Department of Economics and Finance, City University of Hong Kong

EF4334 Regulation and Management of Financial Institutions

Instructor: Yue Ma, Chair Professor of Finance Brief Course Aims This course aims to highlight the important role that regulations come into play when managing the risks of financial institutions. It is equally important that students have a sound understanding of tools that financial institutions use to manage various risks and their applications in the context of evolving regulations. Assessment Tasks/Activities (Students are required to pass both coursework and examination components in order to pass the course.)
Contributions to in-class discussion and attendance Class quiz (open book, one hour, 1st week of Oct) Mid-term exam (close book, one hour, 31 Oct/1 Nov) Final Exam (close book, three hours) Total 10% 10% 20% 60% 100% Pass your name in a slip after you answer a class Q!

Indicative contents
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Financial services industry, their special functions and regulation Bank accounting Risks of financial institutions Interest rate risk Credit risk Market risk Operational risk, foreign exchange risk, and liquidity risk Liability and liquidity management Capital adequacy, insolvency risk Diversification, product diversification, geographic diversification Financial derivatives and regulations Securitization

Textbook (we will follow very closely)

Saunders, A. and M. M. Cornett, Financial Institutions Management: A Risk Management Approach, McGraw-Hill, 7th edition: http://www.mhhe.com/saunders7e (Lecture ppt can be downloaded from CityU online Blackboard system: http://www.cityu.edu.hk/cityu/logon/eportal.htm) Multiple choice Qs can be practiced from textbook website (you may choose any chapter): http://highered.mcgraw-hill.com/sites/0073530751/student_view0

Supplementary Readings
Rose, P.S., Commercial Bank Management, McGraw-Hill, newest edition. Fabozzi, F. and F. Modigliani, Capital Markets: Institutions and Instruments, Prentice Hall, newest edition.