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2016/2017  BA-BHAAV6025U  Principles of Banking and Financial Intermediation

English Title
Principles of Banking and Financial Intermediation

Course information
Language English
Course ECTS 7.5 ECTS
Type Elective
Level Bachelor
Duration One Quarter
Start time of the course Third Quarter
Timetable Course schedule will be posted at calendar.cbs.dk
Max. participants 60
Study board
Study Board for BSc in Economics and Business Administration
Course coordinator
  • Bjarne Florentsen - Department of Finance (FI)
Main academic disciplines
  • Finance
Last updated on 28-09-2016
Learning objectives
To achieve the grade 12, students should meet the following learning objectives with no or only minor mistakes or errors: To achieve the grade 12, students should meet the following learning objectives with no or only minor mistakes or errors: At the end of the course, the students must be able to
  • Analyze the role of commercial banks, investment banks and other financial intermediaries in the economy
  • Identify and discuss the accounting of banking operations, such as loans, loan commitments, deposits and other sources of funding
  • Discuss the reasons for bank regulation and the roles of central banks as supervisors and monetary authorities
  • Identify, analyze and measure the risks of banks
  • Define value creation in banks and the measures used to analyze bank safety and performance
Course prerequisites
The course builds on concepts from Corporate Finance and Accounting. Students are expected to have a good background on basic financial concepts such as time value of money, risk-return portfolio optimization, CAPM, capital structure theory and applications, payout policy and manager-shareholder agency conflicts. Basic knowledge of accounting, such as interpretation of financial statements, and basic statistical tools (descriptive statistics, simple and multiple regression analysis) are also desired, but not mandatory, backgrounds.
Examination
Principles of Banking and Financial Intermediation:
Exam ECTS 7,5
Examination form Written sit-in exam
Individual or group exam Individual exam
Assignment type Written assignment
Duration 4 hours
Grading scale 7-step scale
Examiner(s) One internal examiner
Exam period Spring
Aids allowed to bring to the exam Limited aids, see the list below:
  • Written sit-in-exam on CBS' computers
  • Written sit-in-exam with pen and paper
  • Access to personal drive (S-drive) on CBS' network
  • USB key to upload your notes before the exam
  • Any calculators
Make-up exam/re-exam
Same examination form as the ordinary exam
If the number of registered candidates for the make-up examination/re-take examination warrants that it may most appropriately be held as an oral examination, the programme office will inform the students that the make-up examination/re-take examination will be held as an oral examination instead.
The re-exame takes form of a 20 minutes oral exam if the teacher and the study secretariat decides that this is the most appropriate.
Description of the exam procedure

Additionally, the students have the option to write in hand the exam answers and/or on CBS-PC. That is the students can hand in the exam answers written in hand, on CBS-PC or some part of the exam answers can be written in hand and some part of the exam can be written on CBS-PC.
Course content and structure

This course studies the role of banks and other financial intermediaries in the economy, as well as their management and regulation. It starts by examining how banks create social value, discusses the basics of bank accounting and the role of Central Banks, and how supervision affects bank activities. It continues by focusing on managerial decisions by bank managers focusing on the understanding of several sources of risks, such as credit, market and liquidity risks. It finally covers performance measurement and management in banks.

  

Finally, some students will be writing their bachelor projects in this course. They will be allowed to work in groups, and are expected to do either empirical research or a case study in a related subject.  
Teaching methods
The course will consist of usual lectures, exercises, and case analyses and discussions. The exercises will integrate Excel as a very useful tool in practical applications. The cases will also illustrate the practical applications of the theory focusing on the banking sector. The success of the course hinges on active participation by the students, by asking questions during the lectures, and especially in these case analyses and discussions.
Student workload
Lecture 36 hours
Exam attendance 4 hours
Preparation 166 hours
Expected literature

Saunders, Anthony, Cornett, Marcia M., Financial Institutions Management: a Risk Management Approach, 8th Ed., 2014, McGraw Hill

Dermine, Jean, Bank Valuation and Value Based Management: Deposit and Loan Pricing, Performance Evaluation, and Risk, 2nd Ed., 2014, McGraw Hill
Last updated on 28-09-2016