School: Business and Law

This unit information may be updated and amended immediately prior to semester. To ensure you have the correct outline, please check it again at the beginning of semester.

  • Unit Title

    Risk Management in Banking
  • Unit Code

    ECF6125
  • Year

    2018
  • Enrolment Period

    1
  • Version

    2
  • Credit Points

    20
  • Full Year Unit

    N
  • Mode of Delivery

    On Campus
    Online
  • Unit Coordinator

    Prof Robert POWELL

Description

Students will develop the skills to effectively manage the risk-return tradeoff inherent in a large financial institution, such as a bank. While there are a number of financial risks which need to be considered in managing a bank, students will focus on capital risk, interest rate risk, credit risk and liquidity risk. Students will also gain an appreciation of the impact that international and national prudential regulations have on this risk-return tradeoff; particularly in terms of the role of the Bank of International Settlements (BIS) and the Australian Prudential Regulation Authority (APRA). The second objective is for students to develop and apply independent research skills applicable to risk management in financial institutions. Thus, this unit incorporates the planning and execution of a substantial research based project relating to key risks of banks.

Learning Outcomes

On completion of this unit students should be able to:

  1. Analyse the detailed financial statements (including notes) for a bank.
  2. Apply those principles to the financial statements of financial institutions generally and, in particular, the major financial institutions operating in Australia.
  3. Assess the impact that the various risks have on the profitability and operations of a financial institution.
  4. Compare and contrast financial institutions in terms of their different approaches to managing the risk-return tradeoff.
  5. Evaluate the impact that the current prudential regulations have on the risk-return tradeoff for Australian and international financial institutions.
  6. Make recommendations about how to effectively manage the risks and improve the risk-return tradeoff.
  7. Plan and execute a substantial research based project.
  8. Synthesize the principles involved in the risk-return tradeoff for capital, liquidity, credit and interest rate risk.

Unit Content

  1. Capital risk.
  2. Credit Risk.
  3. Financial institutions and the process of financial intermediation.
  4. Interest rate risk.
  5. Liquidity risk.
  6. Planning, researching executing and writing up a research based project relating to bank risk.
  7. The role of prudential regulation in shaping the risk-return tradeoff, particularly as a result of the revised Basel regulations coming out of the Global Financial Crisis.
  8. The special nature of the financial statements and operation of financial institutions.

Additional Learning Experience Information

Students attend weekly seminars. Central to the learning process is the development of students' research skills. Students will be required to present and communicate a research plan relating to financial institutions management. The research plan will be followed by a two-part research paper, involving an analysis and comparison of the risks for two Australian banks.

Assessment

GS1 GRADING SCHEMA 1 Used for standard coursework units

Students please note: The marks and grades received by students on assessments may be subject to further moderation. All marks and grades are to be considered provisional until endorsed by the relevant Board of Examiners.

ON CAMPUS
TypeDescriptionValue
PresentationGroup Tutorial Presentation of Research Project Plan20%
ProjectResearch Project40%
Research PaperResearch Paper40%

Disability Standards for Education (Commonwealth 2005)

For the purposes of considering a request for Reasonable Adjustments under the Disability Standards for Education (Commonwealth 2005), inherent requirements for this subject are articulated in the Unit Description, Learning Outcomes and Assessment Requirements of this entry. The University is dedicated to provide support to those with special requirements. Further details on the support for students with disabilities or medical conditions can be found at the Access and Inclusion website.

Academic Misconduct

Edith Cowan University has firm rules governing academic misconduct and there are substantial penalties that can be applied to students who are found in breach of these rules. Academic misconduct includes, but is not limited to:

  • plagiarism;
  • unauthorised collaboration;
  • cheating in examinations;
  • theft of other students' work;

Additionally, any material submitted for assessment purposes must be work that has not been submitted previously, by any person, for any other unit at ECU or elsewhere.

The ECU rules and policies governing all academic activities, including misconduct, can be accessed through the ECU website.

ECF6125|2|1

School: Business and Law

This unit information may be updated and amended immediately prior to semester. To ensure you have the correct outline, please check it again at the beginning of semester.

  • Unit Title

    Risk Management in Banking
  • Unit Code

    ECF6125
  • Year

    2018
  • Enrolment Period

    2
  • Version

    3
  • Credit Points

    20
  • Full Year Unit

    N
  • Mode of Delivery

    On Campus
    Online
  • Unit Coordinator

    Dr Tonmoy CHOUDHURY

Description

Students will develop the skills to effectively manage the risk-return tradeoff inherent in a large financial institution, such as a bank. While there are a number of financial risks which need to be considered in managing a bank, students will focus on capital risk, interest rate risk, credit risk and liquidity risk. Students will also gain an appreciation of the impact that international and national prudential regulations have on this risk-return tradeoff; particularly in terms of the role of the Bank of International Settlements (BIS) and the Australian Prudential Regulation Authority (APRA). The second objective is for students to develop and apply independent research skills applicable to risk management in financial institutions. Thus, this unit incorporates the planning and execution of a substantial research based project relating to key risks of banks.

Learning Outcomes

On completion of this unit students should be able to:

  1. Explain what makes the financial statements and operations of financial institutions special.
  2. Understand the principles involved in the risk-return tradeoff for capital, liquidity, credit and interest rate risk.
  3. Evaluate the risk and the risk-return trade-off for capital, liquidity, credit and interest rates for financial institutions.
  4. Determine the impact that the current prudential regulations have on the risk-return trade off for Australian and international financial institutions.
  5. Work effectively in a team, including the ability to reflect on individual performance in a team, to plan a substantial risk-based research based project on how well financial institutions manage their risks and comply with prudential regulations.
  6. Effectively communicate your risk-based research project plan in an oral presentation.
  7. Execute your risk-based research based project and effectively communicate your findings in a written document.
  8. Plan and execute a research based project.

Unit Content

  1. Financial institutions and the process of financial intermediation.
  2. The special nature of the financial statements and operation of financial institutions.
  3. Planning, researching executing and writing up a research based project relating to bank risk.
  4. The role of prudential regulation in shaping the risk-return tradeoff, particularly as a result of the revised Basel regulations coming out of the Global Financial Crisis.
  5. Capital risk.
  6. Liquidity risk.
  7. Credit Risk.
  8. Interest rate risk.
  9. Securitisation

Learning Experience

Students will attend on campus classes as well as engage in learning activities through ECU Blackboard.

JoondalupMount LawleySouth West (Bunbury)
Semester 2Not Offered13 x 3 hour seminarNot Offered

For more information see the Semester Timetable

Additional Learning Experience Information

Students attend weekly three-hour seminars. Central to the learning process is the development of students' research skills. Students will be required to present and communicate a research plan relating to financial institutions management. The research plan will be followed by a two-part research paper, involving an analysis and comparison of the risks for two Australian banks.

Assessment

GS1 GRADING SCHEMA 1 Used for standard coursework units

Students please note: The marks and grades received by students on assessments may be subject to further moderation. All marks and grades are to be considered provisional until endorsed by the relevant Board of Examiners.

ON CAMPUS
TypeDescriptionValue
PresentationGroup Tutorial Presentation of Research Project Plan20%
ProjectResearch Project40%
Research PaperResearch Paper40%

Disability Standards for Education (Commonwealth 2005)

For the purposes of considering a request for Reasonable Adjustments under the Disability Standards for Education (Commonwealth 2005), inherent requirements for this subject are articulated in the Unit Description, Learning Outcomes and Assessment Requirements of this entry. The University is dedicated to provide support to those with special requirements. Further details on the support for students with disabilities or medical conditions can be found at the Access and Inclusion website.

Academic Misconduct

Edith Cowan University has firm rules governing academic misconduct and there are substantial penalties that can be applied to students who are found in breach of these rules. Academic misconduct includes, but is not limited to:

  • plagiarism;
  • unauthorised collaboration;
  • cheating in examinations;
  • theft of other students' work;

Additionally, any material submitted for assessment purposes must be work that has not been submitted previously, by any person, for any other unit at ECU or elsewhere.

The ECU rules and policies governing all academic activities, including misconduct, can be accessed through the ECU website.

ECF6125|3|2