FACULTY OF BUSINESS, ENVIRONMENT AND SOCIETY

Faculty of Business, Environment and SocietyM22EFAInternational Banking2015/16(September 2015/16 Cohort 1st Semester 2015/2016 Delivery)TEACHING PLAN1. The course comprises ten lectures and seminars, as well as one revision session. Eachlecture is two hours long and takes place on Wednesday afternoons from 13.00-15.00.Seminars take place the next day.2. The material to be covered in each session is summarized as follows:Date Topic Key Readings (available on Moodle)30th Sept. Introduction / FinancialintermediationHaldane, A. (2012) ‘ A leaf being turned, speech givenon socially useful banking, 29th October 2012Akerlof, G.A. (1970) ‘The Market for ‘Lemons:Quality Uncertainty and the Market Mechanism,Quarterly Journal of Economics, 84(3), 488-500.7th Oct. Bank risk management Laeven, L. and Valencia, F. (2012) ‘Systemic BankingCrises Database: An Update, International MonetaryFund Working Paper, wp01/12/163.14th Oct. Theory of the bankingfirmAnginer, D, Demirguc-Kunt, A. and Zhu, M. (2014)‘How does competition affect bank systemic risk?Journal of Financial Intermediation, 23, 1-26.Sealey, C.W. & Lindley, J.T. (1977) ‘Inputs, outputsand a theory of production and cost at depositoryfinancial institutions, Journal of Finance, 32, 1251-66.21st Oct. Competition & stabilityin bankingFiordelisi, F., Marques-Ibanez, D. and Molyneux, P.(2011) ‘Efficiency and risk in European banking,Journal of Banking and Finance, 35(5), 1315-1326.28th Oct. Efficiency measurementin bankingBerger, A.N. and Humphrey, D.B. (1997) ‘Efficiency offinancial institutions: an international survey anddirections for future research, European Journal ofOperational Research, 98, 175-211Fethi, M.D. and Pasiouras, F. (2010) ‘Assessing bankefficiency and performance with operational researchand artificial intelligence techniques. European Journalof Operational Research, 204, 189-19824th Nov. International banking Robert Z. Aliber (1984), “International Banking: ASurvey”, Journal of Money, Credit and Banking,Vol.16, No,4, pp.661-67811th Nov Banking and FinancialProductsDennis Haensel and Jan Pieter Krahnen (2007), “DoesCredit Securitization Reduce Banking Risk? Evidencefrom the European CDO Market”18th Nov. Credit PortfolioManagementArnoud W.A Boot (2000), “Relationship Banking: WhatDo We Know?”, Journal of Financial Intermediation,pp, 7-25René M. Stulz (2009) Credit Default Swaps and theCredit Crisis”, NBER Working Paper No. 1538425th Nov. The Banking crisis Eichengreen, B (2009), “How the Subprime Crisis WentGlobal: Evidence From Bank Credit Default SwapSpreads”, NBER, Working Paper 14904Michael D. B (2008), “An Historical Perspective on TheCrisis Of 2007-2008”, NBER Working Paper 145692nd Dec. Global Bankingregulation / The BaselAccordsAsli Demirgüç-Kunt and Enrica Detragiache (2009),“Basel Core Principles and Bank Soundness: DoesCompliance Matter?”, The World Bank DevelopmentResearch Group Finance and Private SectorDevelopment Team9th Dec. Revision3. The references provided as key readings given are essential. For students who havenot studied banking before it will also be necessary to undertake background readingfrom one of the recommended textbooks in the course outline. Specific chapterreferences may be given during the lecture sessions.Additional references may be provided during the lectures and these should also beconsidered essential reading for the course.There will be opportunities at lectures and seminar sessions for discussion of the keyreadings. So it is important that students make every attempt to keep up to date withthese primary references.4. In addition there are a number of websites that should be monitored on a regular basis.Given the rapidly changing nature of global banking systems and banking regulationit is important that students are aware of recent developments and can refer to them ifnecessary, in the examination or in their course work. Important websites that shouldbe monitored include:3Bank of England www.bankofengland.co.ukParticularly useful for workingpapers and Financial StabilityReportsBank forInternationalSettlementswww.bis.org Useful for updates on Basel IIIand working papersEuropean CentralBankwww.ecb.int Good working paper seriesEuropeanBankingAuthoritywww.eba.europa.eu Recently established to overseeEuropean financial regulationOffice of theComptroller ofthe Currency: USDepartment ofthe Treasuryhttp://www.occ.gov/topics/capitalmarkets/financialmarkets/trading/derivatives/derivatives-quarterly-report.htmlProvides Quarterly Report onBank Derivatives Activities oftop 25 Banks in the USFinancialConductAuthoritywww.fca.org.uk Useful for consultation anddiscussion papersBoard ofGovernors of theFederal Reservewww.federalreserve.gov Vast amount of US banking andeconomic related informationFederal ReserveBank of NewYorkwww.newyorkfed.org A lot of useful US bankingmaterialFinancialStability Boardwww.financialstabilityboard.org Monitors progress in globalfinancial regulation someinteresting issues papersInternationalJournal ofCentral Bankingwww.ijcb.org/ Quarterly Journal of BankingissuesNorthcoteInternet Limitedhttp://www.northcote.co.uk/company_links/alpha.asp?SIT=1&ALR=BProvides links to Annual andInterim reports, dividends andcompany information on UKlisted companies.Yahoo Finance https://uk.finance.yahoo.com/q?s=%5EFTSEProvides information and linksto historical prices of UK listedfirms45. Coursework AssignmentFor the coursework element of the assessment you are required to write around 2,000words in answer to ONE of the following:1) Discuss (i) the impact of increasing competition in commercial banking onsystemic risk and (ii) consider the possible implications of this for policy makers.2) Discuss (i) the use of financial derivatives by banks to manage their asset andliability positions and (ii) investigate the extent to which credit derivatives vis-à-vis other types of financial derivatives are used by banks to reduce the risk ofexposure to changes in market prices or rates that may affect their profits andshareholders wealth.The coursework must be handed in on Friday, 4th December, 2015.The recommended textbooks and additional reading provide background materials forthese topics. However, students are also encouraged to undertake a literature search tofind further papers on the chosen subject. The websites mentioned earlier, all containinformation on themes relating to these topics.Learning OutcomesThis coursework assesses the following learning outcomes. Students should showevidence that they have:1) Provided an in-depth analysis of the concept identified in the first part of thequestion;2) Provided an in-depth critical discussion of the policy issues in relation to the secondpart of the question;3) Critically reviewed the literature using as a basis the references provided in theMoodle;4) Shown initiative in identifying and analyzing other important references relating tothe chosen subject.

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