Travel Report Winter Semester 2015/2016 Goethe University am Main

460514 1. Preparing for the exchange

When you are chosen by Aalto for the exchange, Goethe University will send you a link to an online application form. You are required to list general information about yourself, your education and planned studies at Goethe University (faculty and level). At this point you can also sign up for the pre-semester German intensive language course. The university lists B1 as the minimum requirement for the language course, but in reality students come there to study German with levels far below B1, so you can apply even if you feel your current level is not B1. Finally, send a signed and stamped form to Goethe University by physical mail. The application must arrive at the university before 15th of June for the winter semester and 15th of December for the summer semester. You also increase your chances of being offered student accommodation if you mail in the form earlier.

Visa application

German embassy in Helsinki recommends applying in the end of spring / beginning of summer due to an overwhelming number of applications in the end of summer. In order to apply for a visa, it is necessary to make an appointment in advance by phone or email (contact information is on the embassy’s website). All the instructions regarding the required documents, fees and the application procedure are listed here: http://www.helsinki.diplo.de/contentblob/4122858/Daten/5750006/pdf_Merkblatt_Visum_engl.pdf

The embassy quotes the application processing time of approximately 1 month unless the application is made in the end of summer, which is the busiest period, and the processing times may vary. I applied around May, and received my visa in around 2 weeks. The embassy is really helpful if you have any questions about filling out the forms or required documents, and replies within 1 business day if contacted by email.

Arriving in

When you come to Germany, you have to register as an attending student at the University on a specified date. However, if you miss this date (for instance, I was ill), it is possible to do this later as well, simply contact the international office and make an appointment. You also have to register in Bürgeramt within three weeks of your arrival and de-register when you leave Germany. Closer to the beginning of actual studies, you also have to pick up your student card from the university at a specified date. You will be assigned a buddy by the university who can help you if you have any problems, including going to Bürgeramt and picking up the student card.

2. Exchange studies

2.1. Semester dates

Semester: 1st October – 31st March

Lecture period: 12th October – 12th February

Examination period: 15th February – 4th March

There is an orientation session in the beginning of the semester, but it is not mandatory. You can also schedule your exams for earlier dates if you can get a confirmation from Aalto that there are conflicting semester dates, and you have to go back to Finland earlier.

2.2. Course and exam registration

For most of the courses, you do not need to register in order to participate (registration is only required for the final exam), but there are exceptions to this rule.

For some courses it is required to send your CV and a cover letter to the professor in advance. Application deadlines vary and are listed in QIS as part of course description. While I would encourage you to follow the deadlines, you can still apply for a short while after the deadline. I missed a deadline for a course named Banking Risk Management Frameworks, but sent my application later the same day and was accepted despite the fact that some people were rejected even before the deadline. Thus, I have a reason to believe exchange students receive some kind of preferential treatment.

Goethe University also offer seminars each semester, and the registration procedure for the seminars is different from that for the general courses. Goethe requires registration through a separate application form, where you list your preferences for the seminars, and are allocated to only one based on your wishes and availability of places. I was able to get a place in a seminar of my first choice. The registration for the exams is somewhat inconvenient for exchange students. You have to fill out a paper form listing all of the exams you want to take and take or send the paper to the international office. Specific instructions will be sent to your email address in the middle of the semester.

2.3. Course overview

I was an exchange student in the MSc Money and Finance programme, which is offered entirely in English. Courses offered can be viewed without login here: qis.server.uni-frankfurt.de. However, the courses only appear in QIS closer to the beginning of the semester (June/ July for the winter semester, January / February for the summer semester). Please note the grade scale is 1-5 with 1 being the best grade and 4 being the minimum passing grade.

I was not able to take the courses I was most interested in, because many of them overlapped with the courses I had already taken at Aalto. However, there are quite interesting Master’s level courses in e.g. Banking and Securitization, Capital Markets and Asset Pricing, Corporate Finance and Valuation and Modern Portfolio Management, as well as some good seminars. You can also take courses from other programmes and faculties both in English and German (there is a special procedure for that, but it is not difficult).

I personally ended up taking the following courses:

1. Banking Risk Management Frameworks (graduate level, 6 ETCS): Taught by Prof. Dr. Thomas Kaiser and Prof. Dr. Mark Wahrenburg. The final grade was based on the presentation and class activity (no exam). The course focuses on baking regulation (content is up to date and covered even the newest regulation like Basel III), risk strategy, risk management (covering market, credit, operational, reputational, business and liquidity risks), and risk reporting.

Overall, the course was useful if one attended all the lectures and was able to remember the concepts without learning for the exam. The contents were relevant and explained in sufficient detail, and the lectures were complemented by real-life examples either from the banking world in general or from professors’ own experiences. It was also interesting to hear stories from students, most of whom have work experience from e.g. Deutsche Bank and Commerzbank. Student presentations were also based on real-life cases, such as the London whale and the agricultural derivatives scandal. Students were generally able to get the presentation topic they wanted, but there are only 4-5 places per topic.

All in all, the course provided an overview of risk management and current regulations and had a nice practical touch to it, since the professors have years of work experience in the industry. But at the end of the day, if it is not required to learn for the exam, most people (including me) probably will not remember most of the things that have been covered during the course.

2. Topics on Financial Regulation / Systemic Risks (seminar, graduate level, 6 ETCS): Taught by Prof. Dr. Loriana Pelizzon. The final grade is based on the presentation you prepare in a group of max. 4 people. The course consists of 2 lectures and 1 presentation session. The lectures only give a brief overview of the topics that are assigned to students later. Overall, you get to study one of the current pieces of legislation, namely the Dodd-Frank Act, Solvency II, MiFID II or Basel III, in detail, but you do not get a good understanding of all other topics unless you can remember everything from the presentations of other students. I would say that the workload for this course definitely does not correspond to the 6 credits you get for it, considering that the presentations were fairly short (20 minutes per group). All in all, if you really want to get a grip of current regulations that target systemic risk, you are probably better off taking another course.

3. Economics of Housing (graduate level, 6 ETCS): Taught by Ph.D. Enzo Cerletti. The grade is based on the final exam. The course covers such topics as determinants of housing demand by households, implications of housing for different economic decisions and macroeconomic consequences of housing. The subjects are studied using both theory, e.g. adding housing to standard portfolio choice models, and empirical evidence from around the world. The aim of the course is very practical, e.g. what would happen if Denmark allowed home equity loans. Therefore, the course is quite useful, especially if you are interested in housing on a more macroeconomic level. However, the lectures themselves are quite uneventful, so this course is designed for rather patient students.

4. Hedge Funds and Alternative Investments (graduate, 6 ETCS): Taught by Prof. Dr. Loriana Pelizzon. The grade is based on a Matlab project and presentation (50%) and exam (50%). The contents of the course are said to cover the the first level of the CAIA exam, including statistical foundations, hedge fund strategies and performance, structured products, risk analysis and DD, portfolio optimization and management (you can get a more detailed picture by looking at chapters 1-6, 11-12, 18-19 and 23-30 of “CAIA Level I: An Introduction to Core Topics in Alternative Investments” written by Anson et al.) We also had guest lecturers: Dr. Torsten Dennin from Tiberius Asset Management AG, Lars Jaeger from Alternative Beta Partners and Marco Angheben from European Datawarehouse.

Overall, I expected more from the lectures and from the content, since the professor covered even the most trivial questions, such as what is a credit rating. However, the Matlab project was the highlight of the course, since it allowed everyone to significantly improve their Matlab skills while also giving a chance to study one topic in detail. Topics included: cointegration and statistical arbitrage, ABS factor models, CTAs / trend-following strategies, and ARCH/GARCH models and risk-parity strategy. Topics are prepared together with Dr. Jan Viebig, CFA, CEO and Head of Alternative Investments at Harcourt Investment Consulting AG.

I would say that most of the knowledge I gained during this course came from the Matlab project. I was expecting more from the actual contents of the course, so I would say this course is more like an introduction to hedge funds and alternative investments, and skips more detailed chapters on e.g. real estate and hedge fund strategies.

2.4. University campus

One of the things I enjoyed the most about Goethe University was its modern campus with seven buildings, one for each faculty. In addition to big auditoriums and smaller classrooms, each building features a café, which I found really convenient. There are two lunch places (that I know of), a lot of libraries (at least one per building, but the main building definitely has more than that, I lost count), as well as really nice surroundings. There is a big park just behind the House of Finance, as well as a small Korean garden (picture below), which is really nice for taking a break during the day.

3. Free time and other information

Cost of living in Frankfurt is one of the highest across Germany. This is mostly due to high rents, but the University offers student accommodation for 200-300 EUR/month. I was living in a private apartment, but all other exchange students that I met were able to get a student room/flat. In a flat, you will have your own room, as well as a private bathroom. However, the kitchen is shared with other students. On the other hand, food is not so expensive, and definitely much cheaper that in Finland. Plus, for the courses I took, I did not have to buy any books or even go to the library (except for a 20 € book for a German language course).

You have to pay a semester fee of around 300 €, for which you get a student card with a semester travel ticket (valid for the whole duration of your stay, although you may have to spend the first 1-2 weeks without the travel ticket while the card is being made). You also get free access to Palmengarten, a discount on the Call-a-bike service, and various discounts in shops and cafes from the AStA association.

I got to know most of the exchange students through the language course, and full-time students through other courses. Student organizations (general and for exchange students) organize a lot of events, including, but not limited to, trips to other cities (e.g. Heidelberg) / countries (France, Belgium), bar crawls, bowling nights, restaurant dinners and excursions to different museums and the stock exchange.

Frankfurt is a very polarized city, with bankers on one side and homeless people on the other. I have not experienced any safety issues, but it is generally not that safe in the evening, especially in central areas, such as the central train station. Other than that, the city is not that impressive apart from the financial district and the historical center, where you can also enjoy various events such as the Christmas market. The weather is definitely warmer than in Helsinki, but it rains a lot in late autumn and winter. Germans are generally not as considerate when talking to others as Finns, especially if you have to go to a government office, such as the register office. However, I was lucky and everyone was helpful and nice to me even in government offices.

Your student card allows you to travel for free in the state and even a little further, meaning you can visit such cities as Wiesbaden, Marburg and Kassel completely free of charge. Other than that, you can get cheap train tickets to other places, especially if you buy them in advance. Besides, student organizations arrange bus trips to different cities and even countries for a very good price. Given that Frankfurt is a big financial center, there are tons of events taking place both on campus and at company’s premises. The events taking place at Campus Westend can be found here: http://gfa.hof.uni-frankfurt.de/apex/f?p=103:30:2431916706363979::NO.

However, the list does not contain all the events taking place on campus. You can search for specific events on company websites. Examples of firms that organized events during my stay in Frankfurt: Morgan Stanley, Goldman Sachs, BlackRock, Credit Suisse, Nomura.

Other than professional events, there are plenty of things you can do and places you can visit, including the IAA International Motor Show, the zoo, Zeil (shopping street), the highest vantage point in Frankfurt called Main Tower, 37 museums, 109 galleries, 33 theaters, over 50 movie theaters and Opera, as well as go to nearby small towns with historical buildings like Kronberg im Taunus (accessible by S-Bahn).

4. Final comments

Looking back, I would not say that Goethe University is the best place to go if your goal is to get superior education. In my mind, the academic standards were lower than in Aalto. I felt like I was not challenged, and the workload for many courses did not correspond the 6 credits one got for them. However, you get to work and study with people who have worked in many different places, which is great, because you can learn something course-related, and at the same time get valuable information about different employers.

I would definitely recommend taking German language courses that are offered for free during the whole semester. I did not take the language courses because they overlapped with the courses I had chosen to attend at the university. But since I did not enjoy the courses that much in any case and ended up attending the university only 2-3 times a week at most (schedule was not that clear from the beginning), I would say I should have definitely chosen language courses over the university courses.

I found that Frankfurt is a great place to discover new things and people. It is really easy to take a car / train and go to nearby countries like Switzerland, Italy and France whenever you feel like it, which I enjoyed a lot. It also opened my eyes on many things related to my profession, since I got to network with many different people from some of the most renowned financial institutions around the world. This helped me understand that there is a whole world out there, which you just do not see if you reside in Finland. Like many other people, I have definitely become braver in everyday life, and this exchange semester even helped me with my fear of public speaking and general awkwardness in formal settings, such as interviews. I would not say I did something specifically to mend these problems. Instead, I would assume exchange works in mysterious ways. It also showed me that there is a world of opportunities waiting to be seized, and the most important thing is to just go for it.