This assignment is designed to assess the following learning outcome (taken from the MID for 300ECN):
‘Undertake a more in-depth assessment of the issues using more advanced methodologies gained from recent contributions to the academic literature’
This assignment is an individual assignment.
The recent global banking and Eurozone crisis demonstrated the vulnerability of the banking sector and hence, its ability to support the global economy. The loss of trust between banks and its customers (which includes banks themselves) resulted in the “Credit Crunch”. As a consequence, this led to unprecedented co-ordinated action by the world’s leading central banks, initially by reducing interest rates and then, at varying stages, the implementation of unconventional monetary policy through the use of Quantitative Easing (QE). The Federal Reserve Bank of New York first announced its Quantitative Easing Programme in 2008 followed by the Bank of England and eventually, the European Central Bank (ECB) in January 2015.
You work for a market intelligence unit and have been commissioned to write a report (around 1500 words) that critically evaluates the effectiveness of this policy in supporting the banking sector by providing credit to the real economy. This report is a response to recent news coverage of an impending financial crisis from the emerging market economies due to the Federal Reserve Bank of New York embarking on a series of interest rate rises.
In your investigation, you may choose the actions of either the Federal Reserve, the Bank of England or the ECB as the basis of your report.
The Report should have a short half page Executive Summary of your findings. You will need to properly reference all evidence that you have used to justify your arguments. You should aim to cover as many of the following areas as you can, within the word limit you have been given, whilst also ensuring that you give priority to those sections you consider to be most important:
• A brief background discussion of the original aims of QE when it was announced by the monetary authority (using any data sources you think may be relevant).
• A brief discussion on why is this report timely and important in the current environment.
• A discussion of how the central proposed to implement QE.
• A discussion on any unintended consequences of QE.
• A discussion on the extent to which the policy fulfilled its original objectives and its effectiveness.
• Policy recommendations going forward in the event of future crises that are directly informed by the outcomes of the report.
Criteria for Assessment
This coursework will be assessed against the following criteria. Students should show evidence that they are able to:
• Make use of a wide variety of information and data sources to support their arguments for the need for a social bank
• Use their initiative in identifying examples of good practice from the websites of other social banks and similar organisations
• Show an awareness of the importance of ownership models and the implication arising from different forms of ownership
• Show an awareness of potential problems that might arise in the development of such a bank
• Write clearly and concisely making full use of appropriate charts and other methods of presenting data and information in order to produce a document that has a strong visual impact
The report should be around 1500 words in length so it is important to write clearly and concisely
Preferred language style UK English