CORPFIN 2501 - Financial Institutions Management II

North Terrace Campus - Semester 1 - 2015

This course provides an introduction to the management of financial institutions and intermediaries. The course focuses on the importance of ensuring good organizational functioning within institutions to manage the varied types of risk that they may be exposed to. Students are first introduced to the construct of the firm as a legal entity, and how financial institutions have specific requirements that relate to this. The course then examines the principles of the theory and practice of effective organizational structure and policies for successful risk management and how to manage the inter-relationships that are inherent between departments. Students are also introduced to international standards of banking practice and how they impact the functioning of the institutions plus how to define and measure various types of risk these institutions can be exposed to.

  • General Course Information
    Course Details
    Course Code CORPFIN 2501
    Course Financial Institutions Management II
    Coordinating Unit Business School
    Term Semester 1
    Level Undergraduate
    Location/s North Terrace Campus
    Units 3
    Contact Up to 3 hours per week
    Available for Study Abroad and Exchange Y
    Assumed Knowledge ECON 1008, ECON 1000 & ECON 1009
    Course Description This course provides an introduction to the management of financial institutions and intermediaries. The course focuses on the importance of ensuring good organizational functioning within institutions to manage the varied types of risk that they may be exposed to. Students are first introduced to the construct of the firm as a legal entity, and how financial institutions have specific requirements that relate to this. The course then examines the principles of the theory and practice of effective organizational structure and policies for successful risk management and how to manage the inter-relationships that are inherent between departments. Students are also introduced to international standards of banking practice and how they impact the functioning of the institutions plus how to define and measure various types of risk these institutions can be exposed to.
    Course Staff

    Course Coordinator: Dr Erin Derina

    Dr. Ratna Derina (Erin) 
    Location: Room 12.37 , 10 Pulteney Street
    Telephone: :8313 7137
    Email: ratna.derina@adelaide.edu.au

    Dr. Tariq Haque
    Location :Room 12.22 , 10 Pulteney Street
    Telephone :8313 7599
    Email : tariq.haque@adelaide.edu.au
    Course Timetable

    The full timetable of all activities for this course can be accessed from Course Planner.

  • Learning Outcomes
    Course Learning Outcomes
    This course provides an introduction to the management of financial institutions and intermediaries. It examines the principles of the theory and practice of effective organizational policies for successful risk management. Students are first introduced to how to define and measure financial institutions performance and various types of risk financial institutions can be exposed to. Students are also introduced on how to manage the risks including the international standards of banking practice and how they impact the functioning of the institutions.

    On successful completion of  this course, students should be able to :
    • Understand the theories of financial intermediaries and the importance role of financial institutions in the global economy
    • Evaluate the performance of different types of financial institutions
    • Identify the main types of risk financial institutions are exposed to 
    • Apply different methods to measure those risks to suit different contexts
    • Propose methods to manage the risks 
    • Apply the international standards of banking practice where appropriate
    University Graduate Attributes

    This course will provide students with an opportunity to develop the Graduate Attribute(s) specified below:

    University Graduate Attribute Course Learning Outcome(s)
    Knowledge and understanding of the content and techniques of a chosen discipline at advanced levels that are internationally recognised. Develop students abilities to understand the theories of financial intermediaries and the application of the international standards of banking practice.
    The ability to locate, analyse, evaluate and synthesise information from a wide variety of sources in a planned and timely manner. Develop students abilities to analyse and evaluate the performance and risk exposures of different types of financial institution based on their financial reports from different sources.
    Skills of a high order in interpersonal understanding, teamwork and communication. Develop students abilities to work in groups and undertake a group project report.
  • Learning Resources
    Required Resources
    Lange, H., A. Saunders, M.M. Cornett (LSC) , “Financial Institutions Management” , Third Edition, McGraw Hill/Irwin ( 2012)

    Recommended Resources
    Supplementary Textbook :
     Crouhy, M., D. Galai and R. Mark., “ The Essentials of Risk Management” MGraw Hill (2006)

    Additional Reading :

    Topic 1 :Financial Services Industry
    1. Lewllyn D T, “Banking in the 21st century : The transformation of an industry “ in Readings in Financial Institution management : Modern Technique for a global industry edited by Tom Valentine and Guy Ford, Allen &Unwin (1999)
    2. Australian Prudential Regulatory Authority, “Overview of the Australian Deposit-taking Sector”, APRA Insight (1), 2006.

    Topic 2 : Performance Analysis and Measuring Risk Exposures
    Saunders, J. M.M. Cornett appendix 7A in “Financial Institutions Management, 6th edition McGraw Hill/Irwin (2008)

    Topic 10: Managing Risk : Liability and liquidity Management
    Lange, H., A. Saunders,J.A. Anderson, D. Thomson, M.M. Cornett (LSATC) , chapter 16 (pages 413-417) in “Financial Institutions Management” , Second Edition, McGraw Hill/Irwin ( 2007)
  • Learning & Teaching Activities
    Learning & Teaching Modes
    Lectures are supported by problem-solving tutorials developing material covered in lectures.
    Workload

    The information below is provided as a guide to assist students in engaging appropriately with the course requirements.

    The University expects full-time students (i.e. those taking 12 units per semester) to devote a total of 48 hours per week to their studies. This means that students are expected to commit approximately 9 hours for a three-unit course or 13 hours for a four-unit course, of private study outside of your regular classes. Students in this course are expected to attend all lectures throughout the semester plus one tutorial class each week.
    Learning Activities Summary

    Week

    No

    Topic

    Reading

    Lecturer

    1

    1

    Introduction

     

    Erin

     

     

    Overview of Financial Institutions

    LSC : Ch 1

     

     

     

    Depository Institutions

    LSATC Ch 2, Lewllyn

     

     

     

    Non Depository Institutions

    LSTAC Ch3

     

    2

    2

    Measuring Financial Performance

     

    Tariq

     

     

    Financial Statement and Analysis

     Saunders Appendix 7A, LSC app 2A

     

     

     

    Concepts of Risk Management

    LSC, CH4

     

     

     

    Measuring Risk Exposure

     

     

    3

    3

    Interest rate risk (Maturity Model)

    LSC app 5a

    Tariq

    4

     

    Interest rate risk (Duration & Repricing Models)

    LSC : Ch 6 & 5

    Tariq

    4 &5

    4

    Credit Risk

    LSC : Ch 10 &11

    Tariq

    6

     

    Mid Semester Test

     

     

    7

    5

    Foreign Exchange Risk

    LSC : Ch 13

    Tariq

    7

    6

    Off-balance sheet Activities

    LSC : Ch 16

    Erin

    8 &9

    7

    Assignment and Market Risk

     LSC : Ch9

    Erin

    9 &10

    8

    Liquidity Risk

    LSC ; Ch14

    Erin

     

     

    Managing Risk

     

     

    10 &11

    9

    Liability and Liquidity Management

    LSC: Ch15, LSTAC 2nd ed ch 16, pg 413-417

    Erin

    11 &12

    10

    Capital Adequacy

    LSC: Ch18

    Erin

    12

    11

    Securitisation

    LSC: Ch8

    Erin

    13

    12

    Review

    All

    Erin

    Small Group Discovery Experience
    There are 2  related projects to be completed by students in a group of 4 people. The objectives of the projects are for students to undertake independent research on banks’ activities and risk management as well as to assess the impacts of financial crisis on banks’ activities, performance and risk exposure.

    Students will have to choose 2 different banks. The period of analysis is from 2008 to 2013 to capture the impacts of global financial crisis and European debt crisis. Students are required to clearly explain their motivations and objectives of choosing the banks and to undertake their own research on the banks by gathering information required from the banks’ financial reports, market and industry analysis etc. Project 1 will be due in week 8 whilst the second project will be due in week 12.  It is compulsory for students to have meetings (at least one meeting per project) with the lecturers or tutors during the completion of the projects.
  • Assessment

    The University's policy on Assessment for Coursework Programs is based on the following four principles:

    1. Assessment must encourage and reinforce learning.
    2. Assessment must enable robust and fair judgements about student performance.
    3. Assessment practices must be fair and equitable to students and give them the opportunity to demonstrate what they have learned.
    4. Assessment must maintain academic standards.

    Assessment Summary
    The assessment consists of tutorials, mid semester test, group projects and final examination.

    o Tutorial classes will be held commencing the week beginning Monday, March 9th (week 2).
    Mark on tutorial is given for active participation and submission of work on tutorial questions. Student will not receive mark for attending tutorials only, without actively participate. Student who copies tutorial answers from the textbook manual or any other sources will receive mark of zero for submission of work.

    o Mid Semester Test will be held in week 6, covers topics 1 to 3.
    Student who does not sit the mid semester test and does not provide evidence of adequate reason (e.g. illness or unavoidable work commitment) will receive mark of zero for the test which will not be redeemable (i.e. test will still count for 20 percent of final mark) Student who misses the mid semester test and provides evidence of adequate reason will have weighting on the final exam increased by 20 percentage points.

    o Group projects are to be done in a group of maximum 4 people.
    Group members can be from different tutorial classes. All team members are expected to contribute approximately equally to a group assignment.

    o Final exam is a closed book exam, covers all topics. No minimum mark for the final exam is required to pass the course.
    Assessment Detail
    The assessment components are as follows:

    Tutorial                       10%
    o Participation 5%
    o Submitted Work 5%

    Mid Semester Test      20%
    Will be held in week 6

    Group Projects            30%
    Project 1 :            15% 
    Due by 4pm on Friday, May 8th(week 8) 
    Project 2 :            15% 
    Due by 4pm on Friday, June 5th (week 12) 

    Final Exam                   40%.

    Bonus mark for project consultation : 5%
    Submission
    Group assignment reports should be submitted as hardcopy as well as sent electronically by 4pm on Friday, May 8th (Project 1)  and Friday, june 5th (Project 2)

    • The hardcopy of the reports should be submitted into the assignment box in the Professions Hub on the ground floor, 10 Pulteney Street.
    • The reports should also be submitted electronically via the Turnitin Assignment tool on MyUni by the group leader. The link for the Turnitin Assignment tool have been created for you under the Assignment page entitled “FIM Group Assignment Submission”in the MyUni site.
    You can upload your assignment directly by following the prompts. For guidance on how to submit your assignment electronically via MyUni, go to http://www.adelaide.edu.au/myuni/tutorials/ and click on the “Submit an Assignment” tutorial. You will need to upload a Word  or pdf version of your assignment to Turnitin.
    Hardcopy and softcopy need to be identical. Penalties of 5 % will apply for every day late.

    Presentation of Assignments

    •• Students must retain a copy of all assignments submitted.
    • When submitting the hardcopy of your assignment, please attach a ‘ Group Assignment Cover Sheet’, which must be signed and dated by all group members before submission. Lecturers can refuse to accept assignments, which do not have a signed acknowledgement of the University’s policy on plagiarism.

    Assignment Guidelines including Referencing Details
    A copy of the Postgraduate Programs: Communication Skills Guide will have been given to you at the beginning of your program. This guide will assist you structure your assignments. A copy of the guide can also be downloaded from http://www.business.adelaide.edu.au/current/mba/download/2009MBACommSkillsGuide.pdf This publication also provides guidelines on a range of other important communication skills including writing essays and management reports, making oral presentations etc.

    In preparing any written piece of assessment for your undergraduate studies it is important to draw on the relevant ‘literature’ to support critical analysis. Also essential is to reference the literature used. Correct referencing is important because it identifies the source of the ideas and arguments that you present, and sometimes the source of the actual words you use, and helps to avoid the problem of plagiarism. (Further information on plagiarism is provided later in this course outline.)

    The Harvard system is widely used in the Business School. Guidelines for the use of this style of referencing can be found in the Communication Skills Guide. Further assistance with referencing is available from the Faculty’s Learning Support Advisors. The contact details are provided on page 6 of the Communication Skills Guide.

    Late Assignment Submission
    Students are expected to submit their work by the due date to maintain a fair and equitable system. Extensions will generally only be given for medical or other serious reasons. All requests for extensions must be emailed to the lecturer in charge of the course before the due date. Each request will be assessed on its merits.
    A late assignment (without prior arrangement) will be penalised by a 5% mark reduction for each day that it is late. 

    Return of Assignments
    Lecturer’s aim to mark and return assignments to students within two (2) weeks of the due date with written feedback. Students are responsible for collecting their marked assignments from either their tutorials or lectures. If assignments aren’t collected after two (2) weeks, the assignments will be available at the Student Hub for two (2) weeks. 
    Course Grading

    Grades for your performance in this course will be awarded in accordance with the following scheme:

    M10 (Coursework Mark Scheme)
    Grade Mark Description
    FNS   Fail No Submission
    F 1-49 Fail
    P 50-64 Pass
    C 65-74 Credit
    D 75-84 Distinction
    HD 85-100 High Distinction
    CN   Continuing
    NFE   No Formal Examination
    RP   Result Pending

    Further details of the grades/results can be obtained from Examinations.

    Grade Descriptors are available which provide a general guide to the standard of work that is expected at each grade level. More information at Assessment for Coursework Programs.

    Final results for this course will be made available through Access Adelaide.

  • Student Feedback

    The University places a high priority on approaches to learning and teaching that enhance the student experience. Feedback is sought from students in a variety of ways including on-going engagement with staff, the use of online discussion boards and the use of Student Experience of Learning and Teaching (SELT) surveys as well as GOS surveys and Program reviews.

    SELTs are an important source of information to inform individual teaching practice, decisions about teaching duties, and course and program curriculum design. They enable the University to assess how effectively its learning environments and teaching practices facilitate student engagement and learning outcomes. Under the current SELT Policy (http://www.adelaide.edu.au/policies/101/) course SELTs are mandated and must be conducted at the conclusion of each term/semester/trimester for every course offering. Feedback on issues raised through course SELT surveys is made available to enrolled students through various resources (e.g. MyUni). In addition aggregated course SELT data is available.

  • Student Support
  • Policies & Guidelines
  • Fraud Awareness

    Students are reminded that in order to maintain the academic integrity of all programs and courses, the university has a zero-tolerance approach to students offering money or significant value goods or services to any staff member who is involved in their teaching or assessment. Students offering lecturers or tutors or professional staff anything more than a small token of appreciation is totally unacceptable, in any circumstances. Staff members are obliged to report all such incidents to their supervisor/manager, who will refer them for action under the university's student’s disciplinary procedures.

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