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FINS5530, Week 1 - 03:01:00 AM FinS 5530 Financial...

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Click to edit Master subtitle style 5/26/11 03:01:00 AM FinS 5530 Financial institution management Ilya Serov Week 1: Overview of the Financial System
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5/26/11 03:01:01 AM Agenda Ø Administrative Details Ø Course Outline Ø Objectives Ø Structure and Assessment Ø Overview of the Financial System Ø Uniqueness of financial institutions Ø Types of financial institutions 22
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5/26/11 03:01:01 AM Contact Details Ø Ilya Serov Ø [email protected] / [email protected] Ø Urgent matters: on the day Ø All other enquiries: 24 hours Ø Consultation: Ø Before/after class; and Ø By appointment 33
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5/26/11 03:01:01 AM Course Objectives Ø The aims for this course are Ø Introduce different types of risks that affect financial institutions Ø Understand the major decision areas for bank management Ø In a global and Australian contexts, and with the backdrop of the 2007-09 financial crisis 44
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5/26/11 03:01:01 AM Course Outline 55 Week Lecturer Date Lecture Content/Topic Readings 1 Ilya Serov 28/02 Introduction and Overview of the International Financial System S&C, Chapters 1, 2, 4, 5 2 Ilya Serov 7/03 Australian Financial System and Introduction to Risk Assessment S&C, Chapters 1, 7 Moshirian (2004) 3 Ilya Serov 14/03 Credit Risk S&C, Chapters 11 & 12 4 Ilya Serov 21/03 Liquidity Risk + Sovereign Risk S&C, Chapters 15 & 17 5 Jianfeng Shen 28/03 Interest Rate Risk – Maturity & Duration Models S&C, Chapters 8 & 9 6 Jianfeng Shen 4/04 IRR – Re-pricing Model + Part Market Risk S&C, Chapter 7 & 12 7 Jianfeng Shen 11/04 Mid-session Exam No Lecture 8 Jianfeng Shen 18/04 Market Risk + Foreign Exchange Risk S&C, Chapters 10 & 14 9 Ilya Serov 2/05 Liability and Liquidity Management, Deposit Insurance S&C, Chapters 18 & 19 10 Ilya Serov 9/05 Capital Adequacy and Basel III S&C, Chapter 20 Basel III 11 Ilya Serov 16/05 Securitisation and the Shadow Banking System S&C, Chapter 13 & 26 FRBNY 12 Ilya Serov 23/05 Global Financial Crisis: Causes & Consequences / Course Review
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5/26/11 03:01:01 AM Assessment Ø Mid-session Exam (35%): Ø Week 7, multiple choice Ø Covers Weeks 1-4 Ø Final Exam (50%) Ø Covers Weeks 5-12 Ø Group presentation (15%) Ø Topics of current interest (research / awareness task) 66
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5/26/11 03:01:01 AM Why Are Financial Intermediaries Special? Ø Explain the special role of FIs in the financial system and the functions they provide Ø Explain why the various FIs receive special regulatory attention Ø Discuss what makes some FIs more special than others 77
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5/26/11 03:01:01 AM Without Financial Intermediaries Corporations (net borrowers) Households (net savers) Cash Equity & Debt 88
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5/26/11 03:01:01 AM FIs’ Specialness Ø Without FIs: Low level of fund flows Ø Information costs Ø Economies of scale reduce costs for FIs to screen and monitor borrowers Ø Less liquidity Ø Substantial price risk 99
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5/26/11 03:01:01 AM With FIs Cash Households Corporations Equity & Debt FI (Brokers) FI (Asset Transformers ) Deposits/Insuranc e Policies Cash 10
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5/26/11 03:01:01 AM Functions of FIs Ø Brokerage function Ø Acting as an agent for investors: Ø Reduce costs through economies of scale Ø Encourages higher rate of savings Ø
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