Course Description:

The focus of this course is primarily on determinants of competitive performance in the global financial services industry. It covers a broad range of commercial and investment banking products and activities that are carried out internationally, and addr esses the dynamics of competition in international banking, focusing especially on financial structure (ranging from universal banks to specialist financial services firms).

The substantive discussion of competing in various international commercial and investment activities is linked to a geographic dimension, which includes conditions in the financial services sector in the US, Europe, Japan, and emerging markets. In that c ontext, we also focus on various types of risks - including country risk, one of the unique aspects of international finance. We consider both the nature of these risks and how they can be addressed by participants and by governments in a volatile global environment.

Through the course, relevant current events are examined and used to illustrate teaching points.

Concluding the course is an assessment of the determinants of competitive strength, market share, profitability, growth and similar dimensions of performance that determine success by individual financial institutions in the global marketplace.

Instructors:

ROY C. SMITH is the Kenneth Langone Professor of Entrepreneurship and Finance, and Professor of International Business. He is a former Partner of Goldman, Sachs & Co. Office: MEC 9-59, Tel. 998-0719, Fax. 995-4220, e-mail: rsmith@stern.nyu.edu.

INGO WALTER is the Charles Simon Professor of Applied Financial Economics and Director, New York University Salomon Center. Office: MEC 9-60, Tel. 998-0707, Fax. 995-4220, e-mail: iwalter@stern.nyu.edu.

Teaching Assistant:

Assistant: Robyn Vanterpool: MEC 9-160, Tel. 998-0703, Fax. 995-4220, e-mail: rvanterp@stern.nyu.edu.

Administrative Matters

Prerequisites:
Students registering for this course should have had previous courses in basic economics, accounting and financial analysis at the undergraduate or graduate level. Prerequisites can be waived by consent of the instructors.

Pedagogy:
The course is case-oriented, and includes extensive classroom participation requiring students to apply principles developed in class to actual international commercial and investment banking situations. The case discussions are interspersed to explain the technical aspects of the activities covered by the cases. The course does not involve routine lectures of material presented in the readings, and therefore the class sessions and the readings complement each other. All readings and case preparation should have been completed prior to the class for which they are assigned.

Text and cases:
The texts for the course covers both international commercial and investment banking:

Roy C. Smith and Ingo Walter, Global Banking (New York: Oxford University Press, 1997).

Ingo Walter and Roy C. Smith, High Finance in the Euro-zone (London: Financial Times-Prentice Hall, 2000).

A course packet of all assigned cases will be handed out on the first day of class.

Case Assignments:
Students should carefully read and be prepared to discuss all assigned cases. No cases need to be handed-in. However, we will call on students in class to present their case findings. The assigned cases will also constitute a significant part of the two examinations.

Examinations:
There will be a mid-term examination which will cover the first half of the course and a final examination which will cover the second half of the course. The dates of the exams are as follows:

Mid-term: Monday, October 21, 2002, 6:00 - 7:30 pm (followed by a half-class session)

Final: Monday, December 16, 2002, 6:00 - 8:00 pm

The final exam covers only the material after the mid-term exam. Both exams will deal with all of the assigned readings, cases, and classroom discussions. Students who have not read the cases or have not been present for the class discussions will find it difficult to pass the course.

Classroom Participation:
Each student will be expected to participate actively in class discussion. Students who do not participate will be graded less favorably than those who do.

Course Home Page:
There is a home page for this course on the Stern network, where you can download a copy of this outline and other materials: http://www.stern.nyu.edu/~rsmith or http://www.stern.nyu.edu/~iwalter.

Revised by Robyn Vanterpool 2/15/2002