This unit examines the major risks and issues faced by the Australian banking institutions within the global financial context and the strategies used to manage such risks. It also explores the economics (effect) of regulation on bank risk and management. This unit follows from the body of knowledge acquired in BEO2000 Financial Institutions and Monitory Theory. Topics include an introduction to the structure of financial markets and Australian banking environment,  nature and determination of interest rates, derivatives market, bank performance, management of bank risks including market, credit, liquidity and interest rate risk, loan sales and securitisation, effects of regulation and banking systems. Students will be introduced to various concepts and theories regarding commercial banking  and will critique and apply in critical reports, individual and group-based workshop activities and tests.

Unit details

Location:
Study level:
Undergraduate
Credit points:
12
Unit code:
BEO2001

Prerequisites

BEO2000 - Financial Institutions and Monetary Theory

Learning Outcomes

On successful completion of this unit, students will be able to:
  1. Analyse the major types of risk faced by banks and sources of such risks;  
  2. Judge the impact of risk on bank balance sheets and the role of regulation;  
  3. Appraise qualitative and quantitative data to assess performance of Australian banking institutions within the global financial context;  
  4. Advocate portfolio strategies including non-market related and derivative contracts used by banks to manage various risks;  
  5. Produce a well-written analysis which interrogates commercial banking and finance issues and advocates and justifies strategies to manage risks; and  
  6. Work collaboratively in teams while exhibiting individual responsibility and accountability to critically reflect upon and manage risks that can be faced by Australian banking institutions.  

Assessment

Assessment type Description Grade
Test Online Quiz 15%
Test In-class Test 1 20%
Assignment Group Assignment: Part A and Part B 30%
Test In-class Test 2 35%

Required reading

Financial Institutions Management: A Risk Management Approach 4th Edition
Lange, H, Saunders, A and Cornett, MM 2015
McGraw Hill, Australia

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