25890 Foundations in Banking

Description

The subject is designed to provide an understanding of the principles that govern banks. Students learn why banks exist and how their special intermediation role shapes the financial system. While banks differ substantially from non-financial firms in terms of their assets and liabilities, students discover that there is also considerable variation among banks along these dimensions. Students also gain insight into the business models employed by banks and how they try to appeal to different customer segments. They also learn how to calculate and interpret high-level bank performance measures. To contrast the role of banks with the role of non-bank financial institutions, the subject examines the broking function of banks. Since banks are in the business of taking risks, the subject also covers the types of risk encountered by modern banks, as well as the most important strategies for managing those risks. Finally, students are introduced to two important developments in contemporary banking: digital payments and increased regulatory oversight.