FIN 3601 Commercial Bank Financial Management

APPLIES TO ACADEMIC YEAR 2015/2016
Norwegian version

FIN 3601 Commercial Bank Financial Management


Responsible for the course
Emanuel Blattner

Department
Department of Accounting - Auditing and Law

Term
According to study plan

ECTS Credits
7,5

Language of instruction
Norwegian

Introduction
Management of financial institutions is a part of business economics, which consists of knowledge achieved in finance, managerial economics, microeconomics and statistics. The aim of the course is to improve the students’ knowledge and skills in business economics as well as the use of tools of monetary policy. The course has a special focus on a risk approach in asset and liability management and liquidity risk. Due to high volatility in interest rates and foreign exchange rates, managing financial institutions has become more dependent on advanced tools of asset and liability management and the use of derivatives such as futures, options, caps, floors and collars.

Learning outcome
Acquired knowledge
After taking the course, the students shall be able to explain key concepts and give an account of the tools of monetary policy, the tools used in asset and liability management, statements of income and cash flow analyses and the use of derivatives in asset an liability management.

Examples of concepts that students shall be able to explain:

  • Monetary policy of the Central Bank
  • Behaviour of interest rates
  • Balance sheet, statement of income and cash flow in financial institutions
  • The term structure of interest rates
  • Repricing gap
  • Duration gap, duration of equities
  • Futures and forwards, interest rate swaps, interest rate options.

Acquired skills
After taking the course, the students shall be able to (a) apply knowledge (i.e. concepts and skills) in analyses and discussions on asset and liability problems, (b) distinguish between relevant and irrelevant information, and (c) give written answers to questions so that the readers understand the applied methods and conclusions. Examples:
  • Understanding the use of the FED’s monetary policy
  • Understanding interest rates
  • Analyzing financial reports of financial institutions
  • Risk in financial institutions
  • The use of the term structure of interest rates in asset an liability management
  • The calculation of the repricing gap
  • Duration gap calculations
  • Equity duration
  • The use of on-balance immunizing in asset and liability management
  • The use of derivatives in off-balance immunizing

Reflection
After taking the course, the students should be able to ask critical questions and reflect on crucial assumptions and theories within the asset and liability management field.

Prerequisites
Knowledge equivalent to the 2nd year of the Bachelor of Business Administration Program in Finance.

Compulsory reading
Books:
Saunders, Anthony, Marcia Millon Cornett. 2014. Financial institutions management : a risk management approach. 8th ed., International ed. McGraw-Hill Education. 300 s

Book extract:
Mishkin, Fredric. The economics of money, banking and financial markets. 2013. Pearson - Deles ut i klassen.. Part 4 (Chapter 13, 14, 15 and 16), appr. 106 pages..
Available at: https://www.dawsonera.com.ezproxy.library.bi.no/readonline/9780273792994/startPage/8

Recommended reading
Books:
Steigum, Erling. 2004. Moderne makroøkonomi. Gyldendal akademisk. Kap. 2. (Dette er samme bok som ble brukt i kurset SØK 3525 Makroøkonomi for økonomer på 2. år)

Other:
Økonomiske perspektiver - Årstale av sentralbanksjef Øystein Olsen. Siste version. Norges Bank. http://www.norges-bank.no/Upload/82421/arstale_2011_norges_bank.pdf


Course outline
    1. Tools of monetary policy
    2. Overview of banking and the financial services industry
    3. Sources and uses of bank funds and the risk of banking
    4. Accounting and economic models of banking performance and valuation
    5. Liquidity risk
    6. Interest rate risk
    7. Asset and liability management and the interest rate risk
    8. Profit planning and budgeting
    9. Excel risk simulations

    Computer-based tools
    Excel spreadsheets (Solver and RISK)

    Learning process and workload
    The course consists of 35 hours of lectures, and 10 hours of case studies that are supervised by the lecturer.
    Recommended use of hours:
    Activity
    Use of hours
    Lectures
    35
    Casestudies*
    10
    Reading literature and preparation for lectures
    151
    Final examination
    4
    Total use of hours recommended
    200
    *Casestudies are supervised by the lecturer



    Examination
    A four-hour individual written examination concludes the course.
    Examination code(s)
    FIN 36011 Written exam, counts 100% towards the final grade in FIN 3601, Commercial Bank Financal Management, 7,5 credits.

    Examination support materials
    BI approved exam calculator. Examination support materials at written examinations are explained under examination information in the student portal @bi. Please note use of calculator and dictionary in the section on support materials (https://at.bi.no/EN/Pages/Exa_Hjelpemidler-til-eksamen.aspx).

    Re-sit examination
    This course will be lectured for the last time spring 2016. Last re-sit exams will be offered autum 2016 and apring 2017.

    Additional information

    Semester

    Oversettelser