The goal of this course is to develop a working knowledge of the interplay between regional economic frameworks, strategies of firms and financial markets. In this course, we want to assess the relations between the economy and markets, in a way which opens debates. Our perspective is structured along the following lines:
- The genealogy of modern finance and how deeply-rooted theories are now challenged by the 2007 crisis. Markets as a way to finance the economy- The link between economic and financial performance - The theory of the firm and the role of corporate governance, the derminants of the market valuation of the firm- Financial markets as a way to manage world household savings and risks- The challenge to invest for the Asset management industry (asset allocators, fund managers...). A particular focus will be given on the role played by the industry in the reshaping of corporate strategies, in terms of financial structure, M&A, business portfolio managementThe course is based on solid professional and academic experience. However it is not a mathematical course (a topic which receives excellent coverage elsewhere at Polytechnique), nor a catalog of consulting firm’s methodologies. This is not a problem-solving course either. Instead, it is expected from the students that they understand how academic theories and business practices work together in the real world, and that they develop a personal thinking in an autonomous way. We trust this shall be useful to them through the course of their careers.Each class is divided in two parts. First, a presentation is given of the themes which are relevant for the understanding of the topic (eg. the interplay of markets and capitalism, the nature of competitive advantage, portfolio construction, etc.) and the understanding of mechanisms leading to market failures. Second, a case study takes place on the basis of documents distributed in advance, or with a guest speaker. Students are asked to have read these documents and provide a written synthesis of their thoughts on the topic (bullet points). A group of students presents the case to the class.A particular emphasis is placed on training structured understanding of current business and economic topics. Each student is asked at some point in the course to prepare a 5mn “briefing” on a current topic. Examples from last year: “Financial impact of the referendum in Scotland”; “Quantitative easing in the Eurozone”; “Relevance of ETFs”, etc.We reckon as important that students important can exchange views with qualified professional executives. In 2014-2015 we had presentations and Q&A with a trader at UBS, the Directeur général délégué of Fédération Française des banques, the Head of Investor relations at Air Liquide, and the global CEO of BNPParibas Asset ManagementContent: This course is divided into three main topics.1) Capitalism in 2015
- The birth of modern finance, market and economic crisis and doctrines since 1929
- Lessons from the 2007 crisis, structural issues and theoretical debate
- Finance: the many debates which structure global finance (turmoil, fines and repression, asian expansion). What has changed since 2008? What has remained?
2) Corporate governance and the financing of the firm
- Financing the firm and the Modigliani-Miller theorem. The CFO as a seller of securities
- Historical perspective and international comparison (stockholder versus stakeholder models)
- Economic analysis of compensation policies: stock options, bonus
3) Asset Management
- Portfolio theory (Markovitz, etc.)
- Asset allocation, theory and real life, the Yale model
- The Asset Management industry (strategic perspective and detailed analysis)
Course taught in English
Course primarily designed for QEF students. Other students welcome if adequately motivated.
Niveau requis : No Prerequisites in Economics required
Modalités d'évaluation : Students are evaluated through their participation in class, oral and written presentations by groups, oral briefings. There will be a 1hr essay to complete on the day of the last course.
Langue du cours : Anglais