FINANCIAL INSTITUTIONS RISK MANAGEMENT (4 SCU)

Learning Outcomes:

Students should be able to define and distinguish the various sources of commercial and retail debt financing available through Australian financial institutions; provide an overview of basic risk management procedures of banks; identify the financial statements of institutions with the indicators of an impending crisis; construct asset-liability portfolios for financial institutions, together with portfolios of financial derivative instruments that effectively minimize the potentially damaging effects of interest rate volatility on bank (and corporate) profitability; apply appropriate procedures for appraising the credit risks inherent in bank loans, and for the pricing of loan agreements; define sources of international finance, and analyze how the current banking system provides access to such funds; provide an overview of the regulatory constraints under which Australian banks, foreign banks, building societies, and credit unions operate; analyze, evaluate, and synthesize quantitative and qualitative information accessed to manage risk; and recognize and employ the processes and strategies which assist independent learning.

Topics:

It will cover an overview of financial markets; the role of financial institutions; liquidity management; the use of financial derivatives in the management of interest rate risks; financial institutions’ liability management; the management of securities portfolios; a credit analysis; the management of loan portfolios; the management of bank capital; an overview of financial institution regulations; and issues in international banking.

Prerequisite(s): None