25751 Financial Institution Management

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

Subject level: Postgraduate

Result Type: Grade and marks

Requisite(s): ((25742 Financial Management OR 25746 Financial Management: Concepts and Applications) AND 25741 Capital Markets)
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 application 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 with principles of asset liability management, strategic planning and responses to a changing environment in prudential supervision.

Subject objectives/outcomes

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

Understand and appreciate sound and practical banking practices
Understand the various risks faced in managing a financial institution and how they may be managed
Understand the nature and management of capital and liquidity
Understand yield curves and interest rate risk management
Understand foreign exchange risks
Understand banking risks.

Contribution to graduate profile

This subject contributes to the degree by exposing students to the core principles of financial institutions management. This subject begins with an examination of the risks and issues in managing a Financial Institution. We consider some of the major risks faced by Financial Institutions when they are making decisions. Intermediation performs an important role in development of an economy and hence Financial Institutions have an important place in our economy, and is a development of the broad appreciation of business practices sought in the Masters program.

Teaching and learning strategies

The subject will be taught using a combination of lectures and workshops. These classes will be supplemented with both printed and electronic learning materials and resources. The UTS web-based communication tool UTS Online will be used to share information and encourage interaction between staff and students.

Content

Introduction to the financial system and what makes financial institutions special?
Risks in banking
Measuring and evaluation bank performance and Financial Statement Analysis
Strategic planning and organisational growth
Understand the issues in establishing a cost of bank funds and loan pricing
Capital adequacy and the management of equity
Asset liability management and specifically interest rate risk and liquidity risk
International banking including Foreign Exchange Markets risk.

Assessment

Mid-semester exam (Individual)	35%
The mid semester exam is designed to assess students' understanding of the theories and concepts to demonstrate that students have met objectives 1-4.
Assignment (Group)	20%
This will assess students' understanding of the concepts of financial institutions management in a practical case study. This assignment will allow students to demonstrate that they have met objectives 1-6.
Final Exam (Individual)	45%
This exam, consisting of multiple choice and short answer questions, will test students' understanding of the theory and their ability to apply the theory to financial institutions management. This will enable students to demonstrate that they have met objectives 1-6.

Recommended text(s)

Gardiner, M.J, Mills, D.L, Cooperman, E.S; (2000) Managing Financial Institutions, An Asset/Liability Approach, 4th edition Dryden Press, Orlando.

Indicative references

Hogan, W., Avram. K.J., Brown, C., Ralston, D., Skully, M., Hempel, G., and Simonson, D. (2001) Management of Financial Institutions, 1st Australasian edition. Wiley.

Fraser, D.R, Gup, B.E, Kolari, J.W; (2001) Commercial Banking, the Management of Risk, South Western Publishing Ohio

Hughes, J.E, MacDonald, S.B, (2002) International Banking Text and Cases, Addison Wesley, Boston

Rose, P.S; (1999) Commercial Bank Management, 4th Edition, McGraw-Hill Irwin, Singapore

Valanine, T and Ford, G; (1999) Readings in Financial Institution Management, Allen and Unwin, Sydney

Saunders, A and Cornett, M.M (2001) Financial Markets and Institutions, a Modern Perspective, McGraw-Hill Irwin, New York

Saunders, A and Cornett, M.M (1999) Fundamentals of Institutions Management, McGraw-Hill Irwin, New York.