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ACFI3190: Financial Institutions Risk Management
BINUS
OVERVIEW
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Course Description |
Effective firm wide risk management sustains financial institutions. This course provides an overview of financial markets and the role of financial institutions, liquidity management, the use of financial derivatives in the management of interest rate risk, financial institutions liability management, management of the securities portfolio, credit analysis, management of the loan portfolio, management of bank capital, an overview of financial institutions regulations and issues in international banking. International perspectives to risk management and building skill in problem solving and decision making will be developed.
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Contact Hours |
Integrated Learning Session
Face to Face On Campus Two (2) hour(s) per Week for Full Term
Students are expected to complete 4 hours of guided learning via online preparation, lectures, interactive workshops, tutorials, discussion groups or self directed learning and an additional 6 hours of independent study per week.
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Unit Weighting |
10 |
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Assumed Knowledge
& Pre-Requisites
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Any Assumed Knowledge or Pre-Requisites for this course have been previously satisfied by the successful completion of courses within the approved student study plan.
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Workload |
Students are required to spend on average 120-140 hours of effort (contact and non-contact) including assessments per 10 unit course. |
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Course Learning Outcomes |
On successful completion of this course, students will be able to:
1. Define and distinguish the various sources of commercial and retail debt financing available through Australian financial institutions;
2. Provide an overview of basic risk management procedures of banks;
3. Identify in the financial statements of institutions the indicators of impending crisis;
4. Construct asset-liability portfolios for financial institutions, together with portfolios of financial derivative instruments, that effectively minimise the potentially damaging effects of interest rate volatility on bank (and corporate) profitability;
5. Apply appropriate procedures for appraising the credit risks inherent in bank loans, and for the pricing of loan agreements;
6. Define sources of international finance, and analyse how the current banking system provides access to such funds;
7. Provide an overview of the regulatory constraints under which Australian banks, foreign banks, building societies and credit unions operate;
8. Analyse, evaluate and synthesise quantitative and qualitative information accessed to manage risk; and
9. Recognise and employ the processes and strategies which assist independent learning and learning as a part of a group/team.
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ASSESSMENT DETAILS
This course has 3 assessments. Each assessment is described in more detail in the sections below:
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Assessment Name |
Due Date |
Involvement |
Weighting |
Learning Outcomes |
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1 |
Mid Semester test
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Week 7 in class
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Individual |
20% |
1, 2, 3, 4, 5, 6, 7, 8, 9
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2 |
Written Group Assignment
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Week 11 Sunday 11:59 pm
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Group |
30% |
2, 3, 4, 5, 6, 7, 8, 9
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3 |
Final Examination |
Formal Examination Period |
Individual |
50% |
2, 3, 4, 5, 6, 7, 8, 9
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Assessment 1 – Mid-Semester Test
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Assessment Type |
In Term Test
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Purpose |
The test's objective is to assess students' progressive knowledge and skill and provide prompt feedback on their progress and analysis techniques
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Description |
Students interpret problem-based questions to demonstrate critical thinking, analytical and problem-solving skills in the context of methods of measuring and managing risks faced by financial intermediaries.
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Weighting |
20% |
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Length |
90 minutes
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Due Date |
Week 7 in class
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Submission Method |
In Class - Students are required to write on the hard copy of Mid-semester test taken at the week 7 lecture.
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Assessment Criteria |
The following criteria will be used to assess the test:
− Relevance to the question.
− Accuracy of information/argument.
− Demonstrated links to corresponding readings.
− Clarity of expression.
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Return Method |
In class
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Feedback Provided |
Returned Work - Feedback on the assessment will be provided via comments with returned work.
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Assessment 2 – Written Group Assignment
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Assessment Type |
Written Assignment
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Purpose |
This task provides opportunity for individual review and feedback. It allows students to collaborate in solving practice problems and present in front of a large audience |
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Description |
The case analysis facilitates students' understanding and application of key concepts, principles and theories in financial institutions' decision making Students are provided with a case study of a financial institution. In the context of this case study, they demonstrate advanced knowledge of a broad spectrum of financial products and competence in measuring risk exposures of financial institutions. Working as a group, they apply theoretical concepts and ideas to the selected case study and engage in critical thinking and problem-solving strategies to address the issues. Students submit the analysis report using their advanced written communication skills.
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Weighting |
30% |
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Length |
2000 words (maximum)
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Due Date |
Week 11 Sunday 11:59 pm
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Submission Method |
Online – via Turnitin
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Assessment Criteria |
The following criteria will be used:
− Relevance to the question.
− Accuracy of information/argument.
− Demonstrated links to corresponding readings.
− Clarity of expression.
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Return Method |
Online via course CANVAS site
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Feedback Provided |
Feedback on the assessment will be provided via comments with returned work.
Feedback will be provided online via course CANVAS site.
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Assessment 3 - Final Examination |
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Assessment Type |
Formal Examination |
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Purpose |
This is a summative assessment task. |
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Description |
The examination assesses students' capacity to consolidate and apply their professional knowledge of financial institutions management to contextual scenarios.
Students apply their knowledge of the theoretical and conceptual frameworks that inform
contemporary financial institutions’ management practices. They interpret, describe,
analyse and solve problems, using provided data to develop constructive responses and
resolutions to the given scenarios. Students engage in professional context problem
solving incorporating an understanding of ethical, professional, and regulatory
standards, and global perspectives. They communicate effectively in written and
numerical/graphical formats to demonstrate their level of comprehension, analysis, and
application.
This course has a RESTRICTED OPEN BOOK examination. A memory aid is permitted. The memory aid is a single double sided A4 sheet of handwritten or typed notes for use during the examination. Note: memory aids must be left on the examination table and cannot be removed from the examination venue. |
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Weighting |
50% |
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Length |
120 minutes |
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Due Date |
Formal Exam Period |
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Submission Method |
Formal Exam
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Assessment Criteria |
Four (4) criteria will be used:
− Relevance to the question.
− Accuracy of information/argument.
− Demonstrated links to corresponding readings.
− Clarity of expression.
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Return Method |
Not Returned |
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Feedback Provided |
No Feedback. Examination scripts will not be returned to students. Final examination scripts will be made available for review by students, upon request, in a controlled and monitored setting. Students are required to make requests, directly to the relevant course coordinator. Completed examination scripts are kept by the Newcastle Business School for a period of six (6) months only, from the relevant fully graded date. Requests made after the six (6) month period cannot be considered. |
SYLLABUS
Course Content
Topics in the course include but are not limited to the following:
Course Materials
SCHEDULE
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Week |
Topic |
Class Preparation |
Assessment |
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1 |
Financial Institutions Overview and Australian Regulators
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Reading: Lange et al., Chapters 1-3.
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2 |
Interest Rate Risk I & II
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Reading: Lange et al.,
Chapters 5-6.
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3 |
Market Risk
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Reading: Lange et al.,
Chapters 9.
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4 |
Credit Risk
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Reading: Lange et al.,
Chapters 10-11.
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5 |
Sovereign Risk and OBS Activities
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Reading: Lange et al.,
Chapters 12 and 16.
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6 |
FX and Liquidity Risks
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Reading: Lange et al.,
Chapters 13-14.
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7 |
Mid-semester test
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Assessment 1 due: Mid-semester test Week 7 in class |
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8 |
Liability and Liquidity Management
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Reading: Lange et al.,
Chapters 15.
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9 |
Operational Risks
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Reading: Lange et al.,
Chapters 17.
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10 |
Introduction to Fintech
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Reading: Materials provided
in CANVAS
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11 |
Introduction to Fintech (cont.)
Fintech risk
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Reading: Materials provided
in CANVAS Saunders et al.
Chapter 18
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Assessment 2 due: Written group assignment Sunday Week 11 by 11:59 pm SGT
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12 |
Capital Management & Adequacy and building strong institutions
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Reading: Lange et al.,
Chapters 18.
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13 |
Revision |
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