溢 制卧爱分贸多本芳 银行管理学 《银行管理学》教学大纲 Chapter 1 Fundamental Forces of Change in Banking Chapter Objectives 1.Examine how recent competitive trends affect the banking industry. 2.Demonstrate how the forces of change(deregulation and reregulation,financial innovation,securitization,globalization,and technological advances)reflect increased competition and have lead to industry consolidation,increased diversification of products and services,higher capital requirements,and entry into banking by nonbank firms, such as,investment banks,insurance companies,finance companies,and others. 3.Describe the activities of non-bank financial institutions,such as investment banks and captive automobile finance companies. 4.Introduce the structure and activities of GE Capital Services as a non-bank financial conglomerate Key Concepts 1.Competition in banking is evidenced by five fundamental forces of change that transform the structure and operation of financial institutions and markets: a. deregulation and reregulation b. financial innovation c. securitization d. globalization e.technological advances 2.Increased competition brought about by deregulation has induced banks to take on greater portfolio risks in search of acceptable returns.Many banks have moved to nontraditional banking services to earn fees that can offset the volatility in earnings from traditional loans and better help grow earnings.Increased competition has also induced traditional nonbank firms to enter traditional banking businesses. 3.Since the 1980s deregulation efforts have removed interest rate ceilings on allowable rates paid depositors and charged on certain loans and also expanded the range of products and services that banks can offer.Interstate banking and branching restrictions have similarly been eliminated. 4.In response to regulation,financial institutions create new financial instruments and financial markets,and restructure the means by which they deliver products to consumers.This financial innovation enables them to circumvent restrictions and continue growth. 第1页共29页
银行管理学 第 1 页 共 29 页 《银行管理学》教学大纲 Chapter 1 Fundamental Forces of Change in Banking Chapter Objectives 1. Examine how recent competitive trends affect the banking industry. 2. Demonstrate how the forces of change (deregulation and reregulation, financial innovation, securitization, globalization, and technological advances) reflect increased competition and have lead to industry consolidation, increased diversification of products and services, higher capital requirements, and entry into banking by nonbank firms, such as, investment banks, insurance companies, finance companies, and others. 3. Describe the activities of non-bank financial institutions, such as investment banks and captive automobile finance companies. 4. Introduce the structure and activities of GE Capital Services as a non-bank financial conglomerate. Key Concepts 1. Competition in banking is evidenced by five fundamental forces of change that transform the structure and operation of financial institutions and markets: a. deregulation and reregulation b. financial innovation c. securitization d. globalization e. technological advances 2. Increased competition brought about by deregulation has induced banks to take on greater portfolio risks in search of acceptable returns. Many banks have moved to nontraditional banking services to earn fees that can offset the volatility in earnings from traditional loans and better help grow earnings. Increased competition has also induced traditional nonbank firms to enter traditional banking businesses. 3. Since the 1980s deregulation efforts have removed interest rate ceilings on allowable rates paid depositors and charged on certain loans and also expanded the range of products and services that banks can offer. Interstate banking and branching restrictions have similarly been eliminated. 4. In response to regulation, financial institutions create new financial instruments and financial markets, and restructure the means by which they deliver products to consumers. This financial innovation enables them to circumvent restrictions and continue growth
制卧份贸易+学 银行管理学 5. Securitization is the process of converting assets into marketable securities.It enables banks to move assets off-balance sheet and increase fee income.It increases competition for the types of standardized products,such as mortgages and other credit-scored loans,and eventually lowers the prices paid by consumers by increasing the supply and liquidity of these products.Given the problems of Enron,and Citicorp's and J.P.Morgan's efforts to make Enron's financial statements appear less risky,analysts now focus carefully on which parties bear risk in securitization agreements. 6.Financial markets and institutions are becoming increasingly global in scope. Firms must recognize that businesses in other countries as well as their own are competitors,and that international events affect domestic operations. 7.Banks'traditional loan operations have been seriously undermined by the development of the commercial paper and junk bond markets as alternatives to bank loans.Corporations that issue these securities view them as cheaper substitutes for bank credit.Generally,any loan that can be credit scored can potentially be securitized.Securitization allows nonbank firms to originate loans, package them into pools,and sell securities collateralized by securities in the pools.This increases the competition for the securitized asset and will eventually lead to lower rates. 8.Technological advances in banking are constantly changing the competitive environment.Many of these advances relate to payment services and how customers conduct banking business.Many bankers and bank analysts believe that the greatest growth in the delivery of banking services will be through debit and smart cards,telephone banking and the internet.Such electronic payments systems will transform how people conduct their banking business and how banking firms compete. 9.GE Capital represents a financial services company that is itself part of General Electric.In July 2002,Jeff Immelt,GE's CEO,split GE Capital into four separate businesses:GE Commercial Finance,GE Consumer Finance,GE Insurance,and GE Equipment Management.GE Capital had almost $460 billion in assets in mid-2002,which made it the largest non-bank finance company in the U.S.GE Capital can offer services in all areas and compete directly with banks,yet avoid regulation as a bank because it does not own or manage a commercial bank or savings and loan.In 2001,GE Capital accounted for 40%of GE's total earnings and 46%of GE's total revenue. 10.Many firms obtained unitary thrift charters during the 1990s to offer nationwide banking services,yet avoid regulation as a commercial bank.Formally,a firm obtains a federal savings bank charter,which allows it to issue deposits and make loans without hindering the nonfinancial products and services that it might otherwise offer.The firm can operate in a wide range of businesses not allowed traditional commercial banks.Thus,many insurance companies,finance companies,investment banks,and firms like Ford,Archer Daniel Midland,and State Farm Insurance operate unitary thrifts. 第2页共29页
银行管理学 第 2 页 共 29 页 5. Securitization is the process of converting assets into marketable securities. It enables banks to move assets off-balance sheet and increase fee income. It increases competition for the types of standardized products, such as mortgages and other credit-scored loans, and eventually lowers the prices paid by consumers by increasing the supply and liquidity of these products. Given the problems of Enron, and Citicorp’s and J.P. Morgan’s efforts to make Enron’s financial statements appear less risky, analysts now focus carefully on which parties bear risk in securitization agreements. 6. Financial markets and institutions are becoming increasingly global in scope. Firms must recognize that businesses in other countries as well as their own are competitors, and that international events affect domestic operations. 7. Banks' traditional loan operations have been seriously undermined by the development of the commercial paper and junk bond markets as alternatives to bank loans. Corporations that issue these securities view them as cheaper substitutes for bank credit. Generally, any loan that can be credit scored can potentially be securitized. Securitization allows nonbank firms to originate loans, package them into pools, and sell securities collateralized by securities in the pools. This increases the competition for the securitized asset and will eventually lead to lower rates. 8. Technological advances in banking are constantly changing the competitive environment. Many of these advances relate to payment services and how customers conduct banking business. Many bankers and bank analysts believe that the greatest growth in the delivery of banking services will be through debit and smart cards, telephone banking and the internet. Such electronic payments systems will transform how people conduct their banking business and how banking firms compete. 9. GE Capital represents a financial services company that is itself part of General Electric. In July 2002, Jeff Immelt, GE’s CEO, split GE Capital into four separate businesses: GE Commercial Finance, GE Consumer Finance, GE Insurance, and GE Equipment Management. GE Capital had almost $460 billion in assets in mid-2002, which made it the largest non-bank finance company in the U.S. GE Capital can offer services in all areas and compete directly with banks, yet avoid regulation as a bank because it does not own or manage a commercial bank or savings and loan. In 2001, GE Capital accounted for 40% of GE’s total earnings and 46% of GE’s total revenue. 10. Many firms obtained unitary thrift charters during the 1990s to offer nationwide banking services, yet avoid regulation as a commercial bank. Formally, a firm obtains a federal savings bank charter, which allows it to issue deposits and make loans without hindering the nonfinancial products and services that it might otherwise offer. The firm can operate in a wide range of businesses not allowed traditional commercial banks. Thus, many insurance companies, finance companies, investment banks, and firms like Ford, Archer Daniel Midland, and State Farm Insurance operate unitary thrifts
雄 制卧台贸多上考 银行管理学 Teaching Suggestions This chapter represents an opportunity to link bank management topics to current events. As a semester project,students should be encouraged to keep a file or log of events from recent newspapers or magazines that demonstrate the existence and impact of deregulation/reregulation,financial innovation,securitization,globalization,and technological advances.Ask students to i)obtain a list of nonbank firms that have obtained unitary thrift charters,ii)identify the number of internet banks that offer traditional banking products/services only via the internet,iii)keep a record of banks that buy banking and other firms outside their home country,and iv)provide a list of recent financial innovations in banking.Regular reference to the Wall Street Journal and the American Banker contributes to student understanding and interest. Chapter 2 Analyzing Bank Performance Chapter Objectives 1.Introduce bank financial statements,including the basic balance sheet and income statement,and discuss the interrelationship between them. 2.Provide a framework for analyzing bank performance over time and relative to peer banks. Introduce key financial ratios that can be used to evaluate profitability and the different types of risks faced by banks.Focus on the trade-off between bank profitability and risk. 3.Identify performance measures that differentiate between small independent banks (specialty banks)and larger banks that are part of multibank holding companies. 4.Distinguish between types of bank risk,credit,liquidity,interest rate,capital,operational, and reputational. 5.Describe the nature of and meaning of regulatory CAMELS ratings for banks. 6. Provide applications of data analysis to sample banks'financial information. 7.Describe performance characteristics of different-sized banks. 8. Describe how banks can manipulate financial information to 'window-dress performance. Key Concepts 1.Bank managers must balance banking risks and returns because there is a fundamental trade-off between profitability,liquidity,asset quality,market risk and solvency. Decisions that increase banking risk must offer above average profits.The more liquid a bank is and the more equity capital used to fund operations,the less profitable is a bank, ceteris paribus. 2.Banks face five basic types of risk in day-to-day operations:credit risk,liquidity risk, market risk,capital/solvency risk,and operational risk.Market risk encompasses interest 第3页共29页
银行管理学 第 3 页 共 29 页 Teaching Suggestions z This chapter represents an opportunity to link bank management topics to current events. As a semester project, students should be encouraged to keep a file or log of events from recent newspapers or magazines that demonstrate the existence and impact of deregulation/reregulation, financial innovation, securitization, globalization, and technological advances. Ask students to i) obtain a list of nonbank firms that have obtained unitary thrift charters , ii) identify the number of internet banks that offer traditional banking products/services only via the internet, iii) keep a record of banks that buy banking and other firms outside their home country, and iv) provide a list of recent financial innovations in banking. Regular reference to the Wall Street Journal and the American Banker contributes to student understanding and interest. Chapter 2 Analyzing Bank Performance Chapter Objectives 1. Introduce bank financial statements, including the basic balance sheet and income statement, and discuss the interrelationship between them. 2. Provide a framework for analyzing bank performance over time and relative to peer banks. Introduce key financial ratios that can be used to evaluate profitability and the different types of risks faced by banks. Focus on the trade-off between bank profitability and risk. 3. Identify performance measures that differentiate between small independent banks (specialty banks) and larger banks that are part of multibank holding companies. 4. Distinguish between types of bank risk; credit, liquidity, interest rate, capital, operational, and reputational. 5. Describe the nature of and meaning of regulatory CAMELS ratings for banks. 6. Provide applications of data analysis to sample banks’ financial information. 7. Describe performance characteristics of different-sized banks. 8. Describe how banks can manipulate financial information to ‘window-dress’ performance. Key Concepts 1. Bank managers must balance banking risks and returns because there is a fundamental trade-off between profitability, liquidity, asset quality, market risk and solvency. Decisions that increase banking risk must offer above average profits. The more liquid a bank is and the more equity capital used to fund operations, the less profitable is a bank, ceteris paribus. 2. Banks face five basic types of risk in day-to-day operations: credit risk, liquidity risk, market risk, capital/solvency risk, and operational risk. Market risk encompasses interest
制卧台贸易上兰 银行管理学 rate risk,foreign exchange risk and price risk.Each type of risk refers to the potential variation in a bank's net income or market value of stockholders'equity resulting from problems that affect that part of the bank's activities. 3.Banks also face risks in the areas of country risk associated with loans or other activity with foreign government units and off-balance sheet activities,which create contingent liabilities.More recently,banks have focused on reputation risk.For example,in 2002 Citigroup found that even though it continued to report strong profits,the firm experienced strong criticism for 1)its role in facilitating strategies to disguise Enron's true financial status,2)problems in its sub-prime lending programs via the Associates and its own internal finance company activities,and 3)problems with its Salomon Smith Barney subsidiary with analyst conflicts between stock reports and the firm's investment banking relationships.For much of 2002,Citigroup's stock price reflected the continued barrage of reputation problems more than the firm's reported earnings. 4.A bank's return on equity(ROE)can be decomposed in terms of the duPont system of financial ratio analysis.This examination of historical balance sheet and income statement data enables an analyst to evaluate the comparative strengths and weaknesses of performance over time and versus peer banks.The Uniform Bank Performance Report (UBPR)data reflect the basic ratios from this return on equity model. 5. Different-sized commercial banks exhibit different operating characteristics and thus performance measures.Small banks typically report a higher return on assets(ROA)than large banks because they earn higher gross yields on assets and pay less interest on liabilities. 6.High performance banks generally benefit from lower interest and non-interest expense and limit credit risk so that loan losses are relatively low.They also operate with above average stockholders'equity. 7.Many banks can successfully "window-dress"performance by manipulating the reporting of financial data.They may accelerate revenue recognition and defer expenses or selectively alter when they take securities gains or losses and time when to charge off loans or report loans as non-performing.As such,they may inappropriately smooth earnings with provisions for loan losses or by other means.Analysts must be careful when evaluating extraordinary transactions that have one-time gain or loss features. Teaching Suggestions 1.It is extremely important that students fully understand the material in this chapter before attempting more difficult analysis.The text introduces actual balance sheet and income statement data for PNC Bank,the principal subsidiary of PNC Bank Corp.,and data for a hypothetical community bank that is representative of the typical independent bank.You should take a substantial amount of time to describe the basic balance sheet items. emphasizing the dominant holdings of loans,securities,and cash/cash equivalents among assets,and the role of core deposits versus noncore or purchased(hot money)liabilities. Demonstrate how the income statement is structured to emphasize the financial nature of banks by focusing on net interest income and the comparison on noninterest income and noninterest expense.Contrast this with the income statement of a nonfinancial 第4页共29页
银行管理学 第 4 页 共 29 页 rate risk, foreign exchange risk and price risk. Each type of risk refers to the potential variation in a bank's net income or market value of stockholders’ equity resulting from problems that affect that part of the bank's activities. 3. Banks also face risks in the areas of country risk associated with loans or other activity with foreign government units and off-balance sheet activities, which create contingent liabilities. More recently, banks have focused on reputation risk. For example, in 2002 Citigroup found that even though it continued to report strong profits, the firm experienced strong criticism for 1) its role in facilitating strategies to disguise Enron’s true financial status, 2) problems in its sub-prime lending programs via the Associates and its own internal finance company activities, and 3) problems with its Salomon Smith Barney subsidiary with analyst conflicts between stock reports and the firm’s investment banking relationships. For much of 2002, Citigroup’s stock price reflected the continued barrage of reputation problems more than the firm’s reported earnings. 4. A bank's return on equity (ROE) can be decomposed in terms of the duPont system of financial ratio analysis. This examination of historical balance sheet and income statement data enables an analyst to evaluate the comparative strengths and weaknesses of performance over time and versus peer banks. The Uniform Bank Performance Report (UBPR) data reflect the basic ratios from this return on equity model. 5. Different-sized commercial banks exhibit different operating characteristics and thus performance measures. Small banks typically report a higher return on assets (ROA) than large banks because they earn higher gross yields on assets and pay less interest on liabilities. 6. High performance banks generally benefit from lower interest and non-interest expense and limit credit risk so that loan losses are relatively low. They also operate with above average stockholders' equity. 7. Many banks can successfully "window-dress" performance by manipulating the reporting of financial data. They may accelerate revenue recognition and defer expenses or selectively alter when they take securities gains or losses and time when to charge off loans or report loans as non-performing. As such, they may inappropriately smooth earnings with provisions for loan losses or by other means. Analysts must be careful when evaluating extraordinary transactions that have one-time gain or loss features. Teaching Suggestions 1. It is extremely important that students fully understand the material in this chapter before attempting more difficult analysis. The text introduces actual balance sheet and income statement data for PNC Bank, the principal subsidiary of PNC Bank Corp., and data for a hypothetical community bank that is representative of the typical independent bank. You should take a substantial amount of time to describe the basic balance sheet items, emphasizing the dominant holdings of loans, securities, and cash/cash equivalents among assets, and the role of core deposits versus noncore or purchased (hot money) liabilities. Demonstrate how the income statement is structured to emphasize the financial nature of banks by focusing on net interest income and the comparison on noninterest income and noninterest expense. Contrast this with the income statement of a nonfinancial
”制卧台贸易上兰 银行管理学 corporation.It is also useful to discuss the role of provision for loan losses,its noncash expense feature,and the linkage with the contra-asset account for loan loss reserves. Many banks view provisions as an easily managed figure that can produce whatever earnings figure is desired. 2.The application of the return on equity(ROE)model to PNC's data and the risk measures can be used to demonstrate the trade-off between profitability and risk.Carefully walk students through the calculations of ROE,ROA,EM,AU,ER and TAX,but focus on interpreting the ratios. 3.As an assignment,it is useful to have the students evaluate the profitability and risk ratios for Community National Bank(CNB)and write-up an analysis to be discussed in class. This works best after completing a detailed analysis of PNC's data.It is easy to get bogged down in data.Students should be encouraged to focus on interpreting the financial ratios rather than on the calculations.The template provided with the text can be used to handle subsequent computations and cases.Emphasize the importance of reviewing at least 3 years of historical financial data to determine key trends,and comparing the most recent performance ratios with those of peer banks to determine where significant deviations occur. 4.The financial ratios are provided in a framework that follows reporting in the Uniform Bank Performance Report(UPBR),which bankers obtain from federal regulators.The BANK template provided with the text can be used by students to evaluate the performance of any financial institution once students have entered the raw data. Special Projects 1.Have the students perform the analysis in Case 1:Southwestern State Bank.The use of the Lotus template is encouraged because it allows students to focus on interpreting the data rather than calculating the ratios.Have students write up a report that examines the bank's performance over the past 3 years and versus peer banks. 2.Select two or more well-known Global Banks,Nationwide Banks or Super Regional Banks and obtain their most recent annual reports and 10-K statements,if possible.Have students perform the risk versus return analysis as summarized in Exhibits 3.4-3.8 using the BANK template.Require that students carefully review footnotes to the financial statements for additional information and ask them to read the chairman's letter to stockholders.Students should submit a written report as if they are a consultant responsible for identifying strengths and weaknesses in firm performance,and recommending strategic changes in management policies to improve performance. 3.Have students collect financial information for savings and loan associations,credit unions,investment banks,and finance companies.Use the Bank template to conduct the profit and risk analysis outlined in Exhibits 3.4,3.6,3.7 and 3.8.After interpreting the data in line with that described in part B above,have students compare the performance with that of commercial banks.Ask students to specifically identify where differences exist in financial reporting and in the profit versus risk trade-off. 4.PNC Bank reported significant problems in 2001 and 2002 having to re-state earnings multiple times.By mid-2002.the regulators restricted PNC's activities due to 第5页共29页
银行管理学 第 5 页 共 29 页 corporation. It is also useful to discuss the role of provision for loan losses, its noncash expense feature, and the linkage with the contra-asset account for loan loss reserves. Many banks view provisions as an easily managed figure that can produce whatever earnings figure is desired. 2. The application of the return on equity (ROE) model to PNC's data and the risk measures can be used to demonstrate the trade-off between profitability and risk. Carefully walk students through the calculations of ROE, ROA, EM, AU, ER and TAX, but focus on interpreting the ratios. 3. As an assignment, it is useful to have the students evaluate the profitability and risk ratios for Community National Bank (CNB) and write-up an analysis to be discussed in class. This works best after completing a detailed analysis of PNC's data. It is easy to get bogged down in data. Students should be encouraged to focus on interpreting the financial ratios rather than on the calculations. The template provided with the text can be used to handle subsequent computations and cases. Emphasize the importance of reviewing at least 3 years of historical financial data to determine key trends, and comparing the most recent performance ratios with those of peer banks to determine where significant deviations occur. 4. The financial ratios are provided in a framework that follows reporting in the Uniform Bank Performance Report (UPBR), which bankers obtain from federal regulators. The BANK template provided with the text can be used by students to evaluate the performance of any financial institution once students have entered the raw data. Special Projects 1. Have the students perform the analysis in Case 1: Southwestern State Bank. The use of the Lotus template is encouraged because it allows students to focus on interpreting the data rather than calculating the ratios. Have students write up a report that examines the bank's performance over the past 3 years and versus peer banks. 2. Select two or more well-known Global Banks, Nationwide Banks or Super Regional Banks and obtain their most recent annual reports and 10-K statements, if possible. Have students perform the risk versus return analysis as summarized in Exhibits 3.4 – 3.8 using the BANK template. Require that students carefully review footnotes to the financial statements for additional information and ask them to read the chairman's letter to stockholders. Students should submit a written report as if they are a consultant responsible for identifying strengths and weaknesses in firm performance, and recommending strategic changes in management policies to improve performance. 3. Have students collect financial information for savings and loan associations, credit unions, investment banks, and finance companies. Use the Bank template to conduct the profit and risk analysis outlined in Exhibits 3.4, 3.6, 3.7 and 3.8. After interpreting the data in line with that described in part B above, have students compare the performance with that of commercial banks. Ask students to specifically identify where differences exist in financial reporting and in the profit versus risk trade-off. 4. PNC Bank reported significant problems in 2001 and 2002 having to re-state earnings multiple times. By mid-2002, the regulators restricted PNC’s activities due to