Risk Management in Banking

Module Code BFIP0RB
Semester Spring
Prerequisite N/A
Level 11
Credit Value 20
Module Co-ordinator Dr Theo Diasakos 
Assessment 40% Class test, 60% examination

MODULE INTRODUCTION, AIMS AND OBJECTIVES

The aim of this module is to provide an extensive and critical understanding of risk management in the banking industry. The students will develop their skills and ability to synthesize complex issues, evaluate information, apply principles and techniques, and make professional judgment and informed decisions in relevant work situations. More specifically, they will learn how to

  •  Explore the sources of risk facing banks
  • Critically analyse the key risk management concepts in banking
  • Analyze and evaluate the methods that banks can adopt to identify, evaluate and control these risks, including asset-liability management, value at risk, and credit scoring and credit portfolio models.
  • Analyze the central credit risk function of a bank and its role within the risk management framework
  • Assess credit risk and apply credit risk practices
  • Assess and manage operational risks
  • Critically review the international and UK regulatory risk environment
  • Examine the impact of the recent global banking crisis and its consequences in the industry

LEARNING OUTCOMES AND SKILLS DEVELOPED

Critical knowledge and understanding of:

  • Modern techniques of financial risk management used by banks and financial institutions
  • How to identify, classify, measure, and manage different types of financial business risks in order to create economic value
  • The foundations of conventional economic theory on utility functions and risk aversion and the evolution of the models for measuring risk
  • The analysis of the nature of banks and financial institutions’ risk exposures, instruments and strategies to management those risks which include interest rate risk, market risk, credit risk, operational risk and liquidity risk
  • The role of the regulator in controlling such risks through mechanisms such as deposit insurance and capital requirements

RECOMMENDED READING LIST

The core text book for this module is:

J. Bessis (2015) Risk Management in Banking, John Wiley & Sons. (4th ed.) ISBN:978-1-118-66021-8

Chartered Banker (2014) Risk Management in Banking, BPP Learning Media (2014/15 ed.) ISBN:978-1-472-

70497-9

Additional readings:

J. Ryan-Collins et al. (2012) Where does money come from? A guide to the UK monetary and banking

System, New Economics Foundation ISNB:978-1-

90850-623-8

J. Huerta de Soto (2012) Money, Bank credit, and Economic Cycles, Ludwig von Mises Institute ISNB:978-1-

61016-254-8

 

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