing, Housing Finance, and Monetary Policy." Kansas City: Federal Reserve Bank of Kansas City, pp.89-123. 
  3. Mayer, Christopher, Karen Pence, and Shane M Sherlund, 2009, The rise in mortgage defaults, The Journal of Economic Perspectives 23, 27-50.
  4. Foote, Christopher L, Kristopher S Gerardi, and Paul S Willen, 2012, Why Did So Many People Make So Many Ex Post Bad Decisions? The Causes of the Foreclosure Crisis, Working Paper, National Bureau of Economic Research.


Class 4: Anxiety: January 2007- September 2008 (September 23)

(Yom Kippur: Part I of class will be taped)

Coursera 6 and 7

I: Class discussion of modules and readings

II: Case Session (in breakout classrooms): student-led discussions

Suggested Readings:

  1. Stress Test, Chapter Four
  2. Bernanke, Ben S., 2007, The Recent Financial Turmoil and its Economic and Policy Consequences, speech at the Economic Club of New York, New York, New York October 15.
  3. Fitch Ratings, 2001, Asset-backed Commercial Paper Explained, Asset-Backed Criteria Report.
  4. Shin, Hyun Song, 2009, Reflections on Northern Rock: The Bank Run That Heralded the Global Financial Crisis, The Journal of Economic Perspectives 101-120.
  5. Covitz, Daniel, Nellie Liang, and Gustavo A Suarez, 2013, The Evolution of a Financial Crisis: Collapse of the Asset‐Backed Commercial Paper Market, The Journal of Finance 68, 815-848.


Class 5: Panic: Lehman and Aftermath (September 30)

Coursera 8

I: Class discussion of modules and readings

II: Simulation Exercise (in breakout rooms): Lehman Weekend.

Suggested Readings:

  1. Stress Test, Chapters Five and Six
  2. Krishnamurthy, A., 2010, How Debt Markets Have Malfunctioned in the Crisis, Journal of Economic Perspectives 24, 3-28.
  3. McCabe, P., 2010, The Cross Section of Money Market Fund Risks and Financial Crises, Working Paper.
  4. Gorton, Gary, and Andrew Metrick, 2012, Securitized Banking and the Run on Repo, Journal of Financial Economics 104, 425-451.


Class 6: The Policy Response (October 7)

Coursera 2 and 9

I: Class discussion of modules and readings (Zhang Auditorium)

II: Lehman Simulation discussion (in breakout classrooms)

Suggested Readings:

  1. Stress Test, Chapters Seven and Eight
  2. Bernanke: Some Reflections on the Crisis and the Policy Response, At the Russell Sage Foundation and The Century Foundation Conference on "Rethinking Finance," New York, New York, April 13, 2012
  3. International Monetary Fund, 2009, Navigating the Financial Challenges Ahead, Global Financial Stability Report (just read Chapter III)
  4. Reinhart, Vincent. 2011. A Year of Living Dangerously: The Management of the Financial Crisis in 2008, Journal of Economic Perspectives, 25(1): 71-90.
  5. Geanakoplos, John, 2014, Leverage, Default, and Forgiveness, Journal of Macroeconomics 39, 313-333.


Class 7: Europe in the Global Financial Crisis (October 14)

Coursera 11
I: Class discussion of modules and readings

II: Case Session (in breakout classrooms): student-led discussions


October 21: No class. Fall Break.


Class 8: The (Continuing) Crisis in Europe (October 28)

Coursera 12

I: Discussion of modules and readings (and crisis update)

II: Case Session (in breakout classrooms): student-led discussions

Suggested readings

  1. Stress Test, Chapter Eleven
  2. Mario Draghi, 2012, President’s address at the 14th ECB and its Watchers Conference,
 Frankfurt am Main, June 15
  3. Lane, Philip R. 2012, The European Sovereign Debt Crisis, Journal of Economic Perspectives, 26(3): 49-68.
  4. Shambaugh, Jay C., 2012, The Euro's Three Crises [with comments and discussion by Ricardo Reis and Helene Rey], Brookings Papers on Economic Activity 157-231.
  5. Bernanke, Ben, and Harold James, 1991, The Gold standard, Deflation, and Financial Crisis in the Great Depression: An International Comparison, in Financial Markets and Financial Crises (University of Chicago Press).


Class 9: Eurozone Crisis Panel and Breakout Sessions– Participants TBA (November 4)

No Coursera Lecture


Class 10: Regulatory Aftermath (November 11)

No Coursera Lecture

I: Lecture on bank capital, Dodd-Frank and regulation

II: Case Session (in breakout classrooms): student-led discussions

Suggested Readings:

  1. Stress Test, Chapters Nine and Ten
  2. Noeth, Bryan, 2011, Financial Regulation: A Primer on the Dodd-Frank Act, Liber8: Economic Information Newsletter, Federal Reserve Bank of St. Louis.
  3. Acharya, Viral V., Thomas Cooley, Matthew Richardson, Richard Sylla, and Ingo Walter, 2011, The Dodd-Frank Wall Street Reform and Consumer Protection Act: Accomplishments and Limitations, Journal of Applied Corporate Finance 23, 43-56.
  4. Moody's Analytics, 2011, Basel III regulations: A Practical Overview.
  5. Draghi, Mario, Financial Integration and Banking Union,
 speech at the conference for the 20th anniversary of the establishment of the European Monetary Institute,
 Brussels, 12 February 2014


Class 11: Responding to Future Crises (November 18)

Coursera 10

I: Class discussion of module (Zhang Auditorium)

II: Coursewide Q&A (Zhang Auditorium)


November 25: No class. Thanksgiving Break.


Class 12: Summary and Review (December 2)

Coursera 13

I: Class discussion of module and readings

Suggested Reading:

  1. Stress Test, Epilogue


Class 13: Geithner Summary Lecture (December 9)

I: Geithner summary lecture (Zhang Auditorium)

II: Geithner Q&A (in breakout rooms)


December 15: Final Papers Due by 5:00 p.m.


Last Updated 9/2/2015

Course Summary:

Date Details Due