Banking and Insurance (CF30904)

General information

Type:	OP	Curs:	1	Period:	S semester
ECTS Credits:	3 ECTS

Teaching Staff:

Group	Teacher	Department	Language
	José María Abad Hernández	Economía, Finanzas y Contabilidad	ENG

This course is restricted to MSc in Finance Students.

Core courses of the MSc in Finance and basic undergraduate mathematics and statistics. Bessis, J. (2010) "Risk management in banking" book is a good complement to this course, though not strictly necessary and does not cover all the material.

The aim of this course is for the students to acquire a broad knowledge of the banking and insurance sectors and the main challenges these industries face in the current economic environment. Banks and some insurance companies were at the center stage of the international financial crisis and face tremendous challenges because of the digital revolution. The course drives the student through the main elements to understand how banks and insurance companies work and make business. We begin by analyzing the particular role of banks in the economy, understanding a bank's and insurer's balance sheet and the risks they face and how they manage them (including asset & liability management, ALM). Regulation plays a critical role in both industries, hence some time is devoted to understand Solvency II, Basel I and II, the financial crisis and its impact, and its regulatory response through Basel III (with particular emphasis on capital requirements). The course ends looking at some topics like valuation of banks and insurance companies and the new stress tests techniques. Specific focus on different issues can be subject to "hot topics" during the academic year (how QE works, TLAC or MREL discussions, for example). The course ends with students analysing and presenting a valuation excercise of a bank of their choice.

1. Money and banks in a modern encomy

2. Looking at banks and insurance companies

3. Risks and managing risks

4. ALM, imparied loans and Basle I

5. Capital in banking: Basle II

6. Financial crisis and Basle III

7. Valuation and Stress Tests

8. Insurance companies

The course is taught through theoretical classes, complemented with practical examples and assignements.

Session slides and reading material (optional and compulsory) will be provided before every sesión.
Other useful references are:
-Bank of International Settlements (BIS) Standards on Capital and Liquidity
-Bessis, J. (2010) "Risk management in banking", Ed. Wiley.

Group	Teacher	Department
	José María Abad Hernández	Economía, Finanzas y Contabilidad