Fate of the Euro

Last Thursday, the Business School (in conjunction with FINSIA and the Capital Markets CRC) was fortunate enough to host a lunchtime presentation by international financial markets regulation expert John Eatwell.

In what was a fascinating lecture, John spoke about the link between the 2008 GFC and the current European sovereign debt crisis before addressing the key question facing governments and economists alike: will the Euro survive? His first real message was that the banks at the heart of this crisis are actually so large that they dwarf not only the economies in which they’re based, but also the governments presiding over those economies. They are, as the popular mantra indicates, too big to fail. He highlighted two of the most problematic banks - UBS and Credit Suisse – who are 376% and 218% larger than the total Swiss economy respectively. It’s a similar story in France, with BNP Paribas, Credit Agricole and Societe Generale combining to be 237% larger than national GDP. These figures highlight the necessity of a coordinated global effort when these institutions get into trouble.

Despite current fears, John feels very strongly that the Euro will indeed survive. Quite simply, Germany and France have too much of a vested interest for failure to be an option. However, he does foresee the possibility of a growing divide between politicians and their disaffected constituents, who will probably be quite outraged at the prospect of their money being used to bail out Greece and other similarly problematic member countries.

He believes that the long-term viability of the Euro requires a strong central bank, an effective treasury function, a mechanism to transfer wealth from the prosperous to the poor, a stopgap all-union employment provider and easy migration. Currently, only the first of these conditions is met (in the form of the European Central Bank), and in order for the currency to survive, the other functions must be developed. This will require more centrally coordinated action within the region and while it’s a move that will lead to a diluting of state powers, it’s a concession that will be vital in keeping the Euro going.

Author: Professor Michael McKenzie - Chair of Discipline of Finance at the University of Sydney Business School

Getting The Good Oil

The question of whether or not to pursue a Masters education can be one of the most perplexing decisions that any Bachelors graduate will ever contemplate.

That’s where the University of Sydney Business School’s Postgraduate Information Session (scheduled for 6pm this Thursday at The Hilton Hotel), can play a defining role. A showcase for our extensive programs, the event will not only enable potential students to interact firsthand with key academic advisers from each Masters program, but also to pick up some invaluable tips for Masters success via a panel discussion involving academics, senior business representatives, and a recent Masters graduate. One of our key recruitment tools, the event is targeted at both on-shore international students and Australian citizens considering part-time or full-time study commencing next semester.

In effect, we try to enable students to answer two critical questions for themselves. One: why opt for postgraduate study in the first place? And two: If I do decide to go for it - why should I do it with you? In relation to the first, it’s no secret that today’s employers are looking for candidates possessing aptitudes that may simply not be present in bachelor-level students – things like strategic thinking ability and advanced team leadership skills, for instance. While equipping participants with these types of high-level technical skills, a Masters education also increases the likelihood of rapid career advancement and higher starting salary levels.

When it comes to the attraction of undertaking study at Sydney University Business School, the fact that we deploy a vast range of research-based expertise into all our Masters programs is perhaps the most compelling reason of all. In addition, we have a suite of over 20 masters programs, most of which are specialist, professionally-credited degrees in areas like accounting, HRM, marketing and logistics, management, and international business. These offerings are strongly complemented by our general management education programs, such as our critically acclaimed Masters of Management. It’s fair to say that any one of these is a great way of turbo-charging any budding career.

Author: Professor John Shields - Postgraduate and Master of Commerce Program Director

If you are interested in attending the Postgraduate Information Session, register now.

Learning from the Trenches

Bringing industry into the classroom is without doubt one of the most effective ways of ensuring relevance in any area of business study.

That’s why an upcoming series of interactive panel discussions hosted by the Discipline of International Business promises to be a major highlight of the academic year. Designed to showcase the latest issues, trends and developments in business, the forums are intended to give students an opportunity to get acquainted with the practical day-to-day problems that currently challenge business while engaging with key industry leaders and representatives.

The first event (scheduled for Friday, October 14 at 1pm and set to examine the risk to business presented by social media) promises to be extremely insightful. Indeed, there can be no doubt that the Internet is impacting international business models in ways that were perhaps never properly anticipated. For an example of this we only have to look to recent events where social media tools like Twitter and Facebook have proven extremely effective for rallying people to protest against certain groups and organisations. The potential for extreme damage to brand credibility or corporate image resulting from a single Tweet posted by just one dissatisfied customer is certainly something that demands proactive risk management initiatives.

The panel members for this inaugural event will include Peter Fraser from SR7 – a consulting company that works at the frontier of social media risk analysis. He’ll be joined by Nada Siratkov, General Manager of Marketing at Aon Australia. A leader in risk management and insurance in Australia, Aon found in their 2010/2011 Australasian Risk Management Benchmarking Survey that the top perceived risk to businesses as nominated by business leaders was in fact brand and image, partly due to exposure to social media risk.

Anyone wishing to register for the event can do so by visiting International Business Matters website.

Author: Sandra Seno-Alday - Lecturer and Sessional Staff Coordinator, Discipline of International Business