Faculty of Business: Finance and Economics
Credit points: 6 cp

Subject level: Undergraduate

Result Type: Grade and marks

Requisite(s): 25556 The Financial System
These requisites may not apply to students in certain courses.
There are also course requisites for this subject. See access conditions.

Handbook description

This subject teaches the fundamentals of managing a financial institution. The principles are applied in the context of banks, but have a wider relevance to the management of non-bank financial institutions. The structure of the financial system and problems posed by managing financial institutions in today's environment are given real-time practical applications in case studies which assess the performance of financial institutions from a creditor's, investor's and regulator's viewpoint. Case studies of bank failure and success are interposed among principles of asset liability management, strategic planning and responses to a changing environment in prudential supervision, e-commerce and new taxation treaties.

Subject objectives/outcomes

On successful completion of this subject students should be able to:

1. Understand and appreciate various aspects of sound management of modern financial institutions
2. Understand the importance of risk management in financial institutions
3. Analyse the performance and risks inherent in different types of financial institutions
4. Appreciate the ethical issues involved in the management of financial institutions.

Contribution to graduate profile

This subject provides knowledge of financial institutions as part of the banking major. The students gain the knowledge of managing a financial institution and develop an appreciation of issues faced by them in the integrated global market environment.

Teaching and learning strategies

The course is presented in a combination of lectures and workshops. Lectures are supplemented with both printed and electronic learning materials and resources.

Content

• Structure of financial institutional, regulation and risks in banking
• Key risk and return indicators in evaluation of bank performance
• Management of interest rate risk and liquidity risk
• Asset liability management
• Capital adequacy and management of equity funds
• Strategic planning and channels for future growth
• Globalisation and international banking
• Issues in prudential supervision and international taxation laws.

Assessment

Case Study (Group)	25%
The case study will assure objectives 1, 2, 3 and 4. Studetns will be assessed on their understanding of the theories and concepts associated with managing financial institutions.
Mid-Semester Examination (Individual)	25%
The mid semester examination assures objectives 1 and 2. It tests students' understanding of issues relevant to managing financial institutions in Australia.
Final Examination (Individual)	50%
The final examination test students' understanding of the theories, risk management and issues covered in the course. Students are required to demonstrate their knowledge of techniques for managing financial institutions. It assures objectives 1-4.

Examinations will be conducted under University examination conditions, and hence thoroughly address concerns regarding secure assessment. The case study will be secured through a combination of updating of assessment tasks across semesters and/or plagiarism detection software.

Recommended text(s)

Hogan, W. Avram, K.J., Brown, R., Degabriele R., Ralston, D., Skully, M., Hempel, G., Simonson, D. and Sathye, M. (2004) Management of Financial Institutions, 2nd ed. John Wiley and Sons, Australia.

Indicative references

Valentine, T., Ford, G. and Copp, R. (2003) Financial Markets and Institutions in Australia, Pearson, Australia.

Weaver, P.M. and Kingsley, C. (2001) Banking and Lending Practice, 4th ed. LBC Information Services, Australia.