BUSN2021 Management of Financial Institutions

Financial institutions comprise banks, building societies, credit unions, trust, insurance and mortgage loan companies. This topic will explain how the managers of these institutions, particularly commercial banks, make decisions about the asset and liability structures of their balance sheets, including decisions on loans, securities, capital, deposits and other funding sources. It will explore the performance of financial institutions and explain how interest rates impact on profitability and risk. The topic also briefly considers other risks faced by financial institutions and risk mitigation techniques. The international regulatory environment is also described.

This topic aims to:

• Explain how the managers of commercial banks and other financial institutions make decisions about the asset and liability structures of their balance sheets, including decisions on loans, securities, capital, deposits and other funding sources
• Assess the performance of financial institutions and explain how interest rates impact on profitability and risk

1. Describe the functions performed by banks and other financial institutions
2. Briefly explain the risks faced by financial institutions and the methods they use to mitigate these risks
3. Interpret the financial statements of financial institutions
4. Calculate key performance indicators
5. Analyse the performance of financial institutions
6. Explain the key role of capital
7. Compare and contrast strategies to manage funding and liquidity
8. Compare and contrast strategies to manage the securities portfolio
9. Describe several methods used to assess loan applications
10. Discuss regulations, the regulatory environment and resolution of bank failures