FIE444 Bank Management
Spring 2019Autumn 2019
The outline for the course is as follows (the numbering does not refer to separate lectures):
- What is a bank and why do they exist? The special roles of banks and other financial institutions.
- The risks facing a bank:
- Interest rate risk
- Credit risk
- Market risk
- Foreign exchange risk
- Operational risk
- Banks in the financial markets
- Asset/Liability management of a bank ¿ and other financial institutions
- The regulatory framework, its motivation and impact
- How to value and evaluate banks and other financial institutions
- The commercial challenges facing a bank
- Bank market dynamics and current trends and challenges
In addition, guest lectures will be invited to cover specific topics as seen from alternative angles. Likely guest lecturers will be commercial bank managers, regulators, equity research analysts, and/or credit rating experts. Students will be invited into challenging discussions with the guest lecturers.
The course will provide an understanding of banks and other financial intermediaries with an institutional perspective. The latter implies the role of banks in the economy with a strong focus on strategic and operational issues facing bank management and their clients/partners in the marketplace. These issues include institutional and industry insight, relationship banking, risk management, valuation, regulations, capital markets etc. Specific issues related to investment banking, asset management, and insurance will also be covered to some degree. The course will be taught as a combination of lectures, cases and guest lectures from the industry. The course will be particularly relevant for students seeking a career in banking, regulation, credit rating, or the finance function of larger corporations.
Upon completion of the course, the candidate shall be able to:
- explain the roles of banks and financial intermediaries in general in an economy
- display an advanced and integrated understanding of the core issues facing bank managers.
- identify the relevant risks facing a bank
- know the most important laws, regulations and supervision of banks and other financial institutions
- know the competitive dynamics of the banking markets, as well as current trends and challenges.
- value and assess the performance and quality of banks and financial institutions
- measure and principles of managing different risks that a bank meets
- commercially analyse the profitability of representative bank products
- understand banks' role and interaction with financial markets (e.g. interest-, credit-, and currency markets)
- have applicable insight in bank's rational behaviour and how it relates both to regulation and society as well as to companies and individuals.
The topics will primarily be taught through lectures, but allowing room for student discussions in class. Some topics will also be covered through cases and student exercises. The lectures will be supplemented by 2 - 3 directly related guest lectures by experienced practitioners.
Lecture notes will be made available on the course webpage ahead of each lecture. It is the student's responsibility to check the documentation and other instructions on the course's webpage.
The lectures will be video-taped as backup, but students are strongly advised to attend lectures if at all possible.
There is no restricted access in the course, subject to the prerequisites regarding prior knowledge
This is an advanced course and students taking it are required to know the core concepts from courses like FIE400 Investments/Finansmarkeder, FIE401E Methods in Empirical Finance, and FIE402 Corporate Finance. This implies taking at least 2 of the 3 mentioned courses before or in parallel with this course or equivalent courses at other institutions. In addition, the course requires good English oral and written skills.
Requirements for course approval
2 approved assignments
Exam, written (4 hours): 70%. Case report: 30 %
Both the exam and the case assignment will only be given in English and shall be answered in English.
Grading scale A - F.
Excel, Word and relevant data-sources will suffice.
Saunders/Cornett: Financial Institutions Management: A Risk Management Approach, 9th Edition, McGrawHill, 2017
In addition, relevant additional material in the form of research papers, book chapters and industry relevant reports will be made available for the students on Its learning.
- ECTS Credits
- Teaching language
Autumn. Not offered Autumn 2018
Associate Professor Aksel Mjøs, Department of Finance, NHH