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Bank-Revision

Bank-Revision. Please make sure that you have full lecture notes and understood. There will be four questions, you have to answer two. To make a good out of exam, please supplement lecture notes with the book (Modern banking).

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Bank-Revision

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  1. Bank-Revision • Please make sure that you have full lecture notes and understood. • There will be four questions, you have to answer two. • To make a good out of exam, please supplement lecture notes with the book (Modern banking). • Where, I have given things out of that book, please do read carefully.

  2. Question • Why banks exists? • Does the banking industry structure is same across globe ? • Do the banks always performs well? • Had the globalisation changed the way banks operate ?

  3. Question • How to check which bank is doing the better job ? • Is the merger of banks beneficial to society ? • Bigger the size better for the society ? • How to measure degree of competition in banking ? • What are the managerial issues in banking ? • Risk management and prudential regulation

  4. Question • Why banks needs more regulations compare to NBFI’s ? • Are the banking regulations laws same in different countries ? • Can a bank fail, if yes, then why? • Is the bank failure new phenomenon or historical ?

  5. Question • Are there some qualitative and quantitative techniques developed to know beforehand a bank failure ? • Yes, you will be able to answer all these questions after passing with 60% plusinthis unit ?

  6. The Modern Banking Firm • A review of financial markets and reasons for banks existence • Modern banking in the context of traditional model • Types of banks and their operations • Moral Hazard and asymmetric information in banking • Modern activities in banking: • Off-balance sheet and securitisation

  7. Banking Structure Around the World • Main features of the banking systems in the following countries: • UK • USA • Germany

  8. Managing Risks in Banking • Introduction and recent bank failures • Types of risk a modern day bank faces: • Credit risk • Liquidity and funding risk • Settlement and payment risk • Interest rate risk • Market or price risk • Foreign exchange risk • Gearing or leverage risk

  9. Managing Risks in Banking • Approaches to the management of risks: • Gap analysis • Duration analysis • Duration gap analysis • Derivatives

  10. Banking Laws: Prudential Control in Banking • Introduction • Why banking regulation? • Types of risks envisaged in banking and its relations to banking regulation • Arguments for prudential control/regulation • Problems with external prudential regulations and a case for free banking • Prudential control and regulations in the UK • Prudential control and regulations inthe USA

  11. Bank Failure Case StudiesWhy Banks Fail? • Why banks fail and cost of failure • Case studies of the following bank failure • Barings • Franklin national bank (1974) • Banco Ambrosiano(1982) • Continental Illinois and Pen Square (1982) • Johnson Matthey Bankers (JMB) • Bank of Credit and Commerce International (BCCI) • For each case study we discussed • Background • Reasons of Downfall: story • Action taken by regulators and others

  12. Competitive Issues in Banking Outline • Competitive issues in banking • Productivity measurement • Efficiency measurement • Economies of scale and scope • SCP and relative efficiency models • Contestable banking markets

  13. Competitive Issues in Banking • Empirical tests of the following: • Productivity and efficiency of banking via TFP and DEA • Economies of scale and scope in banking • Structure-Conduct-Performance (SCP) and relative efficiency models in banking • Contestability in banking (RPS statistics)

  14. Any Question

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