With a background in political science, I came to HEC Paris’ Summer School with no prior, substantial knowledge of the financial world. As a political analyst at the Danish Foreign Ministry, it was becoming increasingly clear to me that political and financial systems cannot be separated: How will financial markets react to the politically motivated sacking of South Africa’s finance minister? How will the EU’s sanctions against Russia influence Danish companies exporting to the Russian market? In coming to the summer school, I hoped to add a new dimension to my understanding of such questions.
Academics: week 1
The International Finance course began with a two-day introduction to basic accounting, assuring that all students were comfortable with the key concepts underlying financial statements – essential knowledge for making sense of the decision-making processes of exporting firms, multinational corporations, and financial institutions alike. Having the essentials in place, we continued with the international monetary system (a topic politics students should feel comfortable with) followed by short- and long-term international financing.
Alongside the daily classes 9.30-17.10, we were divided into teams of five to submit a short, written case study applying the theory learned in class. The question was whether an American company should continue its exporting operations on the Venezuelan market in face of significant political instability. My teammates had backgrounds in business administration, engineering, financial mathematics, and philosophy respectively. We quickly found a good dynamic between the five of us, and I think we all felt that our different competencies complemented each other. While the teammates trained in the social sciences were able to quickly identify the links between the country’s political and macroeconomic situation, the more numerically savvy group members helped us to make sense of the financial calculations.
Given the intensity of the course, there was little time to explore Paris during the weekdays, so I decided to spend the weekend in the city; a 40 minutes commute from Jouy-en-Josas. To many Summer School students, not only was this their first time in France – but their first time in Europe altogether. As such, there was plenty of interest in making new friendships and in discovering Paris together – and by Saturday evening, many of us had walked 15-20 km!
On Sunday, I decided to have a less physically demanding day out. To anyone with a background in political philosophy, a visit to Café de Flore is mandatory – but instead of Sartre, I brought our coursebook International Corporate Finance. Although it felt like sacrilege, I managed to get through some chapters to prepare me for the second week of study, and so I could enjoy a relaxed afternoon at Bois de Vincennes with a good conscience. (NB: there was also plenty of opportunities to socialize on weekdays: the on-campus bar created the perfect backdrop for meeting fellow summer school and MBA students in informal surroundings.)
Academics: week 2
In the second week, we were introduced to the global bond market and foreign exchange risk management by studying different forms of exposure and hedging strategies. At this point, things started to get more abstract for the non-financially trained amongst us: why would an Australian insurance company sell Japanese yen forwards to create a liability position in 60 days? Helpfully, Professor Laurent Jacque’s teaching follows his book closely. The preparation I had done at the café paid off, and after a few in-class exercises, the new topics began to seem a lot more tangible.
Just like the first week, we got back into our groups to prepare a case study. This time, we had to make a financing recommendation for a Turkish subsidiary of an American company. Naturally, this case study required slightly more advanced algebra, but no more complicated than most university level students should be able to follow. On the final Friday, the course ended with a closed-book, two part exam: one part testing our knowledge of key concepts (e.g. purchasing power parity, disintermediation, forward contracts …), the other part being a short company case study.
In this post, I hope to have given prospective students an idea of what the International Finance summer school is like, especially for those coming from non-financial backgrounds. As someone used to analysing international macroeconomics from a predominantly political point of view, I found it exceptionally useful to see the world from the perspective of treasurers or chief financial officers. The programme fully lived up to being the “intensive mix of international macro-economics, international corporate finance, and risk management” that it promises to be on its website. Thanks to my incredibly skilled and passionate coursemates for making the lectures, case studies, and readings a great learning experience.