essay questions on financial markets

155 Financial Crisis Essays & Examples

Looking for finance essay topics? You’re in the right place! The subject of financial economics is worth exploring.

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🏆 top financial crisis essay examples, 💰 financial crisis essay topics, 👍 financial crisis research paper topics, 🏧 exciting financial essay topics, 📑 financial crisis topics for essays, ❓ research questions about financial crisis.

A financial crisis means massive depreciation of financial assets. It usually happens in the forms of banking, currency, and debt crises. Though the issue is studied well, financial crises still occur in various parts of the world.

In your finance crisis essay, you might want to focus on financial management in turbulent periods. Another idea is to discuss what it takes to survive a global financial crisis. One more option is to compare various types of financial crises. Whether you are assigned an argumentative essay, analytical paper, or research proposal, this article will be helpful. Here we’ve collected financial crisis research paper topics, current essay titles, writing tips, and financial crisis essay samples.

• The financial system and its components
• The role of investors in the financial system
• Personal, corporate, and public finance
• Financial risk management
• Quantitative finance and financial engineering
• Behavioral finance: the psychology of investors
• Early history of finance
• History and development of money
• Experimental finance and its goals
• Mathematical modeling in financial markets analysis
• Financial Crisis of 2007-2008 in ‘The Big Short’ Movie Michael predicted that it would devaluate mortgage bonds and, therefore, decided to short the housing market, that is, to bet on the market crash.
• General Electric and the Financial Crisis of 2008 Although GE’s success is often attributed to the significant amount of financial assets that the company has, it owes its survival through the 2008 crisis to the careful and well-thought-out plan of investing in the […]
• 2008 Financial Crisis in Dubai In order to address the collapse in the real estate market observed in Dubai in 2008, the Emirate’s authorities focused on elaborating stricter regulations on developers of the housing projects and on the buyers. 26 […]
• Impact of World Financial Crisis on the UAE Economy The decline in economic growth was reflected in the significant reduction in the country’s GDP. However, the profitability and growth of the sector reduced substantially in 2009 due to the following factors.
• British Airways Performance and Global Financial Crisis This paper analyzes the performance of British Airways’ leadership in the wake of the global financial crisis. BA CityFlyer, which is a subsidiary of the British Airways, dominates operations in the London municipality airport.
• Global Financial Crisis Causes and Impacts After a number of years since the first occurrence of the crisis, it is still not possible to explain fully the impact of the global financial crisis because the economic emergency keeps on hindering and […]
• The effect of global financial crisis on Saudi Arabian economy The countries stability of the banking sector was also seen in the change in banking activities over the period of global financial crisis, the country recorded the worst banking growth rate in the years between […]
• East Asian Financial Crisis of 1997-98 However, the quick actives responses by the states in the region helped in the quick aversion of the crisis and its impacts on the region’s economy.
• Causes and Solutions of the 2008 Financial Crisis The current essay describes the causes of the Financial Crisis of 2008 and the solutions suggested by the Keynesian school of thought.
• Apple and Hewlett Packard During 2008 Financial Crisis Though the general demand has not reached the level it was before the crisis, many companies have taken advantage of the rising demand and have made tremendous sales. However, the company has increased its spending […]
• Argentina’s Financial Crisis: A Critical Review of Causes and Effects The unprecedented expansion in the country’s markets and economy at large was attributed to the rise in agricultural exports. The country’s economy was heading in the right direction following the introduction of the convertibility system.
• Social Distancing, Financial Crisis and Mental Health The lockdown leads to the inability of people to go to the hospital for mental health consultation and treatment due to the anti-COVID measures. It is possible to talk about the spread of mental health […]
• Aspects of the 2008 Financial Crisis According to Eisinger, none of the participants in the story in the film had any idea of the coming crisis. One of the connections between the film and the textbook is that of corporate social […]
• Essential Points From the Financial Crisis The first important point on slide 10 is the failure to penalize the originator for passing the mortgage to the provider.
• Argentina and Russia’s Financial Crisis Investors’ loss of faith in the Russian economy caused them to sell their Russian holdings, lowering the value of the Russian rouble and raising fears of a financial crisis.
• Ethical Questions in the 2008-2009 Financial Crisis What followed was an investigation of the genesis of the crisis, which revealed that catastrophic failure in oversight, the systemic weakening of usury laws, and outright thuggery by banks and mortgage salespeople were the major […]
• The 2008 Financial Crisis and Housing Policies Under the State Department of Housing and Urban Development, the government introduced the Section 8 Voucher. The function of this voucher was to meet the gap between what the renters would get and the actual […]
• 2008 Financial Crisis from a Neoliberal Perspective While such a position seems reasonable, the overall adherence of the financial system, including accounting and auditing, contributed to the crisis due to the unbearable level of loans and fictitious assets dominating the business.
• Corporate Social Capital During Financial Crisis The credit crisis related to the mortgage problem in 2008 has been one of the massive financial issues of the world since the times of the Great Depression.
• 2008 Global Financial Crisis in Andrew Sorkin’s “Too Big to Fail” The book Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System from Crisis and Themselves, written by Andrew Ross Sorkin, explores the events and consequences […]
• Financial Crisis in Greece It is doubtless that the value of money is essential in determining a number of factors like the stability of the economy and inflation.
• The Euro Financial Crisis Causes and Outcomes The involvement of the central banks of is an attempt to demonstrate that all the central bankers are collaborating. The Euro crisis has exarcebated the currency swap process as it is now more expensive to […]
• The 2007 Financial Crisis: Development of the Prices of Shares, Corporate Bonds and Loans The crippling of the financial system in the US and the UK in the period beginning late 2007 was a product of crippling loans.
• Challenges Facing College Sports After Financial Crisis When the housing bubble caused financial depression in the national economy, colleges and universities were some of the most affected institutions, especially because the state and federal legislatures were forced to cut funding, the major […]
• How Money Market Mutual Funds Contributed to the 2008 Financial Crisis While how the prices of shares fell below the set $1 per share was a complex process, it became one of the greatest systemic risks posed by the MMMF to the investors and the economy […]
• How Quantitative Models Contribute to the Financial Crisis The motivation behind this study lies in the desire to understand why and how the economies of many countries around the world, especially in the Middle East, have been shaken to the core by the […]
• South Africa’s Response to Global Financial Crisis Desire to the achieve objective that duly fulfils the needs of an individual while being disadvantageous to the majority of individuals led to the crisis.
• Manifestations of the Financial Crisis in Greece The bank which is also affected by the crisis will also exaggerate the cost of this operation and this leads to a loss on my side.
• Global Financial Crisis Impact on Multi-Nationals The credit crisis was linked to the sub-prime mortgage business. So as to encourage lending, the interest rates were also lowered credibly.
• Qantas’ Actions in the Financial Crisis Context The actions taken by Qantas in reducing their costs can be said to be influenced by the global financial crisis, where the decline of the number of passengers in September 2009 was 0.
• Prospects for Chindia After 2008 Global Financial Crisis According to the Australian business press, the recent economic growth achieved was a result of the relationship between itself and the two countries i.e. However, China experienced a hitch on its international markets especially in […]
• The Global Financial Crisis and Its Impact on Australia The collapse of key institutions in the US and other economies in the world has people scurrying back to the drawing board in a bid to rethink economic policy and regulation strategies.
• The Investment Industry in Kuwait Today (During Financial Crisis) One of the confessions was that the investment authority of Kuwait otherwise known as would not be in a position to provide financial support that would assist in the restoration of confidence that was already […]
• The Financial Crisis on the UK Economy Analyze the causes and the impact of the current financial crisis on the UK economy. Due to the above-trend growth in 2006 and 2007, activity needs to be slow.
• Financial Crisis Management in the United Nations A crisis can be defined as the perception of an abnormal situation that is beyond the capability of the business and its scope to deal with.
• Lehman Brothers and the 2008 Financial Crisis As a result, when the management of the bank expected assistance from other firms and the Bank of America, it did not receive the help it needed.
• Global Financial Crisis and Real Estate Issues The central point of the argument is that the real estate market in the US and the policy called “trailer park lending” was the main reason for the worldwide economic crisis.
• 2008 Global Financial Crisis: Crises of Capitalism? Although I had an idea of the possible catalysts of the 2008 global financial meltdown before watching the video, Harvey presented a clear report of the events that occurred before the crisis and put them […]
• Corporate Government During the World Financial Crisis The chairman is the leader of the board of directors while the CEO is the person who oversees the day to day activities of the company; each of them performs a distinct and critical role […]
• Corporate Governance During the Global Financial Crisis The chairman of the board of directors is the leader of both the board and the company whereas the CEO is the person who oversees the day-to-day activities of the company.
• Nucor Corporation After Financial Crisis in the US However, in 2009, the company made the largest loss in its history of $299 million; the loss was the first annual loss since 1966. The depreciated purchasing power parity of the people in 2009 is […]
• Global Financial Crisis and Its Ethical Causes The reason for this is simple the analysis of what had brought about this particular financial crisis and what accounted for the subtleties of its extrication points out to an undeniable fact that it was […]
• 2008 Financial Crisis: Kuwait’s Economic Struggle At the year 2008, the intensity of the crisis was at the peak, causing oil prices which led to a decrease in production and drop in GDP of Kuwait.
• Financial Crisis of 2008 Economics specialists have argued that the global financial crisis of 2008 was caused by a combination of factors, including the abundance of cheap credits in the macroeconomic environment as well as counterproductive decision-making in governments […]
• Banking Instability During the Global Financial Crisis Though the combination of aspects that resulted in the banking instability in the course of the global financial crisis had never been witnessed previously, the shift from extreme risk-taking to fiscal chaos was a common […]
• Rotana Company’s Financial Crisis and Culture This statement can be seen as being true to the values of the company and how it addressed the issues caused by the 2008 financial crisis.
• British and Dutch Banks After 2008 Financial Crisis Many countries utilised the opportunity of the crisis to work on improving corporate governance and leadership to avoid similar crises in the future.
• The Global Financial Crisis and Its Impacts In addition, a case of a company is studied to evaluate the impact of GFC on a particular firm, and consider the capability of the firm to survive the crisis.
• The Global Financial Crisis and Its Effect The latest global financial crisis managed to restart a debate on the value of both the stakeholder as well as shareholder theories. This led to the managers being more attentive to the prices of the […]
• Australian Banks in the Global Financial Crisis To understand how Australian banks managed the GFC, it is essential to pay attention to the very structure of its banking.
• Financial Crisis and Great Recession Causality The financial crisis is typically viewed as a primary factor behind the development of the Great Recession. Instead, the financial crisis of 2008 can be deemed a prerequisite of the Great Recession as well as […]
• Financial Crisis in Ferguson’s “The Ascent of Money” By Ferguson, the main purpose of the historian is to relieve humanity from the financial illusions on the examples of the past.
• Global Financial Crisis and Regulatory Responses In the aftermath of the crisis, the government through the Federal Reserve embarked on a mission to restore these financial institutions to their original position.
• Reasons and Consistency of the Financial Crisis 2007-2008 The financial crisis that occurred in 2007-2008 is frequently defined as one of the major financial events at the beginning of the 2000s.
• The Shadow Banking System: Financial Crisis Source The so-called shadow banking system, comprised of numerous institutions operating outside the regulated banking system, has undoubtedly contributed greatly to the emergence of the latest global financial crisis.
• Financial Crisis and Its Impact on UAE Construction The determination of this research is to evaluate the enactment of construction corporations in the United Arab Emirates for the period of the pre and post worldwide eras of financial disaster, which is from 2006 […]
• 1997 Asian Financial Crisis and Its Consequences Beja explores the impacts the crisis had on these countries and the outcomes that occurred years after the end of the crisis.
• American Financial Crisis and Its Prevention The interviewee brings about the idea of bureaucracy and political aspects that contributed to the problem, highlighting the corruption and ineffectiveness in the government when bailing out the institutions.
• West Midlands Designers and Architects Ltd: Financial Crisis The second option, which is by merit, will favor the company’s future and also acceptable by a number of the current employees.
• Financial Crisis of 2008 and Consumer Behavior Although the main cause of the global financial crisis that began in 2007 was the bursting of the housing bubble, economists largely agree that the ensuing recession was the outcome of a combination of several […]
• Financial Crisis of 2007-2008: Laws and Policies Nevertheless, one should not assume that the absence of legal safeguards is the only factor that led to this crisis since it is necessary to consider the development of the economy and lack of internal […]
• Financial Crisis in Greece: Origin and Aspects This essay seeks to establish the nature and origin of the crisis, Greece’s advantages and disadvantages in the Eurozone, and Greece’s fiscal policy.
• Austerity Measures after of the World Financial Crisis That is why it becomes obvious that there is a great need in some austerity measures whose main aim is to overcome the results of the world financial crisis and guarantee the stability of the […]
• US Financial Crisis Hit and Its Economy Effect He is an economist and runs a column in the Atlantic magazine on financial matters in the U.S. The article is by Lee Don, a columnist, and journalist in the U.
• The 2008 Financial Crisis In September 2008, the two giant mortgage companies faced the danger of bankruptcy as they had guaranteed close to half of the total mortgages in the US.
• Impact of the Global Financial Crisis on the World The recent global financial crisis happened between the years 2007 and 2008 that was a serious threat to the financial markets in the United States and the rest of the world.
• Effects of Hedge Funds on the Global Financial Crisis The article titled “Do not Blame Hedge Funds for Financial Crisis, Study Says,” in 19th September 2012 issue of the The Wall Street Journal, attempts to remove the hedge fund from blame in the global […]
• Role of International Financial Institutions in 2008 Financial Crisis Even more disappointing is the fact that the financial regulatory standards that were in place were unable to anticipate and therefore avert the ramifications of the financial crisis before it happened as should have been […]
• Global Financial Crisis: Corruption and Transparency Due to the large number of the emerging markets, the global financial regulators lacked a proper mechanism to handle the situation.
• Managing Financial Crises In this line, the financial institutions would have distributed the risk to all the stakeholders. The involvement of many players in the management systems of banks makes it out rightly difficult to blame banks for […]
• ‘What Went Wrong? An Initial Inquiry into the Causes of the 2008 Financial Crisis’ Additionally, failures at the managerial group also resulted in the crash as it led to a re evaluation of the cost of the agencies by the investors.
• Training and Skills Development Programs vs. the Global Financial Crisis The Level of education influences the rate of unemployment in an economy. The increase in gross domestic products is attributed to levels of education and employment.
• The Worst of the Global Financial Crisis Is Still To Come Therefore, considering the numerous flaws that exist in the global economic system and the fact that, most governments have deviated from addressing the real causes of the global financial crisis; hence, formulate strategies of avoiding […]
• The Financial Crisis Impacts on East Asian States The policy response to the currency crisis later led to a crisis in the financial institutions. The financial crisis was similar to the crisis that hit Mexico in 1995 and the difference was only on […]
• States regulatory response to the current financial crisis Having been cited by the International Monetary Fund as the leading contributor towards the world economy in 2007, the onset of the financial crisis meant economic disaster to the state.
• Financial Risk Management: Based on the 2008 Global Financial Crisis While it is believed that the U.S.subprime mortgage market might have prompted the occurrence of the global financial crisis, the primary cause of the crisis was founded on the flawed institutional practices and the instability […]
• The global financial crisis of 2008 The magnitude and the level of disruption of the global economies have led to speculation of various causes that has contributed to its occurrence.
• Carolina Panthers Financial Crisis While it was expected that the team could lose its operating income because of the losses it went through last season, the team emerged as one of the teams that profited greatly in the 2010/2011 […]
• EU Financial Crisis: Risk Management Failures This is for example over- dependence on: the capability of managers to create returns.the merits of financial innovation in efficiently spreading returns and risks in the market, the sufficiency of data and models used for […]
• Public Discourse under the Financial Crisis in the U.S and Canada The number of people that lost their jobs, the number of companies that ran into bankruptcy and dwindled in self-destruction through foreclosures and closures, the amount of money that was pumped into the economy by […]
• Impacts of Financial crisis on Bahrain Impacts of financial crisis on the country’s economy have accelerated debate within the mainstream of economics and many market analysts have devised economic stimulus plan to confront the crisis.
• Effect of Global financial crisis on the Gulf Countries The financial crisis which hit the US in the late months of the year 2007 have over time spread to almost all other countries in the world.
• Cultural Change at Texaco and Financial Crisis The most important and influential challenge was the opportunity to solve the questions of exclusion and discrimination of the minorities and women from the company’s workforce in such high status posts like management.
• After the 2007-2010 Financial Crisis: Across the Chaos and Destruction to the Universal Order Because of the half-baked decisions concerning the integration in the Eurozone had been taken, the Great Britain had to sign the agreement with Brussels concerning the further economical steps, which is likely to drive to […]
• Global Financial Crisis Problems This paper discusses the problem created by the global financial crisis and assesses the viability of the courses of actions taken to counter the problem.
• Global Financial Crisis of 2007-2010 In particular, it has shown that many financial institutions are too much dependent on one another, and the collapse of one organization can result in the collapse of the entire system.
• Eurozone Financial Crisis Henceforth, an analysis is drawn of the causes of crisis in the Eurozone. In addition, the effect of this Eurozone crisis did spread to other countries.
• East Asian Financial Crisis Analysts have argued that the inherent problem with the approach in the region, especially in Japan, was primarily due to much involvement of the government in guiding the free economy.
• The Financial Crisis Causes: Moral Hazard and Adverse Selection The consequences were similar in most parts of the world with the main indicators being debt crises, high unemployment rates, a reduction in the number of home ownership facilities and the demand for the same, […]
• American Financial Crisis It discussed the underlying causes of the crisis and the impact it has had on the economy of the United States.
• Short-term decisions lead to the emergence of the global financial crisis Over the years, since the great depression in the 1930’s, the role of management seems to have diverted significantly from expectations as illustrated by the global financial crisis.
• Spain’s Financial Crisis The disproportionate growth in the real estate sector, coupled with the expansion of credit needed to finance it, is at the basis of the economic imbalances.
• Minsky’s Economic volatility theory as an evaluation of Financial Crisis The modern Marxist, FSA, and organizational Keynesian perspectives associate the causes of the financial slow down with the implementation of the liberal development framework in 1970s when the “Accord of Detroit” development framework was ditched.
• The Global Financial Crisis of 2008-2009 The two key sectors that take the blame for the financial crisis of 2008 and 2009 are the financial sector and the real estate industry.
• Global Financial Crisis Initially, the collapse of AIG, the under-performance of Fallie Mac and Fannie Mac and the merging of the Bank of America and the Merrill Lynch were the start point of the financial problems in the […]
• Global Financial Crisis of the United States Mortgage Industry The deterioration of economies called for government to take fast and immediate measures to rescue their nations; the United Nations for instance had to make policies that protected its local industry from the adverse effects […]
• What Caused the 2008 Financial Crisis in the USA? The opposite trends in the cost of mortgage credit and the housing prices also made the home owners participate more in the market since the risk of default was much lower.
• The Global Financial Crisis and Capitalism for the Elite Rich This Ideology adopted by many if not all of the western nations upholds the private ownership of business and institutions and the owners of these entities are allowed to spread out as much as they […]
• The UK Banking Practice That Led to Financial Crisis Crisis of the magnitude that was experienced is a real threat to the economy of any country and it is imperative for people to learn as much as they can to avoid the circumstance that […]
• The effect of the global financial crisis on political and financial risks The negative effects of the global financial crisis have been felt in most parts of the world i.e.in the advanced countries, the emerging markets and in the developing world.
• Global Trade During the Financial Crisis (from 2006 to 2010) Each of the major trade regions of the world seemed to concentrate more on a given branch of trade and give their outputs to the rest of the world.
• Global Financial Crisis Impact on Australian and World Economies After affecting the banking and credit sectors in the US, the global crisis slowly crept to other countries and in the process became a world crisis.
• International Finance. Main Causes of Recent Financial Crisis One of the specific factors that can be attributed to the recent international financial crisis was the loss on housing mortgage loans due to the decline of mortgage prices in the market.
• The 2008 global financial crisis Soros asserts that whereas the U.S.subprime mortgage market is believed to have prompted the current financial crisis, the basis of the crisis derived from the flawed practices and institutions of the current financial system.
• Benefits of the Old Fashioned Business Models in the light of Global financial Crisis The purpose of this essay is to establish the benefits and drawbacks of old fashioned business models in the light of global financial crisis with reference to Airdrie bank of Lanarkshire in the UK.
• The Recent Financial Crisis The financial crisis has been considered by most economists to be the worst crisis since the Great Depression as it contributed to the failure of major financial institutions in the U.S.and the decline of consumer […]
• Turkey’s 2000-2001 Financial Crisis The first crisis began at the early 90’s while the second began at the beginning of the 21st century. This led to the collapse of the exchange rate and the beginning of the country’s second […]
• The 1997-1998 Asian Financial Crisis This growth was associated with “inflow of investments, improvements in technology, increases in education, a ready supply of labor as people moved from the countryside to the cities to work in factories, and reduced restrictions […]
• Impact of the Global Financial Crisis on the Healthcare Industry The global financial crisis threatened to lead to the total breakdown of the global economy. The global financial crisis reduced the funding of that the healthcare facilities received from the government.
• Changes in Financial Markets and it impact on Recent Financial Crisis Due to the above reason, this study seeks to examine the reasons behind the changes in financial markets during the last 30 years and the role of these changes in the recent financial crisis.
• Cause of the Financial Crisis The reason for this is quite apparent it was namely the Democrats’ preoccupation with ‘combating poverty’ that resulted in passing of the infamous Community Reinvestment Act and in reinforcing its provisions through the course of […]
• Disadvantages of Developed Country (America) When 2008 Financial Crisis However, the scholars do not singly use this as a reason of terming a country as being developed but also adds on to the fact that people in that country should be having the freedom […]
• The Global Financial Crisis Every entity is faced with the inevitable reality of making financial decisions in the following departments; investment for instance where to open shop, dividends for example whether or not to pay and when, working capital […]
• Theories on Causes of Financial Crisis A financial system shock disrupted the situation and the prices of the houses fell and many people could not pay their loans.
• Wesfarmers Limited and the Global Financial Crisis In order to put into perspective the effect of the GFC, we shall study the profitability of the firm from 2007 to 2010.
• Regulation in the Financial Crisis 2008 While numerous claims have been put forth to explain the causes of the 2007-2009 financial crisis, there is almost a universal agreement that the major causes of the financial crisis was the combination of a […]
• The 2008 Financial Crisis: Causes and Consequences Foster and Magdoff Perspective of 2008 Financial Crisis Foster and Magdoff theory that attempts to explain the 2008 financial crisis attributes it to broader factors of monopoly finance capitalism which is a function of a […]
• Ethical Aspects of the Financial Crisis Yet, they would agree that to some degree, the origins of the financial crisis can be traced to the immoral behavior of some individuals who attempted to maximize their own benefits of at the expense […]
• Is Globalization the Main Culprit for the 2008 Global Financial Crisis? Globalization has eroded the powers and the sovereignty of the state, the role of the state to regulate and to steer forward the economy has been largely ignored at the expense of the market, these […]
• The Importance of Ethics in Business in Light of the Recent Global Financial Crisis The lack of concern for the overall good of the society stemmed from the increase in equity-based compensation to top executives which resulted in the declaration that “the paramount duty of management and board is […]
• What Was the Biggest Financial Crisis?
• Did Financial Crisis Alter the Level of Competition in the EMU Banks?
• What Is the Effect of Financial Crisis?
• What Are the Three Stages of Financial Crisis?
• Did Firms Manage Earnings More Aggressively during the Financial Crisis?
• What Causes a Financial Crisis?
• Did the Recent Housing Boom Signal the Global Financial Crisis?
• How Can We Solve Financial Crisis?
• What Is Another Word for Financial Crisis?
• What Is the First Stage in Financial Crisis?
• Can the Government Take Money from Your Bank Account in a Financial Crisis?
• What Was the Worst Financial Crisis in History?
• What Caused the Global Financial Crisis?
• Did the Financial Crisis Affect the Market Valuation of Large Systemic U.S. Banks?
• What Is the Impact of the Global Financial Crisis?
• What Happened in the 2008 Financial Crisis?
• How Did the Financial Crisis Started?
• Did Family Firms Perform Better During the Financial Crisis?
• Did Investors Herd During the Financial Crisis?
• Did Relational Capital Matter during the Financial Crisis?
• Did the Asian Financial Crisis Scare Foreign Investors Out of Japan?
• Did the Financial Crisis in Japan Affect Household Welfare Seriously?
• Did the Global Financial Crisis Alter the Oil–Gasoline Price Relationship?
• Was the 2008 Financial Crisis Caused by Lack of Ethics?
• Was the Financial Crisis Caused by Bankers or Government?
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2018 Practice Essays for A Level Economics

3rd May 2018

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At this time of year lots of teachers work feverishly through essay plans as a way of revising core content and honing those all-important essay exam skills. Here is a selection of micro & macro essay titles that I have been using in class.

Micro Essays

Home ownership has become increasingly difficult to access, particularly for first-time buyers, as house price growth has outstripped growth in wages. Median house prices in England are now 7.7 times higher than median earnings. In London, the ratio can be considerably higher: in Chelsea & Fulham, it is 24.8.

Assess the policies that might be most effective in improving housing affordability in the UK economy (25)

Evaluate the micro and macroeconomic impact of a significant rise in average UK house prices (25) 

Regulation of monopoly 

Using your own knowledge, evaluate the argument that economic welfare can be best promoted through regulation of businesses with monopoly power (25) 

Barriers to entry and profit

Examine the role of barriers to entry in earning economic profit in industries of your choice. (25) 

Contestable markets

Neo-classical theory of competition implies that more firms in a market is the only way to improve outcomes for consumers”. With reference to examples, to what extent do you agree? (25)

Food prices and consumer welfare

Examine the policies a government might use to make food affordable to lower income groups. (25)

Energy market

Evaluate the argument that consumers would benefit from the government imposing a price cap on household energy bills (25)

Plastic pollution, public bads and externalities

Assess the policies that might be most effective in reducing the scale of plastic pollution in the UK and other countries of your choice (25)

Environmental market failure

Discuss the view that the overuse of common access resources is best addressed by government intervention (25)

The Gig Economy

Discuss the impact of the expansion of the gig economy on UK economic performance. (25)

Trade unions in the labour market

Evaluate the possible effects on the UK labour market of a decrease in trade union membership (25)

Discuss the microeconomic and macroeconomic effects of stronger trade unions on the UK economy (25) 

Assess the argument that a universal basic income is likely to be the most effective policy for reducing the scale of income and wealth inequality in the UK (25) 

Evaluate the micro and macroeconomic causes of inequality and poverty in the UK (25)

Essential Revision Resources to Get Before June!

Revision flashcards for a-level economics students.

Resource Collection

Macroeconomics

Globalisation

Evaluate the extent to which globalisation inevitably leads to a rise in income and wealth inequality in one or more countries of your choice (25)

Exchange rates

Using your own knowledge, examine some of the likely macroeconomic effects of a depreciation in the sterling exchange rate (25)

Trade and the European Union

Discuss the likely micro and macroeconomic effects on the UK economy of leaving the EU customs union (25)

Evaluate the view that membership of a customs union has more advantages than disadvantages for an economy. Discuss with reference to any developed or developing country of your choice (25)

Quantitative easing

Using your own knowledge, discuss the impact that quantitative easing has had on UK macroeconomic objectives in recent years (25)

Monetary Policy

Policy interest rates in the UK have been too low for too long and now risk damaging the health of the UK economy. Assess the validity of this view (25)

Development policies

Drawing on knowledge from countries of your choice, evaluate the argument that sustainable development is best achieved by allowing free market forces to allocate resources (25)

Fiscal policy

Since the 2007-08 financial crisis, increases in tax revenues and, to a greater extent, reductions in public spending have contributed to the UK fiscal deficit falling by 7.5 percent of national income by 2016/17. Revenues increased by 1.7 percent of national income and spending decreased by 5.9 percent of national income between 2009/10 and 2016/17.  

Assess the view that the policy of fiscal austerity used by the UK government over recent years has been damaging to the long-term prospects for the UK economy. (25) 

Macroeconomic trade-offs

UK unemployment has fallen to a 45 year low of 4.2% of the labour force, yet CPI inflation remains relatively stable and close to target.

Evaluate the view that, in the case of the UK economy, the standard Phillips Curve trade-off between jobs and prices is no longer valid (25)

European Monetary Union and the EU Economy

To what extent should the Euro Area be considered an optimal currency area? (25)

Discuss the factors that may have contributed to slow economic growth in the European Union (25)

Financial economics

Examine the view that market failure is inevitable in financial markets. Justify your answer with reference to economic theory and evidence (25)

Assess the policies that have been introduced to reduce financial market failures in the UK economy since the Global Financial Crisis. (25)

Evaluate the view that increased regulation of the banking system can be damaging to the competitiveness of an economy. Discuss with reference with countries of your choice. (25) 

Assess the extent to which the financial sector has been responsible for speculative bubbles in one or more countries of your choice. (25)

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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Financial Literacy

Course: financial literacy   >   unit 7.

• Real world: The Case of the Early Bird
• Saving and investing
• Why save and invest
• How financial institutions and markets facilitate saving and investing

The types and functions of financial institutions and markets

• Financial institutions and markets, their roles and services

What are financial institutions?

What are financial markets, why do we need financial institutions and markets, everyday needs, saving money, safety and protection, access to loans, how do we use financial institutions and markets, credit unions, brokerage firms and investment companies, insurance companies, financial advisers, check your understanding.

• (Choice A)   bank A bank
• (Choice B)   brokerage firm B brokerage firm
• (Choice C)   lender C lender
• (Choice D)   credit union D credit union

Financial markets

Stock markets, bond markets, money markets, want to join the conversation.

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Specifications that use this resource:

• AS and A-level Economics 7135; 7136

Teaching guide: financial markets and monetary policy

This resource is provided to assist you in delivering the ‘Financial markets and monetary policy’, which is section 4.2.4 of the A-level specification. Some of the content was included in the previous specification; this guide will focus primarily on those areas which are new or have changed.

The ‘Financial sector’ is included as an area of study in the national ‘GCSE Subject Level Conditions and Requirements for Economics’ and all specifications are expected to cover the following:

• The role of the financial sector and its impact on the real economy
• Financial regulation
• Role of central banks

A-level Economics specifications are also required to cover the nature and impact of monetary policy.

For many years, the nature and role of the financial sector has been a neglected area of study in many Economics courses. The global financial crisis of 2007– 08 and its aftermath have served to emphasise the importance of this sector of the economy for the prosperity of us all.

During their course of study, students will be expected to develop an appreciation of the vital role that is played by financial markets in a modern economy; this includes their importance in allocating scarce resources. They should understand the consequences for the real economy when financial markets do not function well. As Keynes said: ‘When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done.’ (The General Theory of Employment, Interest and Money, 1936).

Students should also understand reasons why financial markets are susceptible to periodic crises and be able to assess some of the measures that the authorities might take to regulate and control such markets. In addition, students should appreciate the role of monetary policy in managing the economy. They should understand how monetary policy is implemented in the UK and be able to evaluate the strengths and limitations of monetary policy measures.

This part of the AQA specification links very closely with a number of other areas of the specification, for example, the sections on ‘Economic growth and the economic cycle’ and ‘Economic growth and development’. The efficiency and effectiveness of financial markets will influence both the short-run and long-run growth of developed economies. In developing economies, the inadequacies of the financial infrastructure can act as a significant barrier to growth. Instability in financial markets is a major cause of fluctuations in economic activity.

There are also links with aspects of behavioural economic theory. Students should appreciate that the behaviour of individuals operating in financial markets may not always be entirely rational and that this can lead to speculative bubbles and financial instability, for example. Another quote attributed to Keynes, ‘The market can stay irrational longer than you can stay solvent.’ illustrates that many economists have long recognised that instability can persist in financial markets and cause serious problems for both individual economies and the global economy.

This overview provides a summary of the content of the ‘Financial markets and monetary policy’ section of the specification. Further detail is provided later. The guide provides a comprehensive coverage of the new topics, indicating the depth of knowledge required. It does not, however, provide full coverage of the topics that were also included in the previous specification.

The structure of financial markets and financial assets

Students are expected to develop an appreciation of the role that financial markets perform in the wider economy and to recognise that there are various sub markets that comprise the financial sector of an economy. In particular, they should understand the difference between the money market, the capital market and the foreign exchange market. They should also be aware that there are other financial markets such as the markets for commodity futures and insurance products. Students should understand the nature and functions of money, recognising the importance of money in a modern economy. The difference between debt and equity should be understood and how this relates to the financing of business and governments. In addition, they should be able to calculate the yield on financial assets and to explain why there is an inverse relationship between interest rates and bond prices.

Commercial banks and investment banks

It is expected that students should understand the difference between a commercial bank and an investment bank but should recognise that many banks are engaged in both commercial and investment banking activities. They should understand that commercial banks raise the funds by accepting deposits and make profits by lending to individuals, firms and governments. They should know that banks can also raise substantial amounts of money by borrowing in wholesale markets, eg by issuing bonds. Their role in facilitating payments for goods and services should be appreciated. Students should recognise that, unlike commercial banks, investment banks do not take in deposits from customers. Their activities include: helping firms to issue shares and raise finance, assisting with mergers and acquisitions, investment management and trading securities and foreign exchange.

The risks that banks incur through borrowing short term and lending long term should be understood and the way in which banks attempt to manage this risk should be illustrated by looking at the general structure of a typical commercial bank’s balance sheet. The balance sheet can also be used to illustrate how banks attempt to reconcile the potential conflicts between liquidity, profitability and security. Students should also understand that banks create deposits by providing loans. They should recognise that bank deposits are the main component of the money supply and appreciate some of the factors that limit the banks’ ability to create deposits such as their capital reserves, their holdings of liquid assets and the demand for loans.

Central banks and monetary policy

Much of this part of the specification was included in the previous specification although, since that was written, new monetary policy instruments have been introduced and will continue to evolve. It should be understood that a central bank has two main responsibilities, ie to support the government in maintaining macroeconomic stability and to maintain financial stability. Central banks use monetary policy to try to achieve macroeconomic stability and students are expected to keep up to date with any significant changes in the way in which monetary policy is implemented in the UK. They should also recognise the importance of the lender-of-last-resort function in achieving financial stability.

The regulation of the financial system

The financial crisis in 2008–09 has highlighted the problems that can develop in financial markets and financial institutions, and how these problems can seriously impair the performance of the real economy. In the UK, the government has responded by changing how individual financial institutions and the financial sector as a whole is monitored and regulated. Students should understand the role of the Bank of England in maintaining the stability of financial institutions and markets through its use of the lender-of-last-resort function, the work of the Bank’s Financial Policy Committee (FPC) and Prudential Regulation Authority (PRA). They should also have a general awareness of the role of the Financial Conduct Authority (FCA). It should be understood that bank failures can result from a critical shortage of liquidity and from insufficient capital. Whilst students will not be expected to calculate liquidity and capital ratios, they should understand their importance when assessing the stability of banks.

A selection of texts and online resources are included to support your teaching.

a) Financial markets

The fundamental purpose of financial markets is to channel funds from those who have surplus funds, those who wish to spend less than their income, to those who have a shortage of funds, those who wish to spend more than their income. For example, people may wish to save through a pension fund for their retirement whilst firms may wish to borrow funds to finance the expansion of their business. This process of channeling funds can take place through a financial intermediary, such as a bank, or may take place directly through financial markets, eg when a company issues new shares or the Debt Management Office of the Treasury issues government bonds

In today’s global economy, there are massive financial flows between economies and this is reflected in the chart above. For example, the Norwegian government might invest some of its sovereign wealth fund into UK government bonds, or a UK pension fund might invest in shares on the Tokyo stock exchange.

Whilst it is desirable that students are aware that there is a wide variety of financial markets, they are only required to know the difference between the money market, the capital market and the foreign exchange market.

The money market

The money market is a financial market which provides short-term finance to individuals, firms (including banks and other financial institutions) and governments. Short-term debt may have a maturity ranging from 24 hours to perhaps 12 months, interbank lending and lending to the UK government through the purchase of Treasury bills are money market transactions

The capital market

The capital market provides medium and long-term finance to firms and governments. Companies may raise long-term finance by issuing shares or corporate bonds but they can also, for example, borrow from the banks. Governments issue bonds to finance their borrowing needs. The banks also raise money on capital markets to support their lending by issuing bonds. The capital market can be divided into the primary market, or new issue market, and the secondary market. The primary market is where newly issued securities are sold by companies and governments. Secondary markets trade previously issued or second-hand securities; the world’s stock exchanges are important institutions in secondary markets. The principal function of a secondary market is to increase the liquidity of second-hand securities, making it easier for buyers to manage their investments and sell their securities when required. This in turn makes it more likely that those with surplus funds will be willing to buy new issues of shares and bonds.

The foreign exchange market

The foreign exchange market is the market in which different currencies are bought and sold. International trade and international investment flows mean that economic agents will need to convert the funds they provide or receive from one currency to another, eg the pound sterling into euros or dollars. Foreign exchange can be traded on either the spot market or the forward market. Spot transactions involve the immediate exchange of foreign currency whereas forward markets involve the exchange of foreign currencies at some specified time in the future. Forward markets are used by, for example, exporters and importers to protect themselves against exchange rate risks. Foreign exchange markets are frequently subject to bouts of speculation.

b) Debt and equity capital

Students should understand the key differences between debt and equity. They should recognise that bonds are an example of debt capital and shares are an example of equity capital. Debt involves borrowing money that has to be paid back with interest whereas equity involves giving the provider of funds an ownership stake in the enterprise and a share of future profits. The interest on debt is a fixed cost for the business which has to be paid before profits are calculated and any dividends are paid to shareholders. Debt also includes the funds that firms borrow directly from banks and other financial institutions such as loans and overdrafts.

Both governments and large corporations issue bonds to raise finance. Governments issue bonds to finance the budget deficit, ie governments borrow when they are spending more than they receive from taxation. The value of government bonds outstanding at a point in time represents the majority of the national debt, ie the stock of government debt accumulated over the generations. UK government bonds are owned by both domestic and overseas residents. Corporate bonds are issued to finance investment and the expansion of the business. Many bonds pay a fixed rate of interest known as the coupon. The coupon is expressed as a percentage of the nominal value of the bond. Bonds are a form of marketable loan, ie they can be bought and sold in the secondary bond markets. The issuer of the bond is the debtor and the holder of the bond is the creditor. Bonds usually have a fixed maturity date, which is when the issuer of the bond, eg the government, will repay the bondholder the money borrowed.

c) Bond prices, market interest rates and yields

The yield on a bond is the annual interest payment, or coupon, expressed as a percentage of the market price of the bond. Assuming the coupon is a fixed annual amount, if the market price of the bond falls the yield will increase and if the price of the bond rises the yield will fall.

Example 1: Calculating the yield

A bond is issued with a nominal value of £100 and the annual coupon is £4. The bond has 40 years until it matures. Two years after the bond was issued, the market price of the bond falls to £80. Calculate the current yield on this bond.

Understanding why there is an inverse relationship between bond prices and market interest rates is a key element in understanding some of the channels through which Quantitative Easing (QE) can affect the real economy. A simple numerical example can help to illustrate this relationship.

Example 2: Illustrating the inverse relationship between market interest rates and bond prices

A bond is issued with a nominal value of £100 and the annual coupon is £6. When the bond was issued, it offered a return that was similar to other comparable securities, ie the market rate of interest was around 6%. Four years later, the market rate of interest has fallen to 3%. This bond will not mature for many years yet. Calculate the approximate market price of this bond.

The key to this calculation is to recognise that markets will ensure that the yields on securities that have identical degrees of risk will be very similar. In this case, the yield on the bond will fall to around 3% so that it matches the rate of return (yield) earned on other similar assets.

If the current market price was less than £200, investors would clamour to buy this bond since it would offer a higher rate of return than can be achieved on similar securities; the increase in demand would push up the price. If the current market price was more than £200, investors would not be willing to buy this bond since it would provide a lower rate of return than could be achieved on similar securities; bond holders would have to accept a lower price if they wished to sell their bonds.

Since the overall return on bonds depends on possible capital gains as well as current yields, in practice, fluctuations in bond prices are unlikely to be as large as suggested by this simple example. The time until maturity and expectations of future movements in interest rates, and hence bond prices, will affect the likelihood of capital gains and losses.

Students should be able to calculate the yield on securities and use a simple numerical example to illustrate why there is an inverse relationship between market interest rates and bond prices. They will not, however, be expected to take into account possible capital gains or losses. Nevertheless, teachers might wish to explore this issue to challenge the more able students.

d) Functions of money and the money supply

This topic is covered by most existing A-level textbooks. Students should recognise that money is an asset that can be used as a medium of exchange. They should understand the following functions of money:

• medium of exchange
• store of value
• measure of value
• standard of deferred payment

The last two functions in the list above are sometimes combined and called the ‘unit of account’ function.

Students should also be able to distinguish between the functions of money and the essential characteristics of money, such as money should be: portable, divisible, durable, limited in supply, acceptable and difficult to forge.

They should understand the role that money plays in a modern economy recognising that without the development of money, the improvements in living standards that have taken place, for example through specialisation, would not have been possible.

Whilst it is not essential that students have detailed knowledge of any particular definition of the money supply they do need to understand that deciding which assets should be included in a definition of the money supply is not easy. They should understand that the money supply is the existing stock of assets that are classified as money. They should be aware that there are narrow definitions of the money supply and broader definitions that include a wider range of assets,some of which may not be immediately available to use as a medium of exchange.

Students should recognise that a key reason why economists are interested in what is happening to the stock of money is because some economists believe that there is strong relationship between the growth in the money supply and the growth in nominal aggregate demand. However, the stability of this relationship is disputed. Also, there is disagreement over the extent to which changes in the stock of money lead to changes in aggregate demand or whether changes in aggregate demand drive changes in the stock of money. This links closely with section 4.2.3.3 of the specification that includes ‘Fisher’s equation of exchange MV = PQ and the Quantity Theory of Money in relation to the monetarist model’.

a) Commercial banks

Students should recognise that the commercial banks are the ‘high street banks’ and that they have three primary functions: accepting deposits, lending to economic agents and providing efficient means of payment. They should also be aware that, in addition, they fulfil a number of subsidiary functions such as providing foreign exchange and a variety of other financial services to customers. As a financial intermediary, commercial banks play a key role in channelling funds from economic agents who have surplus funds (lenders/savers) to those who can make use of those funds (borrowers). However, it should also be understood that when a bank gives a loan to a customer it creates an equivalent deposit, increasing the money supply. Banks do not just simply lend out money that has been deposited with them, they can also create money.

As private sector organisations, commercial banks are in business to make profits for their shareholders but they also need to be sufficiently liquid to meet the legitimate demands of their depositors. Failure to do so will lead to a run on the bank and the likely collapse of the business. However, there is a conflict between the aims of profitability and liquidity since, generally, liquid assets yield a lower rate of return than those which are more illiquid. The trade-off between security and profitability should also be understood, for example, secured loans, such as mortgages, are likely to be less profitable than unsecured loans. To some extent, the way in which banks manage risk and the trade-offs between the objective of profitability and the objectives of liquidity and security can be seen by looking at a typical commercial bank’s balance sheet.

On a balance sheet, total assets must equal total liabilities. Assets are the claims that a bank has against others and represent how the bank has used its funds. Liabilities are the claims that other people have on the bank and they show the source of the bank’s funds. Liabilities can be subdivided into ‘shareholders’ funds’ and money that the bank has borrowed from depositors or, for example, by issuing bonds. Shareholders’ funds are the bank’s capital and comprise the money that was received when shares were issued plus any retained profits. The following is a general representation of a typical commercial bank’s balance sheet:

Note: The capital of the bank (the shareholders’ funds) comprises issued share capital plus reserves.

The first four items on the asset side of the balance sheet are fairly liquid whereas investments and advances are less liquid but are generally much more profitable. Students should understand that banks have to manage their portfolio of assets to ensure that they can meet their customers’ demands for cash whilst also aiming to make a profit for their shareholders. They should also appreciate that banks generally borrow short term and lend long term. This puts them at risk because depositors, for example, may decide to withdraw their money but the bank cannot insist that the people to whom they have lent money, eg mortgage holders, repay immediately.

The most profitable of the banks’ assets are often the most risky. If a bank invests in assets which fall in value, eg because some customers default on their loans, this will result in losses and reduce the banks’ capital. If the reduction in the value of a bank’s assets is so large that it wipes out the whole of the bank’s capital, the bank is technically bankrupt and cannot continue trading.

In the example above, if the value of the bank’s assets falls by more than £20bn, its capital will be wiped out and it will be bankrupt.

Lending long term and borrowing short term means that banks are inherently unstable and a key role of a central bank is to maintain the stability of financial markets. One of the main ways in which they fulfil this function is by providing ‘liquidity insurance’, ie they act as ‘lender of last resort’ to the banks. However, this does not mean that the central bank will bail out a bank that has made bad investments and is making losses. Generally, the central bank will only act as lender of last resort to banks that are fundamentally sound but suffering from a temporary shortage of liquidity.

In summary, there are two fundamental reasons why a bank may fail:

• it suffers a fall in the value of its assets that is so large that its capital is wiped out, ie it becomes insolvent;
• it does not have sufficient liquidity to meet the legitimate demands of its depositors.

In many cases, banks fail when the value of their assets is falling and it is feared that they may become insolvent. In these circumstances, people and other institutions withdraw funds from the bank, ie there is a run on the bank. The bank usually fails because it runs out of liquidity before it becomes technically insolvent.

b) Investment banks

Nowadays, many banks carry out both commercial and investment banking activities but in response to the financial crisis, the authorities are introducing regulations designed to separate these activities. Following The Vickers Report, commercial banking (or retail banking) activities of the banks are to be ring fenced from their investment banking activities. Under current plans, ring fencing must be in place by 2019.

Students should have a basic knowledge of the types of activities in which investment banks are engaged. A key function of investment banks is to help companies raise finance by, for example, giving advice and helping to arrange new issues of shares and corporate bonds. A government that wishes to privatise a public sector enterprise is likely to employ an investment bank to help them. Firms planning a merger or a takeover will also turn to investment banks for advice regarding price, timing and tactics. The investment bank will charge a fee for providing these services. Investment banks are also involved in the secondary market; they buy and sell securities on behalf of clients but also on their own behalf. Buying and selling securities on their own behalf is known as ‘proprietary trading’ and is a risky activity. Other risky activities in which some investment banks are involved include commodity trading and dealing in foreign exchange. Investment banks are often market makers; they enable economic agents to buy and sell securities without using formal exchanges.

The growing tendency for banks to carry out both commercial and investment banking activities is believed by some to have contributed to the recent financial crisis but it wasn’t only the ‘universal banks’ who failed, eg Northern Rock was a commercial bank. ‘The Vickers Report’ recommended that the core functions of the retail or commercial banks should be ring fenced so that if a bank is failing, the situation is easier to manage and retail deposits can’t be used to subsidise ‘casino’ banking. This approach is an alternative to forcing the banks to choose between operating as either a commercial or an investment bank. Legislation to enforce complete separation was rejected because it was concluded that there are some significant benefits from allowing banks to diversify their activities. However, the 2013 Banking Reform Act gave the Prudential Regulation Authority (PRA – see below) the power to enforce full separation on individual banks if deemed necessary.

c) Credit creation

Students should understand that banks create credit by giving loans to their customers. Providing a loan, which is an asset to the bank, creates a corresponding liability for the bank in the form of a deposit in the customer’s account. A bank deposit is an asset for the bank’s customer and deposits can be transferred between customers using, for example, cheques, debit cards and standing orders. Bank deposits are both a store of value and a medium of exchange; they are the largest component of the money supply.

Candidates should understand that there are limits on a bank’s ability to create credit and these include: their holdings of capital and liquid assets, the demand for credit and the policy of the central bank. A central bank, such as the Bank of England, can affect the demand for credit by, for example, changing Bank Rate and it can also affect bank lending by changing required capital ratios (ie the amount of capital on a bank’s balance sheet as a proportion of its loans) and by altering the value of liquid assets the banks must keep. At present, the Bank of England does not attempt to control bank lending by fixing or changing reserve ratios such as the cash ratio or any other liquid assets ratio. However in the United States, the Federal Reserve does specify reserve requirements (liquidity ratios) with which the banks have to comply. In 2019, the ‘liquidity coverage ratio’, introduced as part of the Basle III agreement, will have to be implemented in the UK.

Whilst students should understand how capital and reserve ratios (liquidity ratios) affect a banks’ ability to create credit, they will not be required to calculate the ‘credit multiplier’. However, they should appreciate why, other things being equal, higher capital and reserve ratios (liquidity ratios) mean that banks’ ability to create credit is likely to be reduced. A simple numerical example may help to illustrate the principle. If a bank’s capital equals £3bn and it is required to maintain a capital to loans ratio of at least 10%, then the maximum value of the loans it can provide is £30bn. However, raising capital ratios may encourage banks to issue more shares, reduce dividends or limit bonuses rather than restrict lending. Other things being equal, if a bank acquires more capital or the capital ratio is reduced, the bank will be able to increase the value of loans it has on its books.

d) Other institutions operating in financial markets

Students are expected to be aware that there are other types of financial institution that operate in UK and global financial markets. However, they are not required to know their activities or functions. Such institutions include: insurance companies, pension funds, hedge funds and private equity companies. They should also be aware that the shadow banking sector supplies an increasing amount of credit to borrowers.

The shadow banking system includes financial intermediaries involved in the provision of credit across the global financial system, but who are not subject to regulatory oversight. The shadow banking system also includes the unregulated activities of regulated financial institutions. The volume of business carried out in the shadow banking system has grown substantially over the past 20 years and this is of concern to the authorities since the unregulated shadow banking system adds to systemic risk.

Teachers and students who are interested in the institutions in the shadow banking system and the assets traded, eg money market funds and securities (such as mortgage-backed securities), should easily be able to find relevant information on the Internet. The AQA specification does not require that students know about the activities of participants in the shadow banking system but they should be aware that such unregulated financial markets exist and that they increase the risk of financial crises developing.

a) The main functions of a central bank

Students should understand that a central bank has two key functions, ie to maintain financial stability and to help the government in maintaining macroeconomic stability. The provision of liquidity insurance, by acting as the lender of last resort, is crucial to the maintenance of financial security. However, achieving financial stability is also supported by other activities that a central bank undertakes, including monitoring and regulating financial institutions. Central banks use monetary policy to try to maintain macroeconomic stability but the achievement of macroeconomic stability is unlikely to be realised unless there is also financial stability. Recurrent crises in financial markets are likely to severely disrupt the real economy

As far as macroeconomic stability is concerned, students should know that the remit of the Bank of England is to deliver price stability, ie low inflation, and, subject to that, to support the government’s economic objectives including those for growth and employment. Price stability is defined by the government’s inflation target, currently 2% CPI. The remit emphasises the importance of price stability in achieving macroeconomic stability, and in providing the right conditions for sustainable growth in output and employment. Macroeconomic stability is, of course, also affected by the fiscal and supply-side policies

Students should also appreciate that the central bank carries out other related functions such as: controlling the note issue, acting as the bankers’ bank, acting as the government’s bank, buying and selling currencies to influence the exchange rate, and liaising with overseas central banks and international organisations. The Bank’s role as banker to the government has been significantly reduced; since May 1998 the Debt Management Office (DMO) has issued gilts on behalf of the Treasury and in 2000, the DMO took over responsibility for issuing Treasury bills and managing the government’s short-term cash needs

b) Monetary policy

The aims and operation of monetary policy have always been an important part of A-level Economics specifications and are included in the standard A-level text books. This Teacher Guide does not aim to repeat what is covered thoroughly elsewhere. However, monetary policy has evolved since the previous specification and many of the A level textbooks were written. Many of the changes have been prompted by the financial crisis and the reliance that has placed on monetary policy to get the economy growing again.

The specification states that ‘Students should understand recent instruments of monetary policy such as: quantitative easing, Funding for Lending and forward guidance’. It is inevitable that monetary policy will continue to involve and it is important that teachers and students keep up to date with any significant developments. Adjustments in Bank Rate, designed to influence short-term interest rates, will remain the most important instrument of monetary policy but students should understand the reasons for the introduction of so-called unconventional monetary policy measures such as the Asset Purchase Scheme, ie quantitative easing. They should also understand how QE and other monetary measures are likely to affect the real economy. The Bank of England provides a variety of resources, many of which are listed at the end of this Teacher Guide, that explain the channels through which such measures are expected to influence the economy.

c) How the Bank of England affects the money supply

It should be understood that the Bank does not target the rate of growth of the money supply. However, the growth of money and credit can provide an important indicator of the current and future path of the economy. If the stock of money is growing too rapidly or the amount of credit is expanding too fast, this may indicate that inflation is likely to accelerate and/or that a potentially dangerous rise in asset prices, a speculative bubble, is on the horizon. A contraction in the stock of money and a reduction in the ability of economic agents to access credit can drive an economy into recession, possibly resulting in deflation.

Policies adopted by the Bank can affect the rate of growth of both narrow and broad money and the supply of credit. Changes in interest rates will affect people’s willingness to borrow, this will affect bank lending and hence the stock of money. QE tends to reduce long-term interest rates and increases the commercial banks’ holdings of balances at the Bank of England, affecting the banks’ ability to create credit. The Funding for Lending Scheme provides an incentive for the banks to lend more to business by reducing the banks’ cost of borrowing, allowing them to lend more cheaply to firms. If banks are required to increase their capital or liquidity ratios, other things being equal, this is likely to reduce bank lending and thus the growth of the money supply.

As stated above, providing liquidity insurance is a crucial element in helping a central bank to achieve its objective of financial stability. This was recognised by the eminent Victorian writer and journalist Walter Bagehot.

Walter Bagehot’s dictum has been quoted as, ‘To avert panic, central banks should lend early and freely (without limit), to solvent firms, against good collateral, and at high rates’.

In the context of the UK economy, when the Bank of England acts as lender of last resort, its lending to the banks is usually secured against high quality assets and they are charged a minimum of Bank Rate in market-wide operations, and a premium over Bank Rate for support to individual institutions. This means that the banks will only want to access emergency lending from the Bank of England if they can’t obtain the funds they need from elsewhere, eg by borrowing on the interbank market. A penal rate of interest, above Bank Rate, is charged for liquidity provided to a distressed bank.

It should be appreciated the lender-of-last-resort function can be divided into:

• the routine provision of liquidity from the central bank that is on-going throughout the year and designed to offset the regular ebb and flow of money in and out of the banking system
• the emergency provision of liquidity to a bank that has cash flow problems
• the emergency provision of liquidity to financial markets when there is a systemic problem such as during the 2008 – 09 credit crunch.

The Bank of England also helps to regulate financial markets and this is another key part of its approach to maintaining financial security.

a) Regulation of the financial system in the UK

In 1986, Margaret Thatcher’s government began the process of deregulating financial markets by introducing a policy that is known as ‘Big Bang’. London was becoming uncompetitive and losing business to other financial centres. The policy was introduced to arrest the decline in London as a financial centre and was successful in revitalising financial institutions and markets located in the capital. The policy of deregulation was augmented by the Labour government that was elected in 1997. However, the policy of ‘light touch regulation of financial markets’, that was adopted by most countries around the world, has been blamed for the recent financial crisis. This has led to a reversal of policy with, for example, the passing of the Dodd-Frank Act (2010) in the USA and the Financial Services Act (2012) in the UK

The Financial Services Act strengthened the role of the Bank of England in regulating the financial system. It established the Financial Policy Committee (FPC) and the Prudential Regulation Authority (PRA), both of which are part of the Bank of England. It also set up the Financial Conduct Authority (FCA) which works in conjunction with the FPC and PRA but the FCA is not part of the Bank. Students should understand the role of each of these institutions in achieving financial stability, as outlined below.

The FPC is primarily responsible for macroprudential regulation whereas the PRA and FCA are mainly responsible for microprudential regulation.

Macroprudential regulation is concerned with identifying, monitoring and acting to remove risks that affect the stability of the financial system as a whole.

Microprudential regulation focuses on ensuring the stability of individual banks and other financial institutions; it involves identifying, monitoring and managing risks that relate to individual firms.

The Financial Policy Committee (FPC)

The independent FPC was formally established on 1 April 2013, although an interim FPC first met in 2011. The primary objective of the committee is to identify, monitor and take action to remove or mitigate systemic risks to the UK financial system. Its secondary objective is to support the economic policy of the government. Systemic risks are those which could trigger the collapse of the whole, or a significant part, of the financial system. When the financial crisis hit the world economy, it was judged that if some banks collapsed it would generate a run on other banks; the problems would spread with devastating consequences. Such banks were judged to be ‘too big to fail’. It is the role of the FPC to identify such risks and to take action to make the system more resilient to shocks. The FPC has two main powers: it can issue mandatory directions to the PRA and the FCA, and it can make recommendations to anyone, including the government. It has the power to make comply-or-explain recommendations to the PRA and FCA.

The Prudential Regulation Authority (PRA)

The PRA is responsible for the supervision of banks, building societies, credit unions, insurers and major investment firms. It sets standards and supervises financial institutions at the level of the individual firm. The PRA regulates by setting standards which financial institutions are required to follow and supervises by assessing the risks posed by individual financial firms and taking action to make sure they are managed properly. It aims to promote the soundness of banks and other firms providing financial services so that the stability of the UK financial system is enhanced. The PRA may require individual institutions to maintain specified capital and liquidity ratios. However, the PRA does not seek to operate a ‘zero-failure’ regime. Instead, the PRA tries to ensure that if a financial firm fails it does so in a way that avoids significant disruption to essential financial services.

The Financial Conduct Authority (FCA)

The aim of the FCA is to protect consumers, to promote competition between the providers of financial services and to maintain a stable, resilient financial services industry. The FCA uses its rule-making, investigative and enforcement powers to protect consumers and to regulate the financial services industry.

b) Bank failures, liquidity assurance and moral hazard

The regulation of the banks includes the establishment of minimum liquidity and capital ratios. At an international level, these requirements are based on the recommendations of the Basel Committee. In Europe, a directive has been issued (CRD IV) that enshrines the latest Basle III recommendations into law.

If banks do not have sufficient capital, they are at risk from a fall in the value of their assets. Insufficient liquidity makes them vulnerable to a run on the bank which can cause a bank to fail, even if its assets are greater than its liabilities. The willingness of the central bank to act as lender of last resort and provide liquidity insurance increases confidence in the stability of the banks. It is necessary because the banks borrow short term but lend long term.

However, central bank support for financial institutions and government bailouts can result in banks taking too many risks because they believe that the authorities will not allow them to fail. Moral hazard exists when one economic agent decides how much risk to take in the knowledge that if things go wrong, someone else will bear a significant portion of the cost. Investing in high risk assets can lead to high profits and unless there is the possibility that financial institutions will be allowed to fail, there is insufficient incentive to act prudently. Regulations imposed on the banks are designed to limit their ability to act recklessly and other measures, such as imposing a firewall between the commercial and investment activities of the banks, should mean that the more risky parts of the banks can be allowed to fail without impairing the indispensable provision of vital financial services.

c) Systemic risk, financial instability and the real economy

Students should recognise that this topic links very closely with a number of other parts of the specification. For example, when responding to a question on the causes of cyclical instability, they might be expected to analyse the impact of financial instability on growth, employment and price stability. However, they should appreciate that financial instability is not the only cause of cyclical instability. Nevertheless there is a lot of evidence to suggest that a recovery from a financial crisis usually takes much longer than from a recession that is not accompanied by major problems in financial markets.

Students should appreciate that financial crises often occur after a prolonged period of prosperity. Low interest rates, easy credit and rising asset prices are accompanied by high levels of debt and overconfidence. A crisis can be fuelled by destabilising speculation whereby people buy assets in the anticipation of future capital gains that are not justified by the ‘real worth’ of the assets. Financial institutions may support such speculation by reckless lending. Herding behaviour can lead to asset price bubbles followed by a collapse in asset prices.

A fall in asset prices contributes to a generalised recession in a number of ways. If the value of the assets held by a financial institution falls, the loss in value of these assets leads to an equivalent reduction in the capital base of the institution. In the good times, excessive and risky lending by banks meant that when the economy slows down some loans will not be repaid and some other assets held by the banks, eg mortgage-backed securities, will fall in value. This erosion in their capital base, resulting from the fall in the value of their assets, is also likely to be accompanied by liquidity problems. As a result, they are forced to restrict their lending and interest rates will rise, ie there is a credit crunch. Restricted bank lending will lead to lower aggregate demand as investment and household consumption falls. The fall in asset prices also affects confidence and reduces household wealth, intensifying the fall in aggregate demand. If households have large debts, built up during the time of prosperity, when the economy starts to contract, households are likely to try to reduce their indebtedness. They attempt to save more and pay off debts rather than take out additional loans. In this context, some teachers might wish to introduce their students to the ideas of Hyman Minsky. A web link to an Analysis programme broadcast by BBC Radio 4 is included in the resources section of this document.

The likelihood that financial instability will result in economic instability is a fundamental reason why governments around the world have tightened the regulations with which financial institutions have to comply. It should be recognised that what might initially appear to be relatively minor problem in one part of the global financial market can very easily spread and lead to a much more serious situation. It is generally, but not universally, agreed that financial institutions should be subject to a much stricter regulatory regime than existed in the lead up to the 2007-08 financial crisis. The inherent risks in the financial sector and the importance of financial institutions for the efficient functioning of an economy mean that problems affecting financial markets can be very damaging. If banks have to be bailed out by the government, the cost to the taxpayer is very high. Central banks provide liquidity insurance to the banking sector and the acceptance of regulation can be regarded as way of moderating the moral hazard that results.

However, students should understand that regulation is not without its problems; there is always the danger of regulatory capture, it might stifle innovation, restrict the supply of credit to economic agents who could make good use of additional funding and lead to rapid growth in an unregulated shadow banking sector

The specification states that ‘teachers should provide students with the opportunity to explore the disagreements that exist between economists and current economic controversies’. Students might wish to consider the free-market view that state intervention has more costs than benefits compared to a world in which markets operate without any intervention. In this context, they could be introduced the ideas of economists of the Austrian school such as Friedrich Hayek and Ludwig Von Mises. Austrian economists believe that it is intervention in financial markets, including the central bank action to manipulate interest rates, which causes financial crises. Such economists believe that markets should be allowed to allocate financial resources and that any form of intervention is likely to be harmful. According to this view, the reason why problems arise is not because markets don’t work but because state intervention does not allow markets to work properly.

Most of the existing A-level textbooks provide some useful coverage of this area but are generally out of date. However, Hodder published a 2nd Edition of Ray Powell’s AS and A2 Economics textbook in 2014, and the following are both useful:

AQA AS Economics (2nd Ed), R Powell, Chapter 23

AQA A2 Economics (2nd Ed), R Powell, Chapter 18

The new textbooks that are due to be published in 2015 to accompany the AQA Economics specification will include up-to-date sections on ‘Financial markets and monetary policy’. There is also a wide range of other resources available on the internet, and the Bank of England website is a particularly useful source.

Accessible books

Two books written by Philip Coggan, who is currently the Buttonwood columnist for The Economist, will be accessible to most A-level students. They are published by Penguin as paperbacks and Kindle versions are available to download.

• Paper Promises – Money, Debt and the New World
• The Money Machine – How the City Works

Two books that provide a more formal and detailed coverage of the area are:

• An Introduction to Global Financial Markets by Stephen Valdez and Philip Molyneux
• The FT Guide to Financial Markets by Glen Arnold

Some students and teachers might want to dip into these two books to develop and extend their knowledge of financial markets but, whilst they are not overly complex, they go well beyond what is required by the AQA specification.

Pamphlets and articles

Bank of england.

• Your money and the financial system : This is an invaluable little booklet that provides an excellent summary of many of the topics. Hard copies can be obtained by emailing the bank.
• Postcards from the Bank of England : These postcards provide brief overview of some aspects of the Bank’s work and the role of financial markets. Hard copies can be obtained by emailing the bank.
• Bank of England market operations guide : This online guide explains in more detail how and why the Bank of England operate in markets, and how their operations work in practice.
• Quarterly Bulletin : This document is too detailed for the majority of A-level students although some may find that reading parts of it is worthwhile. Some teachers will also find it very useful.
• How monetary policy works : This provides a useful overview of monetary policy.
• Liquidity insurance : This provides an explanation of ways in which the Bank fulfils its role as lender of last resort. There is further detail in the ‘red book’ mentioned earlier. However, it should be noted that students are not expected to know the different ways in which the Bank provides liquidity, eg they do not need to know the difference between the Discount Window Facility and the Contingent Term Repo Facility.
• There are a number of other useful pages that are easily accessible from the home page of the Bank of England website .

The Bank of England has its own YouTube channel . This is regularly updated and will include, for example, the latest quarterly inflation report webcast. Examples of other video clips that teachers will find particularly useful are:

• Money in the modern economy – an introduction
• Money creation in a modern economy
• Quantitative easing – how it works

Federal Reserve

The Federal Reserve also has its own YouTube channel .

The previous chairman of the Federal Reserve Bank, Ben Bernanke, gave a series of four lectures to students at Washington State University. The first 20 minutes of the first lecture focuses on the key functions of a central bank and provides an excellent introduction to the topic for A-level students. The lecture series lasts about 5 hours and there is unlikely to be enough time to show all four programmes. However, as with some of the other resources listed above, many teachers and some students will enjoy listening to the lectures. They cover:

• the history of central banking
• a brief history of the great depression and the post WW2 economy
• the great moderation
• the lead up to the financial crisis
• the response of the US authorities to the financial crisis.

Links to each of these talks is given below:

• Lecture 1 The Federal Reserve and the Financial Crisis Part 1
• Lecture 2 The Federal Reserve and the Financial Crisis Part 2
• Lecture 3 The Federal Reserve and the Financial Crisis Part 3
• Lecture 4 The Federal Reserve and the Financial Crisis Part 4

If you search YouTube, you will of course find many other clips that can be used in the classroom.

BBC Radio Podcasts

Analysis on BBC Radio 4 has produced a number of programmes on economics related topics .

One programme that may be of particular interest is ‘Why Minsky matters’ . Since the financial crisis the ideas of Hyman Minsky have become very influential, and this programme provides a summary of his key ideas.

Other web links

This New Economics Foundation blog on money creation provides a commentary on how banks create credit and has a link to a book entitled Where does money come from , first published in 2011.

Useful statistics

Some teachers might want to provide up-to-date statistics for their students or set research tasks for homework. The following are examples of useful sources of macroeconomic and financial data:

• The Bank of England online database , where data on M0, interest rates, exchange rates and much else can be downloaded.
• ONS data on the economy

For international data, the OECD and IMF have good and comprehensive online databases.

There are also useful introductions to the ideas of Austrian economists and Hyman Minsky , providing two different perspectives on financial markets and their significance for the macroeconomy.

Document URL https://www.aqa.org.uk/resources/economics/as-and-a-level/economics/teach/teaching-guide-financial-markets-and-monetary-policy

Last updated 15 Aug 2019

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What Are Financial Markets?

• Understanding Financial Markets

Types of Financial Markets

Examples of financial markets, the bottom line, financial markets: role in the economy, importance, types, and examples.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

Financial markets refer broadly to any marketplace where securities trading occurs, including the stock market, bond market, forex market, and derivatives market. Financial markets are vital to the smooth operation of capitalist economies.

Key Takeaways

• Financial markets refer broadly to any marketplace where the trading of securities occurs.
• There are many kinds of financial markets, including (but not limited to) forex, money, stock, and bond markets.
• These markets may include assets or securities that are either listed on regulated exchanges or trade over-the-counter (OTC).
• Financial markets trade in all types of securities and are critical to the smooth operation of a capitalist society.
• When financial markets fail, economic disruption, including recession and rising unemployment, can result.

Investopedia / Theresa Chiechi

Understanding the Financial Markets

Financial markets play a vital role in facilitating the smooth operation of capitalist economies by allocating resources and creating liquidity for businesses and entrepreneurs. The markets make it easy for buyers and sellers to trade their financial holdings. Financial markets create securities products that provide a return for those with excess funds (investors/lenders) and make these funds available to those needing additional money (borrowers). 

The stock market is just one type of financial market. Financial markets are created when people buy and sell financial instruments, including equities, bonds, currencies, and derivatives. Financial markets rely heavily on informational transparency to ensure that the markets set prices that are efficient and appropriate.

Some financial markets are small with little activity, and others, like the  New York Stock Exchange (NYSE) , trade trillions of dollars in securities daily. The equities (stock) market is a financial market that enables investors to buy and sell shares of publicly traded companies. The primary stock market is where new issues of stocks are sold. Any subsequent trading of stocks occurs in the secondary market, where investors buy and sell securities they already own.

Prices of securities traded in the financial markets may not necessarily reflect their intrinsic value.

There are several different types of markets. Each one focuses on the types and classes of instruments available on it.

Stock Markets

Perhaps the most ubiquitous of financial markets are stock markets. These are venues where companies list their shares, which are bought and sold by traders and investors. Stock markets, or equities markets, are used by companies to raise capital and by investors to search for returns.

Stocks may be traded on listed exchanges, such as the New York Stock Exchange (NYSE), Nasdaq , or the over-the-counter (OTC) market. Most stock trading is done via regulated exchanges, which plays an important economic role because it is another way for money to flow through the economy.

Typical participants in a stock market include (both retail and institutional) investors, traders, market makers (MMs) , and specialists who maintain liquidity and provide two-sided markets. Brokers are third parties that facilitate trades between buyers and sellers but who do not take an actual position in a stock.

Over-the-Counter Markets

An over-the-counter (OTC) market is a decentralized market—meaning it does not have physical locations, and trading is conducted electronically—in which market participants trade securities directly (meaning without a broker). While OTC markets may handle trading in certain stocks (e.g., smaller or riskier companies that do not meet the listing criteria of exchanges), most stock trading is done via exchanges. Certain derivatives markets, however, are exclusively OTC, making up an essential segment of the financial markets. Broadly speaking, OTC markets and the transactions that occur in them are far less regulated, less liquid, and more opaque.

Bond Markets

A bond is a security in which an investor loans money for a defined period at a pre-established interest rate. You may think of a bond as an agreement between the lender and borrower containing the loan's details and its payments. Bonds are issued by corporations as well as by municipalities, states, and sovereign governments to finance projects and operations. For example, the bond market sells securities such as notes and bills issued by the United States Treasury. The bond market is also called the debt, credit, or fixed-income market.

Money Markets

Typically, the money markets trade in products with highly liquid short-term maturities (less than one year) and are characterized by a high degree of safety and a relatively lower interest return than other markets.

At the wholesale level, the money markets involve large-volume trades between institutions and traders. At the retail level, they include money market mutual funds bought by individual investors and money market accounts opened by bank customers. Individuals may also invest in the money markets by purchasing short-term certificates of deposit (CDs) ,  municipal notes , or U.S. Treasury bills, among other examples.

Derivatives Markets

A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset (like a security) or set of assets (like an index). Rather than trading stocks directly, a derivatives market trades in futures and options contracts and other advanced financial products that derive their value from underlying instruments like bonds, commodities, currencies, interest rates, market indexes, and stocks.

Futures markets are where futures contracts are listed and traded. Unlike forwards, which trade OTC, futures markets utilize standardized contract specifications, are well-regulated, and use clearinghouses to settle and confirm trades. Options markets, such as the Chicago Board Options Exchange (Cboe) , similarly list and regulate options contracts. Both futures and options exchanges may list contracts on various asset classes, such as equities, fixed-income securities, commodities, and so on.

Forex Market

The forex (foreign exchange) market is where participants can buy, sell, hedge, and speculate on the exchange rates between currency pairs . The forex market is the most liquid market in the world, as cash is the most liquid of assets. The currency market handles more than $7.5 trillion in daily transactions, more than the futures and equity markets combined.

As with the OTC markets, the forex market is also decentralized and consists of a global network of computers and brokers worldwide. The forex market is made up of banks, commercial companies, central banks, investment management firms, hedge funds, and retail forex brokers and investors.

Commodities Markets

Commodities markets are venues where producers and consumers meet to exchange physical commodities such as agricultural products (e.g., corn, livestock, soybeans), energy products (oil, gas, carbon credits), precious metals (gold, silver, platinum), or "soft" commodities (such as cotton, coffee, and sugar). These are known as spot commodity markets, where physical goods are exchanged for money.

However, the bulk of trading in these commodities takes place on derivatives markets that utilize spot commodities as the underlying assets. Forwards, futures, and options on commodities are exchanged both OTC and on listed exchanges around the world, such as the Chicago Mercantile Exchange (CME) and the  Intercontinental Exchange (ICE) .

Cryptocurrency Markets

Thousands of cryptocurrency tokens are available and traded globally across a patchwork of independent online crypto exchanges . These exchanges host digital wallets for traders to swap one cryptocurrency for another or for fiat monies such as dollars or euros.

Because most crypto exchanges are centralized platforms, users are susceptible to hacks or fraudulent activity. Decentralized exchanges are also available that operate without any central authority. These exchanges allow direct peer-to-peer (P2P) trading without an actual exchange authority to facilitate the transactions. Futures and options trading are also available on major cryptocurrencies.

The above sections make clear that the "financial markets" are broad in scope and scale. To give two more concrete examples, we will consider the role of stock markets in bringing a company to IPO and the role of the OTC derivatives market in the 2008-09 financial crisis.

Stock Markets and IPOs

As a company establishes itself over time and grows, it needs access to additional capital. It will often find itself in need of much larger amounts of capital than it can get from ongoing operations, traditional bank loans, or venture and angel funding. Firms can raise the amount of capital they need by selling shares of itself to the public through an initial public offering (IPO). This changes the company's status from a "private" firm whose shares are held by a few shareholders to a publicly traded company whose shares will be subsequently held by public investors.

The IPO also offers early investors in the company an opportunity to cash out part of their stake, often reaping very handsome rewards in the process. Initially, the underwriters usually set the IPO price through their pre-marketing process.

Once the company's shares are listed on a  stock exchange , and trading commences, the price of these shares will fluctuate as investors and traders assess and reassess their intrinsic value and the supply and demand for those shares at any given moment.

OTC Derivatives and the 2008 Financial Crisis: MBS and CDOs

While the 2008-09 financial crisis was caused and made worse by several factors, one factor that has been widely identified is the market for mortgage-backed securities (MBS) . These are OTC derivatives where cash flows from individual mortgages are bundled, sliced up, and sold to investors. The crisis resulted from a sequence of events, each with its own trigger—these events culminated in the banking system's near-collapse. It has been argued that the seeds of the crisis were sown as far back as the 1970s with the Community Development Act, which required banks to loosen their credit requirements for lower-income consumers, creating a market for  subprime mortgages .

The amount of subprime mortgage debt guaranteed by  Freddie Mac  and  Fannie Mae continued to expand into the early 2000s when the Federal Reserve Board began to cut interest rates drastically to avoid a recession. The combination of loose credit requirements and cheap money spurred a housing boom, which drove speculation, pushing up housing prices and creating a real estate bubble. In the meantime, the investment banks, looking for easy profits in the wake of the  dotcom bust  and the 2001 recession, created a type of MBS called  collateralized debt obligations (CDOs) from the mortgages purchased on the secondary market.

Because subprime mortgages were bundled with prime mortgages, there was no way for investors to understand the risks associated with the product. When the market for CDOs began to heat up, the housing bubble that had been building for several years finally burst. As housing prices fell, subprime borrowers began to default on loans that were worth more than their homes, accelerating the decline in prices.

When investors realized the MBS and CDOs were worthless due to the toxic debt they represented, they attempted to unload the obligations. However, there was no market for the CDOs. The subsequent cascade of subprime lender failures created liquidity  contagion  that reached the upper tiers of the banking system. Two major investment banks, Lehman Brothers and Bear Stearns, collapsed under the weight of their exposure to subprime debt, and more than 450 banks failed over the next five years. Several major banks were on the brink of failure and were rescued by a taxpayer-funded bailout.

What Are the Different Types of Financial Markets?

Some examples of financial markets and their roles include the stock market, the bond market, forex, commodities, and the real estate market, among others. Financial markets can also be broken down into capital markets, money markets, primary vs. secondary markets, and listed vs. OTC markets.

How Do Financial Markets Work?

Despite covering many different asset classes and having various structures and regulations, all financial markets work essentially by bringing together buyers and sellers in some asset or contract and allowing them to trade with one another. This is often done through an auction or price-discovery mechanism.

What Are the Main Functions of Financial Markets?

Financial markets exist for several reasons, but the most fundamental function is to allow for the efficient allocation of capital and assets in a financial economy. By allowing a free market for the flow of capital, financial obligations, and money, the financial markets make the global economy run more smoothly while allowing investors to participate in capital gains over time.

Financial markets provide liquidity, capital, and participation that are essential for economic growth and stability. Without financial markets, capital could not be allocated efficiently, and economic activity such as commerce and trade, investments, and growth opportunities would be greatly diminished.

Many players make markets an essential part of the economy—firms use stock and bond markets to raise capital from investors. Speculators look to various asset classes to make directional bets on future prices. At the same time, hedgers use derivatives markets to mitigate various risks, and arbitrageurs seek to take advantage of mispricings or anomalies observed across various markets. Brokers often act as mediators that bring buyers and sellers together, earning a commission or fee for their services.

Compare Forex Brokers. " Forex Trading Statistics ."

Federal Deposit Insurance Corporation. " Origins of the Crisis ," Page 1-6.

Federal Reserve Bank of St. Louis. " Federal Funds Effective Rate (FEDFUNDS) ."

Federal Deposit Insurance Corporation. " Bank Failures in Brief – Summary 2001 Through 2022 ."

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Finance Essay Topics

Step Up Your Game with These 200 Unique Finance Essay Topics

12 min read

Published on: May 7, 2023

Last updated on: Jan 31, 2024

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Do you find yourself struggling to come up with a compelling topic for your finance essay? Are you feeling overwhelmed by the complex landscape of financial markets and policies?

If so, don't worry – you're not alone!

Choosing the right topic is crucial for the success of your essay. You need to find a problem that is both relevant and interesting, and that you can feasibly research and analyze. 

But with so many potential topics to choose from, where do you even start?

That's where we come in!

In this blog, we'll provide you a variety of finance essay topics that will help you stand out from the crowd. 

We'll also provide you with tips to polish your ideas, so you can craft a truly compelling essay.

So, let's dive into the fascinating world of finance essay topics and discover new insights together!

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Corporate Finance Essay Topics 

If you are interested in how companies manage their financial resources, corporate finance may be the field for you. 

Here are essay topics related to corporate finance:

• Analyzing the impact of dividend policies on shareholder value
• Evaluating the use of financial derivatives to manage corporate risk
• Assessing the impact of mergers and acquisitions on firm performance
• Investigating the role of corporate governance in preventing financial scandals
• Analyzing the relationship between corporate social responsibility and financial performance
• Examining the effects of financial distress on corporate decision-making
• Evaluating the impact of exchange rate fluctuations on multinational corporations
• Assessing the effectiveness of performance-based compensation for CEOs
• Analyzing the impact of technological innovation on corporate financial performance
• Investigating the effectiveness of financial forecasting models for strategic decision-making

Personal Finance Essay Topics 

Managing personal finances can be challenging, especially in today's economy. Check out these personal finance essay topics:

• Analyzing the impact of credit scores on loan approval rates
• Evaluating the effectiveness of budgeting tools and apps for personal finance management
• Investigating the impact of financial literacy on retirement planning
• Analyzing the benefits and drawbacks of using a financial advisor
• Assessing the effectiveness of debt consolidation strategies for managing multiple loans
• Examining the impact of rising healthcare costs on retirement planning
• Evaluating the effectiveness of online investment platforms for small investors
• Analyzing the impact of financial stress on mental health
• Investigating the effectiveness of online personal finance courses for improving financial literacy
• Assessing the impact of tax policies on personal savings rates

Banking and Finance Essay Topics 

• The role of central banks in managing monetary policy
• The impact of Basel III on banking regulation
• The effectiveness of risk management in commercial banks
• The effects of bank mergers and acquisitions on competition
• The relationship between credit risk and profitability in banking
• The role of fintech in transforming the banking industry
• The impact of financial innovation on banking operations
• The impact of non-performing loans on banking stability
• The challenges of bank regulation in the digital age

Business Finance Essay Topics

• The impact of leverage on firm performance
• The role of financial ratios in evaluating business performance
• The effects of working capital management on profitability
• The impact of dividend policy on shareholder value
• The relationship between corporate governance and financial performance
• The role of venture capital in financing new businesses
• The challenges of international business finance
• The effects of trade credit on small business financing
• The impact of intellectual property on business valuation
• The role of microfinance in supporting small businesses  

Public Finance Essay Topics

• The role of government in promoting economic growth
• The impact of taxation on income inequality
• The effects of fiscal policy on aggregate demand
• The role of public-private partnerships in infrastructure finance
• The impact of government debt on economic stability
• The challenges of financing social security systems
• The role of subsidies in promoting renewable energy
• The impact of globalization on public finance
• The challenges of public finance in developing countries
• The impact of climate change on public finance

Accounting and Finance Essay Topics 

• The impact of financial reporting on investor decisions
• The role of accounting standards in financial reporting
• The effects of fair value accounting on financial statements
• The relationship between corporate governance and financial reporting quality
• The impact of financial statement analysis on investment decisions
• The challenges of auditing in the digital age
• The role of forensic accounting in fraud detection
• The impact of tax accounting on corporate finance
• The challenges of accounting for intangible assets
• The effects of accounting regulations on multinational corporations

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International Finance Essay Topics 

• The impact of exchange rate volatility on international trade
• The role of international financial institutions in promoting economic development
• The effects of capital flows on emerging market economies
• The impact of currency manipulation on trade balance sheets
• The relationship between foreign direct investment and economic growth
• The challenges of cross-border banking regulation
• The role of international capital markets in financing global infrastructure
• The impact of trade policies on international finance
• The effects of globalization on international financial stability
• The role of sovereign wealth funds in global finance

Behavioral Finance Essay Topics

If you are interested in this field, consider exploring these essay topics:

• Analyzing the impact of herd behavior on stock market bubbles
• Evaluating the effectiveness of financial education in reducing cognitive biases
• Investigating the impact of overconfidence on investment decision-making
• Analyzing the role of emotions in financial decision-making
• Assessing the impact of loss aversion on portfolio management
• Examining the effects of framing on financial decision-making
• Evaluating the effectiveness of behavioral finance theories in predicting market trends
• Analyzing the impact of social norms on financial decision-making
• Investigating the effectiveness of nudges in promoting financial well-being
• Assessing the impact of cultural differences on behavioral finance

Healthcare Finance Essay Topics 

• The impact of healthcare financing on access to healthcare services
• Healthcare cost control strategies and their effectiveness in improving healthcare quality
• Analyzing the role of health insurance in healthcare financing
• The relationship between healthcare financing and health outcomes
• The effect of healthcare financing on health inequalities
• The role of public-private partnership (ppp) in healthcare financing
• The impact of healthcare financing on technological advancements in healthcare sector
• Healthcare financing policies in addressing the burden of non-communicable diseases 
• The relationship between healthcare financing and social protection
• The role of healthcare financing in achieving universal health coverage

Good Finance Essay Topics

• The impact of the gig economy on personal finance management
• The role of technology in shaping the future of finance
• Analyzing the ethics of tax avoidance and tax evasion in the corporate world
• The importance of financial education in modern society
• A comparative analysis of the effectiveness of traditional and digital banking systems
• The role of behavioral finance in shaping investment strategies
• The impact of social media on the stock market
• Analyzing the ethical dilemmas of investment banking
• The role of financial institutions in promoting economic growth and development
• A critical analysis of the effectiveness of microfinance in poverty alleviation

Finance Paper Topics

• The impact of corporate social responsibility on financial performance
• The role of financial regulation in preventing another global financial crisis
• The impact of inflation on the stock market
• Analyzing the financial implications of climate change
• The effectiveness of alternative financing methods for small businesses
• The impact of political instability on international finance
• Analyzing the effectiveness of crowdfunding platforms
• The role of credit rating agencies in the financial market
• The impact of e-commerce on the retail banking industry
• A comparative analysis of the financial performance of publicly traded and privately held companies

Finance Essay Questions

Looking for some interesting finance essay questions to explore new ideas? Check them out:

• How does the stock market reflect the state of the economy?
• What are the ethical implications of insider trading?
• How do interest rates affect the global economy?
• What are the advantages and disadvantages of investing in the stock market?
• How has technology transformed the financial services industry?
• What is the impact of globalization on international finance?
• How can financial institutions promote financial inclusion and literacy?
• What are the challenges of managing personal finances in today's society?
• How can behavioral finance concepts be applied to investment strategies?
• What are the key factors that contribute to financial market instability?

Finance Argumentative Essay Topics

• Should governments regulate cryptocurrency?
• Is it ethical for companies to use tax loopholes to avoid paying their fair share?
• Should banks be held responsible for the global financial crisis of 2008?
• Is the current student loan system fair to borrowers?
• Should there be limits on CEO salaries in the finance industry?
• Is insider trading ever justified?
• Should the government provide free financial education to the public?
• Is the stock market an accurate reflection of the economy as a whole?
• Should high-frequency trading be allowed?
• Is it ethical for companies to invest in environmentally harmful industries?

Financial Related Essay Topics

• The importance of financial planning for a secure financial future
• Efficient market hypothesis and its implications for investment decision making
• The impact of globalization on financial markets and the economy
• An analysis of the impact of interest rates on the housing market
• The role of financial institutions in promoting economic growth
• The ethics of corporate finance and its impact on corporate social responsibility
• The role of central banks in regulating the economy
• The impact of financial regulation on the banking sector
• The role of financial markets in facilitating international trade

Research Topics in Finance

• An analysis of the impact of exchange rate fluctuations on international trade
• The effectiveness of credit rating agencies in predicting corporate default risk
• The impact of corporate governance on firm performance
• An analysis of the impact of financial innovation on the banking sector
• The relationship between dividend policy and firm value
• The role of financial intermediaries in promoting entrepreneurship
• The impact of insider trading on stock prices
• The impact of political instability on financial markets
• The role of microfinance in promoting financial inclusion
• An analysis of the impact of corporate social responsibility on firm performance

Financial Crisis Research Paper Topics

Let's delve into the world of finance and crisis with these topics!

• The causes of the 2008 financial crisis and its impact on the global economy
• An analysis of the regulatory failures that led to the 2008 financial crisis
• The role of the housing market in the 2008 financial crisis
• The impact of the 1997 Asian financial crisis on emerging economies
• The impact of the European sovereign debt crisis on the Eurozone economy
• The role of financial institutions in the 2011 European debt crisis
• The impact of the 2020 COVID-19 pandemic on the global economy
• Troubled Asset Relief Program (TARP) in stabilizing the US financial system 
• The impact of the 1970s oil crisis on the global economy and financial markets
• The lessons learned from past financial crises and their implications for future 

Financial Management Essay Topics

• The role of financial management in a company's success
• Analyzing the financial risks and rewards of different investment strategies
• The impact of globalization on financial management practices
• The importance of financial forecasting for business planning and decision-making
• How financial management practices can be used to mitigate financial risks
• The role of financial management in mergers and acquisitions
• Best practices for managing cash flow in small businesses
• The impact of interest rates on financial management decisions
• The challenges and opportunities of managing finances in non-profit organizations
• The use of financial ratios and other analytical tools in financial management

Exciting Financial Essay Topics

• How to create a successful personal finance plan for long-term financial security
• Investigating the role of fintech in shaping the future of the financial industry
• The ethical implications of corporate social responsibility in financial decision-making
• Analyzing the impact of COVID-19 on global financial markets and economies
• Exploring the potential benefits and risks of investing in emerging markets
• Investigating the use of big data and AI in financial decision-making
• The future of digital currencies and their impact on traditional financial systems
• The role of financial regulation in preventing financial crises and promoting stability
• Analyzing the impact of interest rate fluctuations on personal and corporate finances
• Investigating the use of blockchain technology in financial transactions

Investment Essay Topics

• Analyzing the impact of diversification on portfolio management
• Evaluating the effectiveness of value investing strategies
• Investigating the impact of market volatility on investment performance
• Analyzing the role of financial advisors in investment decision-making
• Assessing the effectiveness of socially responsible investing strategies
• Examining the effects of behavioral biases on investment performance
• Evaluating the impact of technological innovation on investment management
• Analyzing the effectiveness of momentum investing strategies
• Investigating the impact of interest rates on investment performance
• Assessing the effectiveness of robo-advisors in portfolio management

Tips for Choosing a Good Finance Essay Topic 

When it comes to writing a finance essay, choosing a good topic is crucial to the success of your paper. 

To help you select the best finance essay topic, here are some tips:

• Consider your Interests: Start by thinking about your personal interests and passions. Choosing a topic that you're genuinely interested in can help you stay motivated. It will kep you engaged throughout the writing process.
• Narrow your Focus: Finance is a broad field. It's important to narrow down your topic to a specific aspect or subtopic. This will help you focus your research and ensure that your essay has a clear and concise argument.
• Research Current Events: Stay up to date with current financial news and trends. This can help you identify emerging issues and topics that are relevant and timely.
• Look for Controversy: Controversial topics can make for compelling essays, but be careful to approach them with objectivity and balance. Avoid taking extreme positions or relying on biased sources.
• Consider your Audience: Think about your intended audience and what topics may be of interest or relevance to them. This can help you tailor your essay to their needs and expectations.

All in all , finance is a vast and complex field with many opportunities for research and exploration. To create a well-written essay, it's important to select a topic that aligns with your interests. By following these steps, you can showcase your knowledge and understanding of finance.

Feeling overwhelmed with your academic workload? Let us take the burden off your shoulders – simply say, " write my essay for me ," and we'll deliver top-quality essays tailored to your needs.

But that's not all; for those looking to enhance their writing experience, don't forget to explore our essay writer AI tool.

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Research Topics & Ideas: Finance

120+ Finance Research Topic Ideas To Fast-Track Your Project

If you’re just starting out exploring potential research topics for your finance-related dissertation, thesis or research project, you’ve come to the right place. In this post, we’ll help kickstart your research topic ideation process by providing a hearty list of finance-centric research topics and ideas.

PS – This is just the start…

We know it’s exciting to run through a list of research topics, but please keep in mind that this list is just a starting point . To develop a suitable education-related research topic, you’ll need to identify a clear and convincing research gap , and a viable plan of action to fill that gap.

If this sounds foreign to you, check out our free research topic webinar that explores how to find and refine a high-quality research topic, from scratch. Alternatively, if you’d like hands-on help, consider our 1-on-1 coaching service .

Overview: Finance Research Topics

• Corporate finance topics
• Investment banking topics
• Private equity & VC
• Asset management
• Hedge funds
• Financial planning & advisory
• Quantitative finance
• Treasury management
• Financial technology (FinTech)
• Commercial banking
• International finance

Corporate Finance

These research topic ideas explore a breadth of issues ranging from the examination of capital structure to the exploration of financial strategies in mergers and acquisitions.

• Evaluating the impact of capital structure on firm performance across different industries
• Assessing the effectiveness of financial management practices in emerging markets
• A comparative analysis of the cost of capital and financial structure in multinational corporations across different regulatory environments
• Examining how integrating sustainability and CSR initiatives affect a corporation’s financial performance and brand reputation
• Analysing how rigorous financial analysis informs strategic decisions and contributes to corporate growth
• Examining the relationship between corporate governance structures and financial performance
• A comparative analysis of financing strategies among mergers and acquisitions
• Evaluating the importance of financial transparency and its impact on investor relations and trust
• Investigating the role of financial flexibility in strategic investment decisions during economic downturns
• Investigating how different dividend policies affect shareholder value and the firm’s financial performance

Investment Banking

The list below presents a series of research topics exploring the multifaceted dimensions of investment banking, with a particular focus on its evolution following the 2008 financial crisis.

• Analysing the evolution and impact of regulatory frameworks in investment banking post-2008 financial crisis
• Investigating the challenges and opportunities associated with cross-border M&As facilitated by investment banks.
• Evaluating the role of investment banks in facilitating mergers and acquisitions in emerging markets
• Analysing the transformation brought about by digital technologies in the delivery of investment banking services and its effects on efficiency and client satisfaction.
• Evaluating the role of investment banks in promoting sustainable finance and the integration of Environmental, Social, and Governance (ESG) criteria in investment decisions.
• Assessing the impact of technology on the efficiency and effectiveness of investment banking services
• Examining the effectiveness of investment banks in pricing and marketing IPOs, and the subsequent performance of these IPOs in the stock market.
• A comparative analysis of different risk management strategies employed by investment banks
• Examining the relationship between investment banking fees and corporate performance
• A comparative analysis of competitive strategies employed by leading investment banks and their impact on market share and profitability

Private Equity & Venture Capital (VC)

These research topic ideas are centred on venture capital and private equity investments, with a focus on their impact on technological startups, emerging technologies, and broader economic ecosystems.

• Investigating the determinants of successful venture capital investments in tech startups
• Analysing the trends and outcomes of venture capital funding in emerging technologies such as artificial intelligence, blockchain, or clean energy
• Assessing the performance and return on investment of different exit strategies employed by venture capital firms
• Assessing the impact of private equity investments on the financial performance of SMEs
• Analysing the role of venture capital in fostering innovation and entrepreneurship
• Evaluating the exit strategies of private equity firms: A comparative analysis
• Exploring the ethical considerations in private equity and venture capital financing
• Investigating how private equity ownership influences operational efficiency and overall business performance
• Evaluating the effectiveness of corporate governance structures in companies backed by private equity investments
• Examining how the regulatory environment in different regions affects the operations, investments and performance of private equity and venture capital firms

Asset Management

This list includes a range of research topic ideas focused on asset management, probing into the effectiveness of various strategies, the integration of technology, and the alignment with ethical principles among other key dimensions.

• Analysing the effectiveness of different asset allocation strategies in diverse economic environments
• Analysing the methodologies and effectiveness of performance attribution in asset management firms
• Assessing the impact of environmental, social, and governance (ESG) criteria on fund performance
• Examining the role of robo-advisors in modern asset management
• Evaluating how advancements in technology are reshaping portfolio management strategies within asset management firms
• Evaluating the performance persistence of mutual funds and hedge funds
• Investigating the long-term performance of portfolios managed with ethical or socially responsible investing principles
• Investigating the behavioural biases in individual and institutional investment decisions
• Examining the asset allocation strategies employed by pension funds and their impact on long-term fund performance
• Assessing the operational efficiency of asset management firms and its correlation with fund performance

Hedge Funds

Here we explore research topics related to hedge fund operations and strategies, including their implications on corporate governance, financial market stability, and regulatory compliance among other critical facets.

• Assessing the impact of hedge fund activism on corporate governance and financial performance
• Analysing the effectiveness and implications of market-neutral strategies employed by hedge funds
• Investigating how different fee structures impact the performance and investor attraction to hedge funds
• Evaluating the contribution of hedge funds to financial market liquidity and the implications for market stability
• Analysing the risk-return profile of hedge fund strategies during financial crises
• Evaluating the influence of regulatory changes on hedge fund operations and performance
• Examining the level of transparency and disclosure practices in the hedge fund industry and its impact on investor trust and regulatory compliance
• Assessing the contribution of hedge funds to systemic risk in financial markets, and the effectiveness of regulatory measures in mitigating such risks
• Examining the role of hedge funds in financial market stability
• Investigating the determinants of hedge fund success: A comparative analysis

Financial Planning and Advisory

This list explores various research topic ideas related to financial planning, focusing on the effects of financial literacy, the adoption of digital tools, taxation policies, and the role of financial advisors.

• Evaluating the impact of financial literacy on individual financial planning effectiveness
• Analysing how different taxation policies influence financial planning strategies among individuals and businesses
• Evaluating the effectiveness and user adoption of digital tools in modern financial planning practices
• Investigating the adequacy of long-term financial planning strategies in ensuring retirement security
• Assessing the role of financial education in shaping financial planning behaviour among different demographic groups
• Examining the impact of psychological biases on financial planning and decision-making, and strategies to mitigate these biases
• Assessing the behavioural factors influencing financial planning decisions
• Examining the role of financial advisors in managing retirement savings
• A comparative analysis of traditional versus robo-advisory in financial planning
• Investigating the ethics of financial advisory practices

The following list delves into research topics within the insurance sector, touching on the technological transformations, regulatory shifts, and evolving consumer behaviours among other pivotal aspects.

• Analysing the impact of technology adoption on insurance pricing and risk management
• Analysing the influence of Insurtech innovations on the competitive dynamics and consumer choices in insurance markets
• Investigating the factors affecting consumer behaviour in insurance product selection and the role of digital channels in influencing decisions
• Assessing the effect of regulatory changes on insurance product offerings
• Examining the determinants of insurance penetration in emerging markets
• Evaluating the operational efficiency of claims management processes in insurance companies and its impact on customer satisfaction
• Examining the evolution and effectiveness of risk assessment models used in insurance underwriting and their impact on pricing and coverage
• Evaluating the role of insurance in financial stability and economic development
• Investigating the impact of climate change on insurance models and products
• Exploring the challenges and opportunities in underwriting cyber insurance in the face of evolving cyber threats and regulations

Quantitative Finance

These topic ideas span the development of asset pricing models, evaluation of machine learning algorithms, and the exploration of ethical implications among other pivotal areas.

• Developing and testing new quantitative models for asset pricing
• Analysing the effectiveness and limitations of machine learning algorithms in predicting financial market movements
• Assessing the effectiveness of various risk management techniques in quantitative finance
• Evaluating the advancements in portfolio optimisation techniques and their impact on risk-adjusted returns
• Evaluating the impact of high-frequency trading on market efficiency and stability
• Investigating the influence of algorithmic trading strategies on market efficiency and liquidity
• Examining the risk parity approach in asset allocation and its effectiveness in different market conditions
• Examining the application of machine learning and artificial intelligence in quantitative financial analysis
• Investigating the ethical implications of quantitative financial innovations
• Assessing the profitability and market impact of statistical arbitrage strategies considering different market microstructures

Treasury Management

The following topic ideas explore treasury management, focusing on modernisation through technological advancements, the impact on firm liquidity, and the intertwined relationship with corporate governance among other crucial areas.

• Analysing the impact of treasury management practices on firm liquidity and profitability
• Analysing the role of automation in enhancing operational efficiency and strategic decision-making in treasury management
• Evaluating the effectiveness of various cash management strategies in multinational corporations
• Investigating the potential of blockchain technology in streamlining treasury operations and enhancing transparency
• Examining the role of treasury management in mitigating financial risks
• Evaluating the accuracy and effectiveness of various cash flow forecasting techniques employed in treasury management
• Assessing the impact of technological advancements on treasury management operations
• Examining the effectiveness of different foreign exchange risk management strategies employed by treasury managers in multinational corporations
• Assessing the impact of regulatory compliance requirements on the operational and strategic aspects of treasury management
• Investigating the relationship between treasury management and corporate governance

Financial Technology (FinTech)

The following research topic ideas explore the transformative potential of blockchain, the rise of open banking, and the burgeoning landscape of peer-to-peer lending among other focal areas.

• Evaluating the impact of blockchain technology on financial services
• Investigating the implications of open banking on consumer data privacy and financial services competition
• Assessing the role of FinTech in financial inclusion in emerging markets
• Analysing the role of peer-to-peer lending platforms in promoting financial inclusion and their impact on traditional banking systems
• Examining the cybersecurity challenges faced by FinTech firms and the regulatory measures to ensure data protection and financial stability
• Examining the regulatory challenges and opportunities in the FinTech ecosystem
• Assessing the impact of artificial intelligence on the delivery of financial services, customer experience, and operational efficiency within FinTech firms
• Analysing the adoption and impact of cryptocurrencies on traditional financial systems
• Investigating the determinants of success for FinTech startups

Commercial Banking

These topic ideas span commercial banking, encompassing digital transformation, support for small and medium-sized enterprises (SMEs), and the evolving regulatory and competitive landscape among other key themes.

• Assessing the impact of digital transformation on commercial banking services and competitiveness
• Analysing the impact of digital transformation on customer experience and operational efficiency in commercial banking
• Evaluating the role of commercial banks in supporting small and medium-sized enterprises (SMEs)
• Investigating the effectiveness of credit risk management practices and their impact on bank profitability and financial stability
• Examining the relationship between commercial banking practices and financial stability
• Evaluating the implications of open banking frameworks on the competitive landscape and service innovation in commercial banking
• Assessing how regulatory changes affect lending practices and risk appetite of commercial banks
• Examining how commercial banks are adapting their strategies in response to competition from FinTech firms and changing consumer preferences
• Analysing the impact of regulatory compliance on commercial banking operations
• Investigating the determinants of customer satisfaction and loyalty in commercial banking

International Finance

The folowing research topic ideas are centred around international finance and global economic dynamics, delving into aspects like exchange rate fluctuations, international financial regulations, and the role of international financial institutions among other pivotal areas.

• Analysing the determinants of exchange rate fluctuations and their impact on international trade
• Analysing the influence of global trade agreements on international financial flows and foreign direct investments
• Evaluating the effectiveness of international portfolio diversification strategies in mitigating risks and enhancing returns
• Evaluating the role of international financial institutions in global financial stability
• Investigating the role and implications of offshore financial centres on international financial stability and regulatory harmonisation
• Examining the impact of global financial crises on emerging market economies
• Examining the challenges and regulatory frameworks associated with cross-border banking operations
• Assessing the effectiveness of international financial regulations
• Investigating the challenges and opportunities of cross-border mergers and acquisitions

Choosing A Research Topic

These finance-related research topic ideas are starting points to guide your thinking. They are intentionally very broad and open-ended. By engaging with the currently literature in your field of interest, you’ll be able to narrow down your focus to a specific research gap .

When choosing a topic , you’ll need to take into account its originality, relevance, feasibility, and the resources you have at your disposal. Make sure to align your interest and expertise in the subject with your university program’s specific requirements. Always consult your academic advisor to ensure that your chosen topic not only meets the academic criteria but also provides a valuable contribution to the field. 

If you need a helping hand, feel free to check out our private coaching service here.

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thank you for suggest those topic, I want to ask you about the subjects related to the fintech, can i measure it and how?

Please guide me on selecting research titles

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