Australian School of Business School of Banking and Finance

FINS5530 FINANCIAL INSTITUTION MANAGEMENT

COURSE OUTLINE SEMESTER 2, 2009

TABLE OF CONTENTS
1. STAFF CONTACT DETAILS 2. COURSE DETAILS 2.1 Teaching Times and Locations 2.2 Units of Credit 2.3 Summary of Course 2.4 Course Aims and Relationship to Other Courses 2.5 Student Learning Outcomes 3. LEARNING AND TEACHING ACTIVITIES 3.1 Approach to Learning and Teaching in the Course 3.2 Learning Activities and Teaching Strategies 4. ASSESSMENT 4.1 Formal Requirements 4.2 Assessment Details 4.3 Assessment Format 4.4 Assignment Submission Procedure 4.5 Late Submission 5. ACADEMIC HONESTY AND PLAGIARISM 6. COURSE RESOURCES 7. COURSE EVALUATION AND DEVELOPMENT 8. STUDENT RESPONSIBILITIES AND CONDUCT 8.1 8.2 8.3 8.4 8.5 8.6 Workload Attendance Special Consideration and Supplementary Examinations General Conduct and Behaviour Occupational Health and Safety Keeping Informed 1 1 1 1 1 1 2 2 2 3 3 3 4 4 4 4 4 5 5 5 6 6 6 6 6 7 7 7

9. ADDITIONAL STUDENT RESOURCES AND SUPPORT 10. COURSE SCHEDULE

1. STAFF CONTACT DETAILS
Jianfeng Shen (Lecturer in Charge, Lecturing weeks 7-12) Room: ASB337 Tel No: 9385 4581 Email: jianfeng.shen@unsw.edu.au Consultation: Monday: 1 – 2:30pm Vic Edwards Senior Lecturer in Charge (Lecturing weeks 1 – 6) Room: ASB354 Tel No.: 9385 5860 Email: v.edwards@unsw.edu.au Consultation: Tuesday: 3.00 pm to 4.30 pm Students with queries regarding course administration or lecture contents should: • • • Check WebCT Vista site (especially for announcements) and their UNSW student email accounts See lecturer responsible during his/her consultation times Email the responsible lecturer using your UNSW student email address

2. COURSE DETAILS
2.1 Teaching Times and Locations Lectures: WEDNESDAY WEDNESDAY Tutorials: This course has no formal tutorials but there are structured discussion groups covering key previous lecture topics. 2.2 Units of Credit This course has 6 units of credit and 3 contact hours per week 2.3 Summary of Course This course provides an overview of the financial risk management of Australian financial system, its institutions and markets. 2 pm – 5 pm Room: Macauley Theatre (Quad 1027) 6 pm – 9 pm Room: Macauley Theatre (Quad 1027)

2.4 Course Aims and Relationship to Other Courses The unifying theme in this course is the application of modern finance theory to the financial decision making and management of banks and non-bank financial institutions. The subject of bank and financial institution decision-making is approached from a risk perspective. The course covers the major decision areas for financial institutional management within the framework of a regulatory and

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"corporate responsible" environment. The main topics covered are bank risk and its management including interest rate risk, off-balance-sheet risk, credit risk, liquidity risk, foreign exchange risk and operational risk within an Australian and international context.. The course provides a cornerstone to many of the other courses offered in the School of Banking and Finance. 2.5 Student Learning Outcomes At the conclusion of the course students are expected to be able to: 1. Identify the main types of risk confronted by financial institutions; 2. Apply relevant techniques to measure and manage those risks; and 3. Understand the main regulations and operations of financial institutions within such regulations. 4. Engage in informed discussion of some of the contemporary issues in an Australian and international context, affecting financial institutions and their owners, managers, employees and customers. Graduate Attributes
Course Learning Outcomes ASB Graduate Attributes 1. Critical thinking and problem solving 2. Communication 3. Teamwork and leadership 4. Social, ethical and global perspectives 5. In-depth engagement with relevant disciplinary knowledge 6. Professional skills

1,2, 4 2, 4 4 1,2, 4 1,2,3, 4 1,2,3, 4

3. LEARNING AND TEACHING ACTIVITIES
3.1 Approach to Learning and Teaching in the Course As a postgraduate course, independent learning from students is expected and this is what essentially distinguishes such a course from an undergraduate one. The course will draw on concepts, issues and practical information from the textbook, academic and financial press articles, as well as websites of relevant financial services regulators. Students are therefore required to read and understand these materials and their relevance. Students are also expected to extend and apply their knowledge acquired in the lecture to current issues discussed in the financial press.

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A large part of the course is quantitative in nature, which reflects the skills required to work in today banking and other financial services environments. Inclass discussion sessions are designed so that students can practice their problemsolving skills and receive appropriate feedback. It is essential that students utilise these discussion times to actively participate in the discussion of prescribed questions and raise questions with lecturers regarding areas where further reviews are necessary. In keeping with post-graduate studies, experts from regulatory authorities and industry have been invited to participate in some of the lectures to give talks and to be discussants. A special feature that the lecturers in this course will endeavour to deliver is an analysis of the sub-prime market issues relevant to the course as the sub-prime crisis seriously impacted upon the financial services industry of all countries. This topic has not been reflected in textbooks as yet and will be a bonus for students of this course. Lectures 2, and 9 to 12 are especially relevant.

3.2 Learning Activities and Teaching Strategies The 3 hours of lectures each week will complement the compulsory text and other readings for the course by (1) outlining the main issues relevant to the topic, (2) reinforcing the analytical material in the required readings, (3) introducing relevant material not adequately covered in the text, and (4) drawing on recent developments in financial system markets both in Australia and globally. The lectures incorporate a seminar/discussion session aimed to assist students in problem solving, clarifying lecture materials, and facilitating discussions on topics covered in the lecture of the previous week. After each lecture, students will be given a list of discussion questions from the lecture and are required to attempt to answer the prescribed discussion questions before the following lecture. To complement the learning process, students will be formed into groups and will be asked to present on the discussion topics from the previous week’s lecture.

4. ASSESSMENT
4.1 Formal Requirements In order to pass this course, you must: achieve a composite mark of at least 50; and make a satisfactory attempt at all assessment tasks

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4.2 Assessment Details
Assessment Task Midsession Exam Group Presentation Final Exam Weighting Learning Outcomes assessed 1, 2, 3 1, 2, 3, 4 1, 2, 3, 4 ASB Graduate Attributes assessed 1, 4, 5, 6 1, 2, 3, 4, 5, 6 1, 2, 4, 5, 6 Due Date Week 6 TBA Refer

35% 15% 50%

Examination

Timetable

4.3 Assessment Format • Mid-session exam (35 marks): this is a 2-hour exam to be conducted during week 6 .The exam will consist of multiple-choice questions based upon materials from the first 5 weeks of the course. The exam venue will be announced by the end of week 5.
•

Group Presentation (15 marks): Students will be divided into groups to present topics of current interest. Appendix A indicates how the presentations will be marked. Where groups feel that group members are not participating at a satisfactory level, the lecturer in charge should be provided with a letter signed by the other group members. Groups will be formed in Week 1. Final exam (50 marks): this is a 3-hour exam which will consist of both multiple-choice and short-answer/essay questions. The exam venue and scope of coverage will be announced towards the end of the course. The final examination will based upon materials from week7 to week 12 of the course.

•

4.4 Assignment Submission Procedure Not applicable

4.5 Late Submission Not applicable

5. ACADEMIC HONESTY AND PLAGIARISM
The University regards plagiarism as a form of academic misconduct, and has very strict rules regarding plagiarism. For UNSW’s policies, penalties, and information to help you avoid plagiarism see: http://www.lc.unsw.edu.au/plagiarism/index.html as well as the guidelines in the online ELISE tutorial for all new UNSW students: http://info.library.unsw.edu.au/skills/tutorials/InfoSkills/index.htm.

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6. COURSE RESOURCES
The prescribed textbook for this course is Financial Institutions Management, 2nd Edition by Helen Lange, Anthony Saunders et al.and published by Mc Graw-Hill (2007). It is available at the University Bookshop. Please note this is a new textbook – an Australian version of the American text. The institutional aspects of the book are quite different. • Resources available on WebCT Vista (access through myunsw portal) may include: o o o Lecture notes and additional reference articles Important notices, a message board and other forms of communication Exam and assessment results

7. COURSE EVALUATION AND DEVELOPMENT
Each year feedback is sought from students and other stakeholders about the courses offered in the School and continual improvements are made based on this feedback. UNSW's Course and Teaching Evaluation and Improvement (CATEI) Process (http://www.ltu.unsw.edu.au/ref4-5-1_catei_process.cfm) is one of the ways in which student evaluative feedback is gathered. Significant changes to courses and programs within the School are communicated to subsequent cohorts of students.

8. STUDENT RESPONSIBILITIES AND CONDUCT
Students are expected to be familiar with and adhere to university policies in relation to class attendance and general conduct and behaviour, including maintaining a safe, respectful environment; and to understand their obligations in relation to workload, assessment and keeping informed. Information and policies on these topics can be found in the ‘A-Z Student Guide’: https://my.unsw.edu.au/student/atoz/ABC.html. See, especially, information on ‘Attendance and Absence’, ‘Academic Misconduct’, ‘Assessment Information’, ‘Examinations’, ‘Special Consideration’, ‘Student Responsibilities’, ‘Workload’ and policies such as ‘Occupational Health and Safety’.

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8.1 Workload It is expected that you will spend at least ten hours per week studying this course. This time should be made up of reading, research, working on exercises and problems, and attending classes. In periods where you need to complete assignments or prepare for examinations, the workload may be greater. Over-commitment has been a cause of failure for many students. You should take the required workload into account when planning how to balance study with employment and other activities.

8.2 Attendance Your regular and punctual attendance at lectures and seminars is expected in this course. University regulations indicate that if students attend less than eighty per cent of scheduled classes they may be refused final assessment.

8.3 Special Consideration and Supplementary Examinations You must submit all assignments and attend all examinations scheduled for your course. You should seek assistance early if you suffer illness or misadventure which affects your course progress. For advice on UNSW policies and procedures for granting special consideration and supplementary exams, see: ‘UNSW Policy and Process for Special Consideration’: https://my.unsw.edu.au/student/atoz/SpecialConsideration.html

8.4 General Conduct and Behaviour You are expected to conduct yourself with consideration and respect for the needs of your fellow students and teaching staff. Conduct which unduly disrupts or interferes with a class, such as ringing or talking on mobile phones, is not acceptable and students may be asked to leave the class. More information on student conduct is available at: www.my.unsw.edu.au

8.5 Occupational Health and Safety UNSW Policy requires each person to work safely and responsibly, in order to avoid personal injury and to protect the safety of others. For more information, see https://my.unsw.edu.au/student/atoz/OccupationalHealth.html.

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8.6 Keeping Informed You should take note of all announcements made in lectures, tutorials or on the course web site. From time to time, the University will send important announcements to your university e-mail address without providing you with a paper copy. You will be deemed to have received this information. It is also your responsibility to keep the University informed of all changes to your contact details.

9. ADDITIONAL STUDENT RESOURCES AND SUPPORT
The University and the ASB provide a wide range of support services for students, including: • ASB Education Development Unit (EDU) (www.business.unsw.edu.au/edu) Academic writing, study skills and maths support specifically for ASB students. Services include workshops, online and printed resources, and individual consultations. EDU Office: Room GO7, Ground Floor, ASB Building (opposite Student Centre); Ph: 9385 5584; Email: edu@unsw.edu.au • UNSW Learning Centre (www.lc.unsw.edu.au ) Academic skills support services, including workshops and resources, for all UNSW students. See website for details. • Library training and search support services: http://info.library.unsw.edu.au • UNSW IT Service Desk: Technical support for problems logging in to websites, downloading documents etc. Library, Level 2; Ph: 9385 1333. Website: www.its.unsw.edu.au/support/support_home.html • UNSW Counselling Service (http://www.counselling.unsw.edu.au) Free, confidential service for problems of a personal or academic nature; and workshops on study issues such as ‘Coping With Stress’ and ‘Procrastination’. Office: Level 2, Quadrangle East Wing ; Ph: 9385 5418 • Student Equity & Disabilities Unit (http://www.studentequity.unsw.edu.au) Advice regarding equity and diversity issues, and support for students who have a disability or disadvantage that interferes with their learning. Office: Ground Floor, John Goodsell Building; Ph: 9385 4734

10. COURSE SCHEDULE
Week 1 2 3 4 5 6 Lecturer Vic Edwards Vic Edwards Vic Edwards Vic Edwards Vic Edwards Vic &Jianfeng Date 22/7 29/7 5/8 12/8 19/8 26/8 Lecture Content/Topic Introduction & Financial Service Industry Specialness of FIs & Financial Intermediation Risk Interest Rate Risk – Maturity & Duration Models IRR – Re-pricing Model + Part Credit Risk1 Credit Risk 1 cont & Credit Risk 2 Mid-session Exam Readings Chapters 1 & 2 Chapters 3 & 4 Chapters 5 & 6 Chapter 7 & 8 Chapters 8 & 9 No Lecture

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7 8 9 10 11 12

Jianfeng Shen Jianfeng Shen Jianfeng Shen Jianfeng Shen Jianfeng Shen Vic Edwards

2/9 16/09 23/09 30/09 14/10 21/10

Sovereign Risk & OBSA Market Risk + Technology & Operational Risk For Exchange & Liquidity Risk Liability & Liquidity Management + Capital Adequacy Futures, Forwards, Options Securitisation and the Global Financial Crisis

Chapters 10 & 11, Chapters 12&13 Chapter 14, 15 & 16 Chapter 16 & 17 Chapter 18 & 19 Chapter 21

Your lecturers for this session hope that you find the course informative, interesting and useful to your future careers. We also wish you the best in your assessment tasks. Vic Edwards and Jianfeng Shen

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