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InternationalFinance(MN2114)Assignment2015The module is assessed on the basis of an individual essay. There is a 2,000 word limit. The deadline for submission is mid-day Tuesday 5th May (Start of week 23) You must chose and answer ONE out of the following THREE essay topics:

Question1 Describe the origins and evolution of the Eurocurrency markets and the key financing instruments they provide for firms and organisations operating internationally. Why did these markets grow so fast and what are the advantages of raising finance through them for international businesses and organisations? Further Readings Norman, P. (2007), Plumbers and visionaries: securities settlement and Europe's financial markets, John Wiley & Sons, Chichester, England ; Hoboken, NJ Chapters 2-4 (pp. 17-59) Donald MacKenzie, Whats in a number? The importance of LIBOR, real-world economics review, issue no. 47, 3 October 2008, pp 237-242 http://www.paecon.net/PAEReview/issue47/MacKenzie47.pdf McKinnon, R. I., McKinnon, R. I., McKinnon, R. I., & McKinnon, R. I. (1977). The eurocurrency market. International Finance Section, Department of Economics, Princeton University Genillard, R. L. (1967). The Eurobond Market. Financial Analysts Journal, 23(2), 144-151.

Question2 In July 2014, the BRICS (Brazil, Russia, India, China, and South Africa) announced an agreement to establish a development bank. The initiative is referred to in the Financial Times article below describing the launch of this initiative as an attempt to conjure a mini-World Bank and a mini-International Monetary Fund. Discuss the similarities and differences between the IMF and World Bank and the institutions proposed in the BRICS initiative. Can the so-called BRICS Bank become a credible developing economy alternative to the existing international monetary system?

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Further Readings The Brics bank is a glimpse of the future - http://www.ft.com/cms/s/0/f7b876a0-170e-11e4-b0d7-00144feabdc0.html#axzz3LzT9wTcT Brics bank ought to be welcomed by poorer countries - http://www.ft.com/cms/s/0/ee7ab07e-1bfc-11e4-9db1-00144feabdc0.html?siteedition=uk#axzz39gZrgiQ9 D'Arista, J. (2008). "Replacing the failed Washington consensus." Journal of Post Keynesian Economics 30(4): 523-540. Mateos y Lago, I., R. Duttagupta and R. Goyal (2009). The debate on the international monetary system, International Monetary Fund. Schwartz, A. J. (2000). "Do we need a new Bretton Woods" Cato J. 20: 21.

Question3 On December 1st 2001, with the country facing increasing economic and social instability, the government of Argentina decided to close the countrys banks, leading to almost total economic, social, and political collapse in the months that followed. Starting from the article by Feldstein below describing the crisis, analyse the Argentinian crisis and its roots in the fixing of the exchange rate of the Argentinian Peso to the US dollar through the perspective of the trilemma proposed by Obstfeld and Taylor (2004). To what extent is the trilemma a useful analytic tool? Further Readings Martin Feldstein, 2002. Argentinas Fall: Lessons from the Latest Financial Crisis. Foreign Affairs, 81(2), pp.814. Available at: http://www.jstor.org/stable/20033080. Maurice Obstfeld, Jay C. Shambaugh and Alan M. Taylor, 2005. The Trilemma in History: Tradeoffs among Exchange Rates, Monetary Policies, and Capital Mobility. The Review of Economics and Statistics, 87(3), pp.423438. Available at: http://www.jstor.org.ezproxy3.lib.le.ac.uk/stable/40042939 GUIDELINES FOR WRITING YOUR ESSAY You are expected to demonstrate evidence of reading beyond standard textbooks and lecture notes The further readings are just the starting point for your assignment Criteria for a good essay:

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A solid reference list based on reliable sources Good understanding of key concepts and ideas Some imagination and originality Inclusion of data and graphs Development of argument so that the whole essay hangs together Inclusion of examples, illustrations Substantiated conclusions