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Financial Institution Management (FIN30080)
UNIVERSITY COLLEGE DUBLIN, UCD SCHOOL OF BUSINESS
SUBJECT AREA: BANKING AND FINANCE
LECTURE DETAILS: Semester 2 (2 hours per week)
Monday 13:00 – 14:50 QUI 005
LECTURER: Dr. Vassilios Papavassiliou
Banking and Finance
UCD School of Business
Belfield, Dublin 4, Ireland
CONTACT DETAILS: Office Q259, Email: vassilios.papavassiliou@ucd.ie
OFFICE HOURS: Tuesday 12:00 – 14:00
AIMS AND OBJECTIVES:
This module is about global banking and the wide variety of activities undertaken by
banks. These institutions lie at the heart of any financial system, providing a safe place
for people to save and to transfer money to others, and supplying multinational firms with
an astonishing array of services. The focus on making banks safer is more important than
ever today. The US subprime mortgage crisis of 2007 as well as the recent European
sovereign debt crisis, have resulted in an unprecedented turmoil in the global financial
system and have raised profound concerns about the stability of the business models used
by banks within the system. The module covers essential principles of banking, namely
asset and liability management, corporate and investment banking, international banking,
international financial markets, financial crises, monetary policy, central banking and
regulation.
LEARNING OUTCOMES:
At the end of this course students should:
1. Explain the role of banks in today’s complex global economic environment
2. Discuss liquidity and capital adequacy management policies

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3. Explain efficient approaches to managing the bank’s assets
4. Understand the dynamics of financial crises and their effects on economic activity
5. Recognize the functions of the Central Bank and its role as a Lender of Last Resort
6. Discuss why bank regulation is important and identify the dangers that arise in a
regulated system
SYLLABUS:
1. Overview of different aspects of banking
2. Corporate and Investment Banking
3. How a bank operates
4. Asset & liability management
5. Bank financial statements
6. International banking
7. Debt markets
8. Financial crises and the subprime meltdown
9. The Eurozone financial crisis
10. Monetary policy
11. Central banking
12. Regulation
MAIN REFERENCE:
The main textbook recommended for the course is:
Arnold, G. (2014), FT Guide to Banking, Pearson Education Ltd
You will be expected to have a copy of the recommended textbook. To facilitate learning,
the module will use the recommended text as the “route-map” for the module. However,
additional recommended readings will support your learning and will be used as the sole
reading material in certain classes.
ADDITIONAL REFERENCES:
Berger, A.N., Molyneux, P., Wilson, J.O.S. (2012), The Oxford Handbook of Banking,
Reprint Edition, Oxford University Press
Choudhry, M. (2012), The Principles of Banking, 1st Edition, John Wiley & Sons
Mishkin, F.S., Matthews, K., Giuliodori, M. (2013), The Economics of Money, Banking &
Financial Markets, European Edition, Pearson Education Ltd

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ADDITIONAL READINGS:
Various relevant material, including lecture notes, will be posted on Blackboard as we
progress through the semester. Lecture notes are only an outline, more detail is covered
in class and the recommended textbooks have further details and deep analysis of all
topics.
COURSE HIGHLIGHTS:
Guest lectures will run during the semester, featuring high-profile speakers from the
financial services industry and key regulatory bodies. Students will have the unique
opportunity to network with industry experts and get insights from the latest trends in
banking and finance.
ASSESSMENT REQUIREMENTS:
Closed book exam (60%)
Case study report (40%)
The group assignment will be to research a banking institution and make a set of
recommendations. The due date of the assignment will be posted on Blackboard.
COURSE OUTLINE:
Lecture 1: Overview of different aspects of banking (Arnold, Chapters 1-4)
i. The impact of banking on our lives
ii. Retail banking
iii. Reducing risk for the bank
iv. Payment mechanisms
Lecture 2: Corporate and Investment Banking (Arnold, Chapters 5,6,10,11)
i. Corporate lending
ii. The interbank market
iii. Investment banking services to companies and governments
iv. Market trading activities
Lecture 3: How a bank operates (Arnold, Chapter 7; Mishkin et al, Chapter 10)
i. Liquidity risk
ii. Liquidity management and reserves
iii. Capital adequacy management
Lecture 4: Asset & liability management (Arnold, Chapter 8; Mishkin et al, Chapter
10)

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i. Loan policy and credit rationing
ii. Interest rate risk
iii. Off-balance-sheet management
iv. Value at Risk (VaR) calculation
Lecture 5: Bank financial statements (Arnold, Chapter 9; Mishkin et al, Chapter 10;
Choudhry, Chapter 1)
i. Balance sheet
ii. Income statements
iii. Repurchase agreements (repos)
iv. Bank metrics
Lecture 6: International banking (Arnold, Chapters 14-19; Berger et al, Chapters 31-
36)
i. The gold standard and Eurocurrency markets
ii. UK banking
iii. European banking
iv. Banking in the Americas
v. Banking in Asia and Australasia
vi. Banking in the Middle East and Africa
Lecture 7: Debt markets (Arnold, Chapter 20; Mishkin et al, Chapter 2; Choudhry,
Chapter 5)
i. T-Bills, Government bonds, and corporate bonds
ii. Prices, returns, and yields
iii. Credit ratings and bond default rates
iv. High-yield bonds, convertible bonds, and Eurobonds
Lecture 8: Financial crises and the subprime meltdown (Mishkin et al, Chapter 9;
Berger et al, Chapter 26)
i. Factors causing financial crises
ii. Dynamics of past financial crises in developed countries
iii. Dynamics of past financial crises in emerging market economies
iv. The US subprime mortgage crisis
Lecture 9: The Eurozone financial crisis (Mishkin et al, Chapter 9)
i. The seeds of the crisis
ii. The triggers
iii. Sovereign debt tensions and their spillovers into banks
iv. Broader implications for Europe and the world economy
Lecture 10: Monetary policy (Arnold, Chapter 24; Mishkin et al, Chapters 14-16)
i. Open market operations
ii. Discount rate changes
iii. How monetary policy affects the economy
iv. The independence of central banks
v. Quantitative easing

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Lecture 11: Central banking (Arnold, Chapter 25; Mishkin et al, Chapter 13; Berger et
al, Chapter 9)
i. Safety and soundness of the financial system
ii. Lender of last resort
iii. Bank supervision
iv. Capital and liquidity adequacy
v. Basel I, II, III
Lecture 12: Regulation (Arnold, Chapter 26; Mishkin et al, Chapter 11)
i. Conflicts of interest and fraud
ii. Contagion risk
iii. Moral hazard and agency capture
iv. Money laundering
v. European Union regulation
vi. Shadow banking
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Financial Times subscription:
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