Course Information Undergraduate prospectus

Banking: Principles, Practice and Regulation

Course summary

Course code: FINA1094
Level: 5
Credits: 30
School: Business Faculty
Department: Accounting and Finance
Course Coordinator(s): Olufemi Decker

Specification

Aims

This course introduces students to the principles and practice of modern banking and its regulation in an international context. The course covers the rationale for the existence and regulation of banks, functions of major types of banks and explores how banking meets a range of payments, savings, and investment and risk management needs that exist in modern societies. Attention will be paid to banks' balance sheets, management of the risks that are inherent in various banking operations and strategies. Students will also explore the structure of banking indifferent countries and topical issues in banking. The aim of this course is to introduce students to the principles and practice of modern banking and its regulation in an international context. The course covers the rationale for the existence and regulation of banks. Students will also explore the structure of banking in different countries and topical issues in banking. Attention will be paid on the effect of the crisis on the banking sector and how the banking industry has changed since then. A corollary aim of this course is to expose students in the various ways of estimating bank performance, risk, competition and other relevant measures by using real bank data.

Learning outcomes

On completing this course successfully students will be able to:

1. Identify and review banks’ major risks, risk management techniques and strategies

2. Research and analyse structural developments and trends in banking and their impact on banks operations and performance

3. Discuss regulatory issues that arise in banking and examine the rationale for and principles of financial regulation

4. Be able to estimate bank performance, risk, and efficiency and competition measures and understand their relevance in explaining issues of systemic risk, regulation and the financing conditions in the economy.

5. Understand the dynamic changes of the banking industry and the policy responses because of the recent crisis

6. Explain ethical issues in banking and consider their implications for conduct of business.

Indicative content

• Framework of Financial Intermediation
• Commercial and Investment Banking (add emergence of shadow banking)
• International Banking (add the impact of foreign banks in host economies)
• Comparative Banking Structures
• Bank lending, credit principle and assessment (add emergence of new lending technologies to overcome information asymmetries (fixed asset lending, credit scoring tech etc, lending regulation (collateral etc), soft and hard information (Credit information sharing))
• Central Banks (add: Monetary Policy and Quantitative Easing: Rationale and effects on Bank Risk)
• Banks’ Balance Sheets and Income (add emerging issues in terms of diversification)
• Asset and Liability Management
• Banks’ Financial Risks and measurement
• Effects of the crisis on bank industry performance, structure and regulation
• Bank Ownership: Private Vs state-owned banks

Teaching and learning activity

Learning and teaching will take place through: ‐ 1.5 hour weekly lectures; ‐ one hour tutorials; ‐ student reading and research outside class, including preparation for tutorial participation. The use of real bank data will apply in relevant lectures (from the part of the lecturer) and also in tutorials (from the part of the students).

Assessment

Methods of SUMMATIVE Assessment: Essay
Outcome(s) assessed by summative assessment (Please use the numbers above to refer to these): 1-5
Grading Mode Numeric
Weighting % 40 %
Pass Mark 40 %
Word Length 2,500
Outline Details: An essay that will examine a contemporary issue in banking. Bank data processing will be required.

Methods of SUMMATIVE Assessment: Exam
Outcome(s) assessed by summative assessment (Please use the numbers above to refer to these): 1-6
Grading Mode Numeric
Weighting % 60 %
Pass Mark 40 %
Word Length n/a
Outline Details: Closed book exam with optional questions. All questions carry equal mark weight.