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Banking & Finance

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Banking & Finance

The course is about banking and financial system, theory of financial intermediation, models of the banking firm, theory of the bank regulation. It is also a partial regulation of the Bangladesh financial system, bank performance and probability analysis and interest rate margins. Various types of loans, credits / lending policies, repayment schedule, the bullet-pill, continuum of multiple credit creation and float management. Different types of financial instruments. Export-Import financing, competition in banking, State supervision of banks and non-banks. The operations of monetary policy.

Business Finance I (FIN 301)

  1. It is the student’s responsibility to gather information about the assignments and covered topics during the lectures missed. Regular class attendance is mandatory. Points will be taken off for missing classes. Without 70% of attendance, sitting for final exam is NOT allowed. According to IUB system students must enter the classroom within the first 20 minutes to get the attendance submitted.
  2. The date and syllabus of quiz, midterm and final exam is already given here, however, announcements will be given ahead of time. There is NO provision for make-up quizzes.
  3. The reading materials for each class will be given prior to that class so that student may have a cursory look into the materials.
  4. Class participation is vital for better understanding of sociological issues. Students are invited to raise questions.
  5. Students should take tutorials with the instructor during the office hours. Prior appointment is required.
  6. Students must maintain the IUB code of conduct and ethical guidelines offered by the School of Business.
  7. Students must refrain from any type of cheating and/or plagiarism in a course. Any student acting otherwise will receive an “F” grade in the course. School of Business, IUB, maintains a zero tolerance policy regarding violation of academic integrity.
  1. Students are not allowed to keep bags, handouts, books, mobile phones, smart watches or any other smart electronic devices with them during any exam. Students are advised to keep everything in the front of the class room before the exam starts. Please note that, just carrying any smart electronic devises (even if the devise is turned off or put it in silent mode) during the exam will be considered as “cheating”. Moreover, during the exam, anything written on hand palms (or anywhere else) and carrying paper materials (whatever is written) will be considered as “cheating”. Any sorts of “cheating” will result in an “F” grade with no exception. During the exam, students are only allowed to carry pen, pencil, eraser, sharpener, ruler, highlighter and calculator in a clear plastic bag.
Type of Evaluation Nos. Weight
Class Attendance and Participation 100% 5
Quiz (Best two will be counted) 5 15
Project and Presentation 01 10
Midterm Exam 01 30
Final Exam 01 40
Total   100%

[Class attendance is mandatory; failure to do so may deduct the final marks]

The following chart will be followed for grading. This has customized form the guideline provided by the school of Business.

A A- B+ B B- C+ C C- D+ D F
90-100 85-89 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 0-44

* Numbers are inclusive

The course will be based mostly on the following books [some other books and journals may be referred time to time]:

  • Mishkin, Frederic S., and Eakins, Stanley G. “Financial Markets and Institutions” 6th Edition.

RECOMMENDED REFERENCE TEXT:

  • Ross, S. Peter & Hudgins, C. Sylvia “Bank Management & Financial Services” 7th Edition (2008) McGraw Hill
  • Khan, A.R. “Bank Management”
  • Ali S. A. & Howlader R. A “Banking Law and Practice” Revised Edition

 

Link to virtual learning system: http://103.254.86.4/sb/ (School of Business – Faculty name- Login as a guest- password is 1234).

Sessions Topic Learning  Outcomes Readings
Session -1 Introduction Explanation of Course Outline, Introduction to Banking and Finance Course Outline
Session -2 Overview of the Financial System Understanding functions of financial markets, structure of financial markets, Elaborating internalization of financial markets, Understanding function of financial intermediaries Mishkin, Chapter 2

Page 15-25

 

Handout available on virtual learning system

Session -3 Overview of the Financial System Overview of Asymmetric Information, types of financial intermediaries, Investment intermediaries, Ensuring the soundness of financial intermediaries Mishkin, Chapter 2

Page 25-32

 

Handout available on virtual learning system

Session -4 Why Do Financial Institutions Exists? Understanding basic structure throughout the world, Enhance knowledge on asymmetric information, The lemon problem, Mishkin, Chapter 7

Page 135-145

 

Handout available on virtual learning system

Session -5 Why Do Financial Institutions Exists? How moral hazard affects the choice between debt and equity contract, How moral hazard influences financial structure in debt markets, Mishkin, Chapter 7

Page 145-157

 

Handout available on virtual learning system

Session -6 Central Banks and the Creation of Money The Central Bank of Bangladesh, Instruments of Monetary Policy, The Money Multiplier, The Impact of Interest Rate on Money Supply Fabozzi, Chapter 5

Page 65-75

 

Handout available on virtual learning system

Session-7 Central Bank and the Federal Reserve System

 

Quiz 1

Should the Fed Be Independent?

 

 

 

Knowledge on Chapter 2, 7

Mishkin, Chapter 7

Page 208-211

 

Handout

 

available on virtual learning system
Session -8 Discussion on Current World Financial Market Scenarios Supported by the Theories from Chapter 7
Session -9 Banking and the Management of Financial Institution Understanding the balance sheet, basic banking, Liquidity management and the role of reserve, Capital adequacy management Mishkin, Chapter 17

Page 399-412

 

Handout available on virtual learning system

Session -10 Banking and the Management of Financial Institution

 

Quiz 2

Measuring bank performance

 

 

 

 

Knowledge on Chapter 7 and 9

Mishkin, Chapter 7

Page 145-157

 

Handout available on virtual learning system

Session -11 Loan Classification and Provisioning Importance of classification, Reasons for high ratio of non-performing loans, Categories of loans Ali, Chapter 21

Page 359-372

 

Handout available on virtual learning system

Session -12 Loan Classification and Provisioning Qualitative Judgments, Accounting of the interest of classified loans, Maintenance of provision Ali, Chapter 21

Page 359-372

 

Handout available on virtual learning system

Session -13 Midterm Exam Chapters 2, 7, 9, 17, 21
Session -14 What Do Interest Rate Mean and What is Their Role in Valuation? Measuring interest rate, Maturity and volatility of bond returns, Duration and interest rate risk Mishkin, Chapter 3

Page 36-61

 

Handout available on virtual learning system

Session -15  

 

Financial Regulation

Relevant problem solving from Chapter 3 Asymmetric information and financial regulation Mishkin, Chapter 18

Page 425-435

 

Handout available on virtual learning system
Session -16 Financial Regulation Basel requirements Project Description Handout available on virtual learning system
Session -17 Asset-Liability Management Techniques & Hedging Against Risk

 

Quiz 3

Asset liability management strategies, the maturity gap and the yield curve, interest sensitive gap

 

 

 

 

Chapter 3

Rose, Chapter 7

Page 209-230

 

Handout available on virtual learning system

Session -18 Risk Management in Financial Institutions Income Gap Analysis, Duration Gap Analysis

 

 

 

Relevant problem solving from text

Mishkin, Chapter 23

Page 425-435

 

Handout available on virtual learning system

Session -19 In class case solving and presentation
Session -20 Sources and Uses of Funds, Performance Evaluation and bank Failure Background of CAMEL ratings Khan, Chapter 4

Page 51-69

 

Handout available on virtual learning system

Session -21 Islamic Banking Historical Perspective, Deposit Accounts Ali, Chapter 7

Page 100-118

 

Handout available on virtual learning system

Session -22 Islamic Finance

 

 

 

 

 

Quiz 4

Modes of Financing, Modes of Trade Financing

 

 

 

 

 

Chapter 23 (Mishkin), 4 (Khan)

Ali, Chapter 7

Page 100-118

 

Handout available on virtual learning system

Session -23 Review Class Chapter 3, 18, 23 (Mishkin), 7 (Rose), 4 (Khan), 7 (Ali)
Session -24 Project Presentation

 

Session -25 Project Presentation
Session -26 Final Exam Chapter 3, 18, 23 (Mishkin), 7 (Rose), 4 (Khan), 7 (Ali)

Students who are willing to audit the course are welcome during the first two classes and are advised to contact the instructor after that.

Plagiarism- that is the presentation of another person’s thoughts or words as though they were the students’ own – must be strictly avoided. Cheating and plagiarism on exam and assignment are unacceptable.

Please see the green book for further information about academic regulation and policies, including withdrawal and grading, apples and penalties for pilgrims and academic misconduct.

Students with disabilities are required to inform the School of Business/ Department of Economics of any specific requirement for classes or examination as soon as possible.