This course examines in depth how a financial crisis in a particular market segment, one or more financial institutions, or one or more sovereign countries can create a risk to the overall stability of the international financial system. The course looks at how such triggering events arise, the potential paths of contagion to the system as a whole, and the spillover effects on the real economy. How to prevent and contain such risks and create a more stable international financial system are viewed through four case studies: the sovereign debt crises of the 1980’s and ‘90’s; the failure of a large hedge fund, Long-Term Capital Management, in 1998; the Sub-Prime Crisis of 2007-2008; and the ongoing Eurozone financial crisis. The evolving institutional architecture for systemic risk management and recent structural and regulatory reforms are discussed and evaluated. Prerequisite: International Monetary Theory is highly recommended.