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2019/20 Undergraduate Module Catalogue

LUBS3145 Risk Management in Banking

10 creditsClass Size: 100

Module manager: Francesco Vallascas
Email: f.vallascas@lubs.leeds.ac.uk

Taught: Semester 2 (Jan to Jun) View Timetable

Year running 2019/20

Pre-requisites

LUBS2260Banks and Banking Systems
LUBS2265Commercial Banking

This module is not approved as a discovery module

Module summary

This module examines the major banking risks with an emphasis on their measurement and management. The focus is on the implementation of conventional risk-management techniques to cope with risks that arise from i) the asset side; ii) the liability side and iii) from a bank’s exposure to off-balance sheet activities. Practical examples will be used to demonstrate the effectiveness of risk-management strategies in reducing a bank’s exposure to risks.

Objectives

By completing this module, students will acquire an understanding of the role and importance of risk-management in the modern banking business. They will be familiar with tools and strategies to quantify and reduce the exposure of a bank to risks. The module will provide students with the ability to apply quantitative tools that are conventionally part of the management of banking risks.

Learning outcomes
After completing this module students should be able to:
- Identify and assess the major banking risks
- Explain and critically evaluate conventional risk-management techniques in the banking industry
- Explain and critically assess the key differences between ‘Gap Analysis’ and ‘Duration Gap Analysis’ in the management of interest rate risk
- Describe and critically evaluate a stress-test analysis of major banking risks.


Syllabus

1. Banking risks
2. Credit Risk Management: Individual Loan Risk
3. Credit Risk Management: Portfolio Risk
4. Liquidity Risk Management
5. Interest rate risk management: Gap Analysis and Duration Gap Analysis
6. Interest rate risk management: The use of derivatives
7. Market risk and value at risk (VaR)
8. Operational risks
9. International risk assessment
10. Risk reporting and stress tests
11. Banking Ethics

Teaching methods

Delivery typeNumberLength hoursStudent hours
Lecture111.5016.50
Seminar81.008.00
Private study hours75.50
Total Contact hours24.50
Total hours (100hr per 10 credits)100.00

Private study

Students are required to undertake specified pre-reading and question preparation in advance of the classes based on the material introduced in the lectures.

Opportunities for Formative Feedback

Students will be able to monitor their progress through weekly seminars. Model answers and answers and marking schemes for workshop and past and specimen examination papers will allow students to assess their own performance.

Methods of assessment


Exams
Exam typeExam duration% of formal assessment
Unseen exam 2 hr 100.00
Total percentage (Assessment Exams)100.00

A two-hour re-sit exam will be available in August

Reading list

The reading list is available from the Library website

Last updated: 10/01/2020

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