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Bank as a financial intermediary ([1], pp. 3-21):
- Disintermediation in Anglo-Saxo banking systems,
- Different goals of lenders and borrowers,
- The role of banks in a society,
- Problems caused by asymmetric information,
- Benefits of financial intermediation to borrowers and society,
- Deposit- and non-deposit taking institutions
Adverse selection problems in banking and the methods to combat them ([1], pp. 9-15):
- Signaling and screening,
- Principal-agent problems,
- Relationship banking, Theories of financial intermediation:
- Delegated monitoring,
- Information gathering,
- Liquidity transformation,
- Commitment mechanism,
Traditional versus modern banking ([1], pp. 47-61):
- Banking restrictions ended throughout the 1980s,
- Differences between traditional and modern banking. Traditional versus modern banking -
continuation: - Retail and personal banking:
Commercial banks, savings banks, co-operative banks,
- building societies, credit unions, finance houses.
- Peer-to-peer lending organizations. 4. Bank financial management ([1], pp. 303-310)
- Off-balance-sheet business in banking
5. Derivative business in banking ([1], pp. 310-328) [3], pp. 299-311):
- How can credit derivatives be used in bank financial manage- ment?
5. Derivative business in banking ([1], pp. 310-328) [3], pp. 299-311):
- Swaps (currency swaps)
Basel Committee on Banking Supervision
Basel 1:
Capital adequacy (the Cooke ratio)Base 2: 3 pilars
- capital adequacy
- risk-asset ratio
- Tier 1 capital requirements
- 1996 amendments to 1988 Acord
- 4 categories of risky assets
Basel 3:
Higher minimum Tier 1 capital requirements
A capital conservation buffer
A countercyclical capital buffer
Minimum total capital ratio
High quality liquid assets HQLA
Systemically important banksCredit scoring:
FICO scores (example of application for FICO score)Discriminant method:
How to build an econometric model leading to Z-score (part 1)Discriminant method:
How to build an econometric model leading to Z-score based on data from real companies (part 2)Off-balance sheet business in banking:
(i) loan commitments (including overdrafts) (ii) financial guarantees
(including lettes of credit) (iii) securities underwritingDerivative business in banking:
- credit derivatives
- credit default swaps
- OTC markets (disadvantages and challenges)
- example of fixed-floating currency swap
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