INTL 303

INTL 303 International Financial Institutions and Trade Finance

Instructor: Radu Cureteanu, Ph.D.

e-mail: rcuretea@my.centennialcollege.ca

Course Description

This course provides students with a sound knowledge base in two interrelated areas of finance as it
pertains to international business: world financial systems and trade finance. The former begins with an
examination of the key multilateral organizations that support world financial stability and the respective
roles of central and commercial banks; as well, it evaluates differences among financial institutions’
reporting requirements and accounting standards around the world. This part of the course continues
with an in-depth look at foreign exchange rates and their significance to international business people.
The second half of the course focuses on trade finance. It deals, first, with export financing and
international bonding requirements in which students complete a term report that requires the design of
an export financing plan. Second, it examines the major payment options available to importers and
exporters.

Throughout the course strong emphasis is placed on financial risk management.

Learning Outcomes

Upon successful completion of this course, the student will be able to:

 Explain how the world financial system functions to support and strengthen international
financial cooperation and stability
 Evaluate countries’ differing financial reporting requirements and accounting standards
 Analyze the likely direction of foreign exchange rates, based on generally recognized influences
 Calculate the impact on an international business enterprise of the international financial
environment
 Analyze the role played by trade finance in determining the success of international trade
 Create an export financial plan, including a cashflow analysis
 Evaluate the costs and benefits of various export payment alternatives
 Conduct a risk management assessment, incorporating all aspects of risk to the export
transaction and of financial risk mitigant solutions, both bank trade finance solutions and Export
Development Canada programs.

Learning Resources

There are a variety of textbooks that can provide students with an introduction to the course.

Text Book:

International Trade Finance, Sixth Edition, Forum for International Trade Training (2013).

http://fittfortrade.com/international-trade-finance

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Online Resource(s):

Bank of Canada: www.bankofcanada.ca

Export Development Canada: www.edc.ca

Evaluation overview

Type % Time
Assignments x5 25% Wk 2,3,4,8,11
Individual Project 15% Wk 7
Test #1 20% Wk 6
Group Project 20% Wk 14
Test #2 20% Wk 13
TOTAL 100%
There are NO MAKE-UP evaluations.

Test #1 and Test #2

Test #1 and #2 will be held during class time. They will consist of a series of multiple-choice, short-answer,
and several longer multi-part questions. The main criteria for assessment will be correct answers with
partial credit based on evidence of thinking and learning.

Individual Project – 15%

Goal: The paper assignment allows you to analyze any subject that interests you in the broad field of
international economics/finance. While gathering information is an inevitable part of writing a paper, the
focus should be on your analysis and hence your own contribution to the topic at hand. The goal is to
learn to apply economic logic and insights from the class material to analyze the issue at hand.
Task: Pick a topic, guided by some basic questions: What are you interested in knowing more about or
thinking more deeply about than the time for this class allows? Do we cover anything in class that you
want to take a deeper look at? Or are you missing an international economics topic that you wanted a
reason to learn about? What do you want to do after college, and how can you best use a paper writing
assignment like this to your advantage for the future? If you are applying for grad school, you might want
to look at a theoretical paper where you can demonstrate complex reasoning. If you want to work on
policy issues, then pick a policy topic.
While a monetary/banking/finance - related topic would be great, it does not need to be one. Rather, you
need to make a case why your topic matters, why we should be interested in it and if less obvious how it
relates to international economics/finance and our course. Including a GC&E component is required. If
you are at a loss for a topic, three great places to start searching for topics are:

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- The Journal of Economic Perspectives: JEP is a highly-regarded economic journal that caters to a
non-economic audience by publishing quarterly symposiums on a range of topics. It provides a
state-of-the-research discussion of the topic and recent findings (typically without any math).
Available online at http:// www.aeaweb.org/journals/jep.
- The Economist: popular weekly economics magazine with in-depth reporting on Specials at
http://www.economist.com.
- Supplementary Resources provided in the Syllabus.

Use the American Psychological Association (APA) style in preparing this paper. References should be cited
for all facts, ideas, conclusions, and opinions that are not your own. The paper should be 800-1000 words.
About APA format:
https://owl.english.purdue.edu/owl/resource/560/01/
http://psychology.about.com/od/apastyle/a/apaformatguide.htm

Due date Feb 22 @ 11:59 – upload in eCentennial - Individual Project Folder

Group Project – 20%

Export financing group project - Managing your own MNC

You present in a group of up to 5 people (20-25 minutes). After your presentation there will be up to 5
minutes for comments and questions from your classmates. The presentation will be made using
PowerPoint slides (or Prezi, Google Slides etc.).

Students will develop a project in which they will establish their own small MNC. The work will be done in
groups of no more than five students. The project will provide students with an opportunity to identify a
product or service within Canada (an overseas market) that can be sold in a foreign market (Canada) and
apply ideas learnt in class to develop a strategy to enter the new market and distribute the product. This
strategy must include foreign exchange risk management.

These elements provide a pretty coherent view of a business’ key drivers:

1. Customer Segments: Who are the customers? What do they think? See? Feel? Do?
2. Value Propositions: What’s compelling about the proposition? Why do customers buy, use?
3. Channels: How are these propositions promoted, sold and delivered? Why? Is it working?
4. Customer Relationships: How do you interact with the customer through their ‘journey’?
5. Revenue Streams: How does the business earn revenue from the value propositions?
6. Key Activities: What uniquely strategic things does the business do to deliver its proposition?
7. Key Resources: What unique strategic assets must the business have to compete?
8. Key Partnerships: What can the company not do so it can focus on its Key Activities?
9. Cost Structure: What are the business’ major cost drivers? How are they linked to revenue?

After the presentation, please provide me with your slides and, very important, a list of your sources at
the end. Upload the file in Dropbox folder Group Project. Name the file as GroupNumber+surname1,
surename2,surename3,surename4.
Due date April 8
Evaluation: 20% by instructor (see Appendix 1)

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Schedule of Activities – (subject to change)

Week/Start Date Topic Chapter Assign/GP/Test

W1 – Jan 7 -Introduction to the course
-Overview of the world financial system
W2 – Jan 14 -World financial System assignment/quiz 5%
-Secondary financial institutions
W3 – Jan 21 -Financial reporting requirements assignment/quiz 5%
-International financial reporting
standards (IFRS)
-Taxation laws
W4 – Jan 28 -Regulation of the money supply in assignment/quiz 5%
national economies
W5 – Feb 4 -Foreign exchange rate determination
and forecasting
W6 - Feb 11 -Foreign exchange risk management Test #1 20%
W7 – Feb 18 Individual project 15%
RW – Feb 25
W8 – Mar 4 -The role of trade finance in export assignment/quiz 5%
transactions
W9 – Mar 11 -Export credit agencies
W10 – Mar 18 -Export financial planning
W11 – Mar 25 -Overview of payment methods for assignment/quiz 5%
export sales
W12 – Apr 1 -Documentary collections
W13 – Apr 8 -Trade finance risk management Test #2 20%
W14 – Apr 15 Group project 20%
Disclaimer: Note that the schedule above is not rigid and may require minor modifications as the course progresses.

Plagiarism Announcement

Plagiarism is the unacknowledged use of the work of others. It comes from the Latin word plagiaries,
meaning ‘kidnapper’. Submitting work that does not acknowledge the complexity of influences and
sources that contributed to your original synthesis and argumentation: denies readers the opportunity to
fully engage with your work and appreciate your mastery of the materials you consulted; diminishes the
impact your work can contribute to, and undermines the ongoing conversation that is represented in, a
body of scholarly work; steals the intellectual property of other scholars. Fully acknowledging your sources
avoids plagiarism and enables your readers to learn more by consulting the sources.

Course policies

 The best way for you to learn the material and succeed in this course is to (i) attend each class
having read the material for that lecture, (ii) actively participate in the class by taking part in
classroom discussion and activities, (iii) study and review the material in the textbook, (iv)
complete all assigned work, (v) ask questions in class, after class during office hours, or by
arranging a meeting with me outside of office hours.

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 To fully benefit from the course, I encourage you to actively participate in lectures. Active
participation in the class involves participating in classroom discussions and activities, asking
questions, and taking notes on pertinent material. Doing so will help you achieve greater success
in the course.
 I take cheating, plagiarism, and other forms of academic misconduct very seriously. You are
permitted and encouraged to work in groups, but you are required to submit original work.
Original work is one not received from others, copied, nor based on the work of others.
 I expect you to embrace a learning community that respects diversity and promotes a positive,
inclusive, and safe space for all students. We are all here to learn and should have equal
opportunities to do so.

College Policies

Students should familiarize themselves with all College Policies that cover academic matters and student
conduct. Please visit www.centennialcollege.ca/aboutcentennial/college-overview/college-policies.

Supplementary resources

There is a wide array of materials available for this class. Some examples of other materials you can access.

Textbooks:

 Frank Fabozzi, Franco Modigliani, and Frank Jones (2010), Foundations of Financial Markets and
Institutions, Pearson Education Limited, 4th edition
 Hubbard, R.G. and A. P. O’Brien (2012), Money, Banking, and the Financial System, Pearson
Education Limited, 1st edition
 Saunders, A., Marcia M. Cornett, and Patricia McGraw (2011), Financial Institutions Management,
A Risk Management Approach, 3rd edition, McGRaw-Hill Ryerson
 International Economics: Theory and Policy by Paul R. Krugman, Maurice Obstfeld, and Marc J.
Melitz (9th edition, 2012)

Books:

 Adam Smith (1776), The Wealth of Nations

 Joseph Alois Schumpeter (1942), Capitalism, Socialism and Democracy
 Milton Friedman (1962), Capitalism and Freedom
 Gary Becker (1964), Human capital
 Charles Wheelan (2003), Naked economics—Undressing the dismal science
 Malcolm Gladwell (2008) Outliers: The story of success
 Steven D. Levitt & Stephen J. Dubner (2010), Freakonomics: A rogue economist explains the
hidden side of everything
 Raghuram G. Rajan (2010), Fault lines: How hidden factures still threaten the world economy
 Thomas Piketty (2014), Capital in the twenty-first century
 Joseph E. Stiglitz (2012), The price of inequality: How today's divided society endangers our future

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Newspapers:

 The Economist (http://www.economist.com)

 BBC economic section (http://www.bbc.co.uk/news/business/economy/)
 The Financial Times (http://www.ft.com/home/us)
 The Globe and Mail economic section (http://www.theglobeandmail.com/report-on-
business/economy/)
 Huffington Post (http://www.huffingtonpost.com/news/economy/)
 Wall Street Journal (http://www.wsj.com)
 The New York Times (https://www.nytimes.com)

Blogs and other Internet resources:

 The Daily, Statistics Canada (http://www.statcan.gc.ca/dai-quo/)

 The Bank of Canada (http://www.bankofcanada.ca/)
 Freakonomics blog (http://freakonomics.com/blog/)
 TED talks on economics (http://www.ted.com/topics/economics)
 Bloomberg (http://www.bloomberg.com)
 Malcolm Gladwell’s Blog (http://gladwell.com)
 Freakonomics podcast (http://freakonomics.com/radio/freakonomics-radio-podcast-archive/)
 Movies for Economists (http://www.moviesforecon.com/table.htm)
 Democracy Now! (http://www.democracynow.org)
 Nation of Change (http://www.nationofchange.org)
 Econbrowser: An Analysis of current economic conditions and policy (http://econbrowser.com)
 The Conference Board of Canada (http://www.conferenceboard.ca)
 C.D. Howe Institute (http://www.cdhowe.org)
 Asia Pacific Foundation of Canada (https://www.asiapacific.ca)

Movies:

 Wall Street (1987) (http://www.imdb.com/title/tt0094291/)

 Wall Street: Money Never Sleeps (2010) (http://www.imdb.com/title/tt1027718/)
 The Wolf of Wall Street (2013) (http://www.imdb.com/title/tt0993846/)
 Inside Job (2010) (http://www.imdb.com/title/tt1645089/)
 The Big Short (2015) (http://www.imdb.com/title/tt1596363/)
 Banking on Bitcoin (2016) (http://www.imdb.com/title/tt5033790/)
 The Social Network (2010) (http://www.imdb.com/title/tt1285016/)

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Appendix 1 Group Presentation Evaluation Form

Needs Work - Good - Excellent

A. ORGANIZATION 1–2–3–4–5
1. 1. Introduction ––––
2. 2. Body ––––
3. 3. Transitions/ Connections ––––
4. 4. Conclusion with justifications ––––
5. 5. Audience awareness ––––
6. 6. Accurate documentation of sources ––––
B. CONTENT 1–2–3–4–5
1. 1. Interesting ––––
2. 2. Appropriateness for audience and assignment ––––
3. 3. Clear focus ––––
4. 4. Good support and details ––––
5. Identified sources adequately ––––
C. DELIVERY 1–2–3–4–5
1. 1. Pace, Volume ––––
2. Posture, Gesture ––––
3. Comprehensibility ––––
4. 4. Creativity and Use of imagination ––––
TOTAL points (min 15 – max 75)

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Appendix 2 Group Presentation Peer Evaluation Form

Peer evaluation form is for you to use individually in order to evaluate the participation of the members
of your group during the group project.

Peer Evaluation Form

Evaluator’s Name ID#
Group Project # Team #
Date submitted
Please rate each group member’s participation, including yourself. Use a scale from 0-100%
0% No participation 100% Active participation
Team member name Rating % Comments
1.
2.
3.
4.

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