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2018/2019  BA-BHAAI1073U  Banking and Financial Institutions

English Title
Banking and Financial Institutions

Course information

Language English
Course ECTS 7.5 ECTS
Type Elective
Level Bachelor
Duration Summer
Start time of the course Summer
Timetable Course schedule will be posted at calendar.cbs.dk
Max. participants 120
Study board
Study Board for BSc in Economics and Business Administration
Course coordinator
  • Course instructor - Gregory Perelman, Lecturer, Graduate School of Management, University of California, Davis, gperelman@ucdavis.edu
    Sven Bislev - Department of Management, Society and Communication (MSC)
In case of any academic questions related to the course, please contact the course instructor or ISUP academic director, Sven Bislev at sb.msc@cbs.dk.
Main academic disciplines
  • Finance
  • Accounting
Teaching methods
  • Face-to-face teaching
Last updated on 05/12/2018

Relevant links

Learning objectives
To achieve the grade 12, students should meet the following learning objectives with no or only minor mistakes or errors:
  • Understand how central banks conduct monetary policy - setting of fed funds rates in the U.S. by the Federal Reserve System
  • Calculate key financial ratios based on bank financial statements
  • Determine interest rate on a traditional bank loan
  • Estimate value of newly formed companies in financial services industry
  • Explain functions of money management and investment banking industries
Course prerequisites
Introductory accounting course required
Introductory finance management course is strongly recommended
Examination
Banking and Financial Institutions:
Exam ECTS 7.5
Examination form Written sit-in exam on CBS' computers
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 Summer, Ordinary exam: 4 hour written exam in the period of 30 July - 2 August 2019
Retake exam: 4 hour written exams in the period of 1-7 October 2019
3rd attempt (2nd retake) exam: 72-hour home assignment- 25-28 November 2019 – for all ISUP courses simultaneously

Exam schedules available on https:/​/​www.cbs.dk/​uddannelse/​international-summer-university-programme-isup/​courses-and-exams
Aids Open book: all written and electronic aids, including internet access
Read more here about which exam aids the students are allowed to bring and will be given access to : Exam aids and IT application package
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.
Retake exam: 4 hour written sit-in exam, new exam question
Exam form for 3rd attempt (2nd retake): 72-hour home project assignment, max. 10 pages.
Course content and structure

This course will analyze the main functions of banks and other financial institutions and review recent developments in the financial services industry.  We will examine the functions performed by incumbent players in the following segments: extension of credit to businesses and consumers, payment processing, money management, investment banking and securities trading; attention will then turn to new industry players - those companies that are using digital technologies and big data to disrupt traditional players’ business models. Potential market size, product pricing and profitability of the new players will be evaluated. 

It is assumed that students have good working knowledge of the basic theoretical and practical concepts of economics, accounting, and finance. The course is intended not only for those interested in careers within financial institutions, but also for those who wish to extend their institutional and industry specific knowledge.

 

Preliminary assignment: Submit Entry Quiz - checking on basic accounting and finance knowledge; answer key and solutions will be provided;

Class 1: Financial institutions and their functions

Class 2: History of the U.S. banking industry; Case:  The U.S. Banking Panic of 1933 and Federal Deposit Insurance

Class 3: Central Banking - Federal Reserve System; Monetary Policy and Its Tools;

Class 4: Measuring financial performance of financial intermediaries; Bank capital requirements;

Class 5: Traditional lending and product pricing; Case: Santa Fe Trading Company;

Class 6: Innovations in lending and alternative finance; Case: Lending Club;

Feedback activity: Sample midterm exam with answer key and solutions provided; midterm will be in the same format as the final examination;

Class 7: Payment function: from the bill of exchange to Visa/MasterCard to Bitcoin

Class 8: Investment and money management; Case:  Betting on Failure: Profiting from Defaults on Subprime Mortgages 

Class 9: Review of insurance industry;

Class 10: Review of investment banking industry; Case: The Tip of the Iceberg: JP Morgan Chase and Bear Stearns 

Class 11: Regulation of financial industry in the post-crisis period

Description of the teaching methods
Lectures, case discussion, in-class exercise solutions;
Feedback during the teaching period
Midterm, similar in format to the final exam, will be offered; answer key and solutions provided;
Student workload
Preliminary assignment 20 hours
Classroom attendance 33 hours
Preparation 126 hours
Feedback activity 7 hours
Examination 20 hours
Further Information

Preliminary Assignment: To help students get maximum value from ISUP courses, instructors provide a reading or a small number of readings or video clips to be read or viewed before the start of classes with a related task scheduled for class 1 in order to 'jump-start' the learning process.

 

Course timetable is available on https://www.cbs.dk/uddannelse/international-summer-university-programme-isup/courses-and-exams

 

We reserve the right to cancel the course if we do not get enough applications. This will be communicated on https://www.cbs.dk/uddannelse/international-summer-university-programme-isup/courses-and-exams end February 2019 at the latest.

 

Expected literature

Mandatory readings:

 

Purchase at HBS Publishing at this link: 
https:/​/​hbsp.harvard.edu/​import/​582543

 

Additional relevant readings:

 

The following articles are available at the Bank of England web site:

• Money in the modern economy: an introduction. By Michael 
McLeay, Amar Radian and Ryland Thomas. Bank of England Quarterly Bulletin, 2014 Q1
• Money creation in the modern economy. By Michael McLeay, Amar Radia and Ryland Thomas. Bank of England Quarterly Bulletin, 2014 Q1
• Innovations in payment technologies and the emergence of digital currencies. By Robleh Ali, John Barrdear, Roger Clews and James Southgate Bank of England Quarterly Bulletin, 2014 Q3
• The economics of digital currencies. By Robleh Ali, John Barrdear, Roger Clews and James Southgate. Bank of England Quarterly Bulletin, 2014 Q3
• Insurance and financial stability. By Andrea French and Mathieu Vital, Bank of England Quarterly Bulletin, 2015 Q3
• Investment banking: linkages to the real economy and the financial system. By Kushal Balluck, Bank of England Quarterly Bulletin, 2015 Q1
• Stress testing of banks: an introduction.  By Kleran Dent and Ben Westwood.  Bank of England Quarterly Bulletin, 2016 Q3
• Bank capital and liquidity.  By Marc Farag and Damian Harland. Bank of England Quarterly Bulletin, 2013 Q3


 

Last updated on 05/12/2018