Facilitating Student Understanding of CDOs, Systematic Risk and Global Financial Institutions in Crisis

The complexity of the global financial crisis beginning 2007 has challenged professionals. For students, the crisis's interconnected elements, covered in multiple courses and the concepts of derivatives central to it, are overwhelming. Providing short answers to their questions often creates further confusion. The situation requires an extended exposé of the interconnected concepts, providing essential details for good comprehension, active participation and empowerment without overpowering. I present, in four modules, the basic framework of this crisis as an instructor resource, to be used independently or sequentially, in the classroom or as an assignment. The modules, successfully implemented in my classroom, are characterization of systematic risk, its management via derivative contracts and structured securities (CDO and CDS), its global contagion across financial institutions, and the scenario(s) ahead