International Money and Banking

This is the class website for University College Dublin module International Money and Banking (ECON30150) being taught by Professor Karl Whelan in Spring 2018.

Here is a handout describing the structure of the module, assessment and other details.

Sample final exam questions (Final version)

Lecture Notes

0. Introduction

1. Money as a Medium of Exchange

2. Banks and Financial Intermediation

3. Liquidity and Solvency

4. Central Banks

5. The Money Supply and Monetarism

6. Problems with Monetarism

7. The Fed and the ECB

8. Central Banks and Interest Rates

9. Banking Crises

10. Incentive Problems in Banking

11. Banking Regulation

12. The Term Structure of Interest Rates

13. Default Risk and Collateral

14. Real Interest Rates, Lower Bounds and Quantitative Easing

15. The Phillips Curve: Evidence and Implications

16. The Taylor Rule

17. Exchange Rate Regimes and the Euro Crisis


Source Material and Readings

A Comparative Chronology of Money. Website based on A History of Money from Ancient Times to the Present Day by Glyn Davies.

Jevons on Barter

Milton Friedman: The Island of Stone Money

R. A. Radford:  The Economic Organisation of a P.O.W. Camp

Charles Goodhart: Two Concepts of Money

A History of Money: From AD 800 by John F. Chown. Google Books version. Chapter 5 is “The Great Debasement of Henry VIII’s Reign”

Major Developments in the History of the Bank of England

Karl Whelan: How Is Bitcoin Different From The Dollar?

Karl Whelan: So What’s So Special About Bitcoin?

Bank of Ireland’s Interim Report with June 2016 results.

Cleveland Fed: Bank Capital Requirements: A Conversation with the Experts

Patrick Honohan’s Report: The Irish Banking Crisis Regulatory and Financial Stability Policy 2003-2008.

Bank of England: Understanding the fair value of banks’ loans

Bad Journalism on Bank Capital Example One: London Review of Books

Bad Journalism on Bank Capital Example Two: Fortune

Bad Journalism on Bank Capital Example Three: New York Times

Federal Reserve: Recent Balance Sheet Trends

The weekly consolidated balance sheet of the Eurosystem from the ECB.

Karl Whelan:  Is the ECB Risking Insolvency? Does it Matter?

Karl Whelan: Should Monetary Policy be Separated From Banking Supervision?

Information on Payments Systems: TARGET2 and Fedwire.

ECB: The demand for currency in the euro area and the impact of the euro cash changeover

Paul De Grauwe and Magdalena Polan: Is Inflation Always and Everywhere a Monetary Phenomenon?

Steve H. Hanke and Nicholas Krus: World Hyperinflations

Top Five Hyperinflations

AFP: Venezuela releases new banknotes in cash crisis

New York Times: Venezuala Issues New Banknotes Because of Hyperinflation

Todd Keister and James McAndrews Why Are Banks Holding So Many Excess Reserves?

Guy Debelle: On Europe’s Effects on Australian Financial Markets

ECB Protocol (i.e. the legal statute underlying the ECB and Eurosystem).

ECB Press Conferences: Transcripts and Video

ECB monetary policy meeting accounts

ECB: Banking Supervision

San Francisco Fed: Information on the the Fed’s role in banking supervision.

FOMC Statements, Minutes, and Transcripts

Ben Bernanke: Implementing Monetary Policy

Daily Data from the NY Fed: Fed Funds Rates and Details of Open Market Operations

Joseph Gagnon and Brian Sack: Monetary Policy with Abundant Liquidity: A New Operating Framework for the Federal Reserve

Josh Frost et al: Overnight RRP Operations as a Monetary Policy Tool: Some Design Considerations

Karl Whelan: The Secret Tool Draghi Uses to Run Europe

The ECB’s ELA Procedures

Ben Bernanke: Nonmonetary Effects of the Financial Crisis in the Propagation of the Great Depression (American Economic Review, June 1983. Not available outside UCD. Go through UCD Connect and the Library Page.)

Karl Whelan: Containing Systemic Risk

FDIC Failed Bank List.

Karl Whelan: Banking Union and the ECB as Lender of Last Resort

Press Release: A single rulebook for the resolution of failing banks

Bloomberg: Italy Commits $19 Billion for Veneto Banks in Biggest Rescue

Bloomberg: Testing Europe’s Resolve on Failing Banks

Piergiorgio Alessandri and Andrew Haldane (Bank of England): Banking on the State

Simon Johnson: Economic Recovery And The Coming Financial Crisis.

Douglas Diamond and Raghuram Rajan: The Credit Crisis: Conjectures about Causes and Remedies

Documentation for the Basle 2 Internal Ratings Based model.

Philipp Hildebrand: Is Basel II Enough? The Benefits of a Leverage Ratio

New York Times: Risk Mismangement

Patrick Honohan: Bank Failures: The Limits of Risk Modelling

Andrew Haldane and Vasileios Madouros. The Dog and the Frisbee.

Dan Davies. Facts and Myths About Bank Leverage Ratios

Andrew Crockett: Marrying the Micro- and Macro-Prudential Dimensions of Financial Stability

Samuel Hanson, Anil Kashyap and Jeremy Stein: A Macroprudential Approach to Financial Regulation

Basle 3 Agreement

Andrew Haldane: The Bank and the banks.

Financial Stability Board press release on TLAC.

Basel Committee on Banking Supervision: High-level summary of Basel III reforms

McKinsey: Basel “IV”: What’s next for banks?

Selected Interest Rates from the Federal Reserve.

NTMA Bond report website.

Spreadsheet with bond yield examples

ECB Euro Area Yield Curve

Historical yield curve data from the Federal Reserve

3-D yield curve from the New York Times

FOMC Statements.

Ben Bernanke: The Financial Accelerator and the Credit Channel

Karl Whelan: How Does QE Work? A Picture Worth a Thousand Words

Joseph Gagnon, Matthew Raskin, Julie Remache, Brian Sack: Large-Scale Asset Purchases by the Federal Reserve: Did They Work?

Stefania D’Amico and Thomas B. King: Flow and Stock Effects of Large-Scale Treasury Purchases

Milton Friedman: The Role of Monetary Policy.

Ben Bernanke: The Benefits of Price Stability

Ben Bernanke: The zero lower bound on interest rates: How should the Fed respond?

Olivier Blanchard, Giovanni Dell’Ariccia, and Paolo Mauro: Rethinking Macroeconomic Policy

Brad DeLong: Central Bank Credibility and Consistency: The Analytics

John Taylor: Discretion Versus Policy Rules in Practice

Glenn Rudebusch: The Fed’s Monetary Policy Response to the Current Crisis

Karl Whelan: Sovereign Default and the Euro

CEPR: Rebooting the Eurozone: Step 1 – Agreeing a Crisis narrative