This course covers the theory and practice of financial intermediation, broadly construed to include banks, savings institutions and investment/merchant banks. Topics will include the role of banking firms in a developed capital market, their impact on corporate financial decisions for non-banking firms, and the regulation of banks. The course includes a comprehensive analysis of the role of financial intermediaries in the development of fixed-income markets and provides an analysis of fixed income securities. Additional topics include models and techniques used for managing credit risk, interest rate risk and liquidity risk. These are applied to maturity matching, duration and immunization, loan sales, securitization, collateralized debt obligations (CDOs), and collateralized mortgage obligations (CMOs).

Learning Outcomes

Upon successful completion, students will have the knowledge and skills to:

1. Understand the role of banks in an economy and the global trends in banking
2. Understand how banks’ lending policies can influence corporate decision making
3. Identify and measure banking risks
4. Understand credit risk and credit risk management
5. Understand debt markets and their role in liquidity management
6. Understand interest rate risk and management
7. Understand banking regulation globally
8. Understand bank loan sales and securitization
9. Understand the causes and consequences of bank failure and the global financial crises
10. Work in teams and present results.

Research-Led Teaching

Text book material will be supplemented with the most recent information from research and news from: my own research, research from universities elsewhere, government departments, and international organisations i.e. World Bank, IMF etc., and news outlets.

Examination Material or equipment

Students will be allowed to bring a non-programable/scientific calculator and dictionary into the closed book tests.

Required Resources

 Text: Financial Markets and Institutions: A Risk Management Approach, 9th edition, by Anthony Saunders, Marcia Millon Cornett, McGraw Hill, 2013. http://shop.mcgraw-hill.com/mhshop/productDetails?isbn=0078034809

Students are expected to have access to a copy of the prescribed book for the duration of the semester. The book can be purchased from the on campus bookshop, with a small number of copies also available for 2 hour loan in the reserve loan section of the Chifley Library. 

 

In addition:

• Additional reading provided on a week-to-week basis
• CFA Materials (available at http://www.cfapubs.org/loi/ccb - see Wattle site for further information), CFA Code of Ethics and Standards of Professional Conduct, CFA Standards of Practice Handbook, CFA Research and Position Papers

Recommended Resources

Students are recommended to stay abreast with current events by regularly reading the financial news. Online resources such as Bloomberg, Reuters or the Wall Street Journal are the usual suspects.

Staff Feedback

Students will be given feedback in the following forms in this course:

• Written feedback
• Face-to-face feedback if necessary

Student Feedback

ANU is committed to the demonstration of educational excellence and regularly seeks feedback from students. Students are encouraged to offer feedback directly to their Course Convener or through their College and Course representatives (if applicable). The feedback given in these surveys is anonymous and provides the Colleges, University Education Committee and Academic Board with opportunities to recognise excellent teaching, and opportunities for improvement. The Surveys and Evaluation website provides more information on student surveys at ANU and reports on the feedback provided on ANU courses.

Other Information

Consultation hours will be confirmed at the start of the semester.

Assessment Requirements 

As a further academic integrity control, students may be selected for a 15 minute individual oral examination of their written assessment submissions.

Any student identified, either during the current semester or in retrospect, as having used ghost writing services will be investigated under the University’s Academic Misconduct Rule. 

Scaling

Your final mark for the course will be based on the raw marks allocated for each of your assessment items. However, your final mark may not be the same number as produced by that formula, as marks may be scaled. Any scaling applied will preserve the rank order of raw marks (i.e. if your raw mark exceeds that of another student, then your scaled mark will exceed the scaled mark of that student), and may be either up or down.

Referencing Requirements

Please use Harvard or Chicago style referencing. See here for more information:  https://academicskills.anu.edu.au/resources/handouts/referencing-style-guides

Support for Students

The University offers a number of support services for students. Information on these is available online from http://students.anu.edu.au/studentlife/

Extensions and Penalties

No submission of assessment tasks without an extension after the due date will be permitted. If an assessment task is not submitted by the due date, a mark of 0 will be awarded.

Late submission is not accepted for take-home examinations.

 

Class Schedule

Week/Session	Summary of Activities	Assessment
1	Roles and operations of banks
2	Bank financial statements and banking risks
3	Interest Rates and Interest Rate Risk
4	Lending Policies and Credit Risk
5	Debt Markets and Liquidity risk	Take home Mid-semester exam due at 12pm on Friday 29th March.
6	Markets risk
7	Regulation: Micro-prudential Policy
8	Regulation: Macro-prudential Policy	Presentation
9	Loan Sales Securitization	Presentation
10	Securitization	Presentation
11	Bank crises and failures: economic consequences	Presentation
12	Bank crises and failures: the future of banking	Presentation Group project due at 12pm on Friday 31st May.
13	Examination period	Take home Final exam due at 12pm on Friday 14th June.

Tutorial Registration

Please see Wattle for tutors’ information. 

Tutorial signup for this course will be done via the Wattle website. Detailed information about signup times will be provided on Wattle. When tutorials are available for enrolment, follow these steps: 

1. Log on to Wattle, and go to the course site. 

2. Click on the link “Tutorial enrolment” 

3. On the right of the screen, click on the tab “Become Member of ……” for the tutorial class you wish to enter. 

4. Confirm your choice 

If you need to change your enrolment, you will be able to do so by clicking on the tab “Leave group…” and then re-enrol in another group. You will not be able to enrol in groups that have reached their maximum number. Please note that enrolment in ISIS must be finalised for you to have access to Wattle.

Assessment Summary

Assessment task	Value	Due Date	Return of assessment	Learning Outcomes
Group presentation with slides	10 %	31/05/2019	11/06/2019	1,2,3,4,5,6,7,8,9,10
Group Project	20 %	31/05/2019	11/06/2019	1,2,3,4,5,6,7,8,9,10
Mid-Semester Examination	30 %	29/03/2019	05/04/2019	1,2,3,4,5,6,7,8,9
Final Examination	40 %	14/06/2019	04/07/2019	1,2,3,4,5,6,7,8,9

* If the Due Date and Return of Assessment date are blank, see the Assessment Tab for specific Assessment Task details

Policies

ANU has educational policies, procedures and guidelines, which are designed to ensure that staff and students are aware of the University’s academic standards, and implement them. Students are expected to have read the Academic Misconduct Rule before the commencement of their course. Other key policies and guidelines include:

• Student Assessment (Coursework) Policy and Procedure
• Special Assessment Consideration Policy and General Information 
• Student Surveys and Evaluations
• Deferred Examinations
• Student Complaint Resolution Policy and Procedure

Assessment Requirements

The ANU is using Turnitin to enhance student citation and referencing techniques, and to assess assignment submissions as a component of the University's approach to managing Academic Integrity. For additional information regarding Turnitin please visit the ANU Online website. Students may choose not to submit assessment items through Turnitin. In this instance you will be required to submit, alongside the assessment item itself, hard copies of all references included in the assessment item.

Moderation of Assessment

Marks that are allocated during Semester are to be considered provisional until formalised by the College examiners meeting at the end of each Semester. If appropriate, some moderation of marks might be applied prior to final results being released.

Assessment Task 1

Group presentation with slides

Presentations will be made in groups of 4-6 in size during tutorials. The task will be to present the information of your group project to the class as if you were presenting it to the board of directors of the bank. You need to explain:

1. how Financial Services Royal Commission is relevant to your bank (see more information in group project);
2. what the implications are for your bank; and
3. recommendations to the board about whether any action is necessary in response to the event, and if action is required, what type of action you recommend. 

• Each tutorial class will be split into 3 or 4 even groups – resulting in groups of approximately 4-6 students.
• Tutorial presentations will run in weeks 8-12 (excluding public holidays).
• The presentation will last 10 minutes, with an additional 5 minutes for discussion and questions from the class.
• How the workload is shared is up to each group.
• Each group members will typically receive the same mark, although peer review will be implemented to ensure all group members have contributed to the work, and could result in group members receiving different marks.
• Each group's presentation will be marked on (1) how well they analyse the issue and its relevance to the bank; (2) the quality of their delivery; and (3) their ability to engage the class in discussion.
• Each group must hand in (to their tutor) a copy of their presentation slides.

Assessment Rubrics

Word limit (where applicable): 4 slides Max (excluding the title slide).

Value: 10%

Presentation requirements: who and how the group presents is up to the group

Estimated return date: 1-2 weeks after the assessment date

As part of this assessment task group members will be asked to review their group peers in order to ensure individuals' contributions are correctly assessed. Further information will be provided on Wattle.

Assessment Task 2

Group Project

A more detailed guideline will be released in Week 2.

This is a group assignment. The assignment will be due at 12pm on Friday 31st May. 

Overview of the assessment:

Project will be made in groups of 4-6 in size within tutorials. The task will to analyse the impact of the recent Financial Services Royal Commission in Australia to a chosen bank (one of the Big Four). You are assigned to explain to the board of directors of your bank how it would impact your bank's future profitability and risk management. You need explain:

1. how Financial Services Royal Commission is relevant to your bank;
2. what the implications are for your bank regarding profitability and risk management; and
3. recommendations to the board about whether any action is necessary in response to the event, and if action is required, what type of action you recommend. 

• Each tutorial class will be split into 3 or 4 even groups – resulting in groups of approximately 4-6 students.
• How the workload is shared is up to each group.
• Each group members will typically receive the same mark, although peer review will be implemented to ensure all group members have contributed to the work, and could result in group members receiving different marks.
• Group projects will be marked on

1. how well they analyse the issue regarding (1) clarity (2) relevance (3) depth (both qualitatively and quantitatively) (4) broadness
2. valid suggestions

Assessment Rubrics

Word limit (where applicable): 3 pages Max.

Value: 20%

Estimated return date: 1-2 weeks after the assessment date

As part of this assessment task group members will be asked to review their group peers in order to ensure individuals' contributions are correctly assessed. Further information will be provided on Wattle.

Assessment Task 3

Mid-Semester Examination

There is a mid-semester TAKE HOME exam. The exam will be issued at 12pm Tuesday 26th March and due at 12pm on Friday 29th March. Details of where the exam can be picked up and returned will be confirmed at a later date.

Late submissions of the exam will not be accepted.

Assessment Rubrics

Word limit (where applicable): TBA

Value: 30%

Presentation requirements: N/A

Estimated return date: 1-2 weeks after the due date of the exam

Assessment Task 4

Final Examination

There is a final TAKE HOME exam. The exam will be issued at 12pm on Tuesday 11th June and due at 12pm on Friday 14th June. Details of where the exam can be picked up and returned will be confirmed at a later date.

Late submissions of the final exam will not be accepted.

Assessment Rubrics

Word limit (where applicable): TBA

Value: 40%

Presentation requirements: N/A

Estimated return date: 1-2 weeks after the due date of the exam

Academic Integrity

Academic integrity is a core part of our culture as a community of scholars. At its heart, academic integrity is about behaving ethically. This means that all members of the community commit to honest and responsible scholarly practice and to upholding these values with respect and fairness. The Australian National University commits to embedding the values of academic integrity in our teaching and learning. We ensure that all members of our community understand how to engage in academic work in ways that are consistent with, and actively support academic integrity. The ANU expects staff and students to uphold high standards of academic integrity and act ethically and honestly, to ensure the quality and value of the qualification that you will graduate with. The University has policies and procedures in place to promote academic integrity and manage academic misconduct. Visit the following Academic honesty & plagiarism website for more information about academic integrity and what the ANU considers academic misconduct. The ANU offers a number of services to assist students with their assignments, examinations, and other learning activities. The Academic Skills and Learning Centre offers a number of workshops and seminars that you may find useful for your studies.

Online Submission

You will be required to electronically sign a declaration as part of the submission of your assignment. Please keep a copy of the assignment for your records. Unless an exemption has been approved by the Associate Dean (Education) submission must be through Turnitin.

Hardcopy Submission

For some forms of assessment (hand written assignments, art works, laboratory notes, etc.) hard copy submission is appropriate when approved by the Associate Dean (Education). Hard copy submissions must utilise the Assignment Cover Sheet. Please keep a copy of tasks completed for your records.

Late Submission

No submission of assessment tasks without an extension after the due date will be permitted. If an assessment task is not submitted by the due date, a mark of 0 will be awarded.

Late submission is not accepted for take-home examinations.

Referencing Requirements

Accepted academic practice for referencing sources that you use in presentations can be found via the links on the Wattle site, under the file named “ANU and College Policies, Program Information, Student Support Services and Assessment”. Alternatively, you can seek help through the Students Learning Development website.

Returning Assignments

Tests and other assessment can be collected from the RSFAS filing cabinets outside the front office on level 4 CBE 26C.

Extensions and Penalties

Extensions and late submission of assessment pieces are covered by the Student Assessment (Coursework) Policy and Procedure. The Course Convener may grant extensions for assessment pieces that are not examinations or take-home examinations. If you need an extension, you must request an extension in writing on or before the due date. If you have documented and appropriate medical evidence that demonstrates you were not able to request an extension on or before the due date, you may be able to request it after the due date.

Resubmission of Assignments

There are no re-submissions for the assessment tasks.

Privacy Notice

The ANU has made a number of third party, online, databases available for students to use. Use of each online database is conditional on student end users first agreeing to the database licensor’s terms of service and/or privacy policy. Students should read these carefully. In some cases student end users will be required to register an account with the database licensor and submit personal information, including their: first name; last name; ANU email address; and other information.
In cases where student end users are asked to submit ‘content’ to a database, such as an assignment or short answers, the database licensor may only use the student’s ‘content’ in accordance with the terms of service – including any (copyright) licence the student grants to the database licensor. Any personal information or content a student submits may be stored by the licensor, potentially offshore, and will be used to process the database service in accordance with the licensors terms of service and/or privacy policy.
If any student chooses not to agree to the database licensor’s terms of service or privacy policy, the student will not be able to access and use the database. In these circumstances students should contact their lecturer to enquire about alternative arrangements that are available.

Distribution of grades policy

Academic Quality Assurance Committee monitors the performance of students, including attrition, further study and employment rates and grade distribution, and College reports on quality assurance processes for assessment activities, including alignment with national and international disciplinary and interdisciplinary standards, as well as qualification type learning outcomes.

Since first semester 1994, ANU uses a grading scale for all courses. This grading scale is used by all academic areas of the University.

Support for students

The University offers students support through several different services. You may contact the services listed below directly or seek advice from your Course Convener, Student Administrators, or your College and Course representatives (if applicable).

• ANU Health, safety & wellbeing for medical services, counselling, mental health and spiritual support
• ANU Diversity and inclusion for students with a disability or ongoing or chronic illness
• ANU Dean of Students for confidential, impartial advice and help to resolve problems between students and the academic or administrative areas of the University
• ANU Academic Skills and Learning Centre supports you make your own decisions about how you learn and manage your workload.
• ANU Counselling Centre promotes, supports and enhances mental health and wellbeing within the University student community.
• ANUSA supports and represents undergraduate and ANU College students
• PARSA supports and represents postgraduate and research students