FM200      Half Unit
Financial Systems and Crises

This information is for the 2020/21 session.

Teacher responsible

Prof Dimitrios Vayanos


This course is compulsory on the BSc in Finance. This course is not available as an outside option nor to General Course students.

Course content

The course FM200 Financial Systems and Crises covers financial markets and institutions, and their interaction with the real economy. The course emphasizes particularly banks and credit markets, and their role in generating economic growth as well as financial crises. Basic economic theories and models developed to understand these phenomena are covered, and the theoretical analysis is complemented with a historical perspective.

The first part of the course, taught over weeks 1-6 of Michaelmas Term, presents theories of debt and banks; reviews key historical developments pertaining to banks and financial crises until the middle of the 20th century; and presents theories of credit booms and busts in the macroeconomy.

The second part of the course, taught over weeks 7-10 of Michaelmas Term, reviews key historical developments pertaining to banks and financial crises from the middle of the 20th century until now; reviews how money markets work and how central banks conduct monetary policy; presents the theory and practice of bank regulation; and reviews the international monetary system.


33 hours of seminars in the MT.

This course is taught in the interactive lecturing format. There is no distinction between lectures and classes/seminars; there are “sessions” only, and the pedagogical approach in each session is interactive.

Formative coursework

Students will be expected to produce a number of problem sets in the MT.

Indicative reading

1. Kindleberger, Charles, 2015, Manias, Panics and Crashes: A History of Financial Crises, 7th edition, Palgrave Macmillan.

2. Gorton, Gary, 2012, Misunderstanding Financial Crises: Why We Don’t See Them Coming, Oxford University Press.

3. Tirole, Jean, 2006, The Theory of Corporate Finance, Princeton University Press.


In-class assessment (30%) and in-class assessment (70%) in the MT.

The first ICA will be held in in Week 6 and the other at the end of MT.

Important information in response to COVID-19

Please note that during 2020/21 academic year some variation to teaching and learning activities may be required to respond to changes in public health advice and/or to account for the situation of students in attendance on campus and those studying online during the early part of the academic year. For assessment, this may involve changes to mode of delivery and/or the format or weighting of assessments. Changes will only be made if required and students will be notified about any changes to teaching or assessment plans at the earliest opportunity.

Key facts

Department: Finance

Total students 2019/20: 47

Average class size 2019/20: 47

Capped 2019/20: No

Value: Half Unit

Guidelines for interpreting course guide information

Personal development skills

  • Problem solving
  • Application of information skills
  • Application of numeracy skills
  • Commercial awareness