A well-functioning financial system is fundamental to a modern economy, and banks provide special and important functions in society.

• Why do we have to have banks in this world? 

• Is the mobile payment system a threat to commercial banks? 

• How to prevent banks from being “too big to fail”?

    From the world’s first intuition that provides credit services to the Imperial Bank of China, the first modern bank in China established by Mr. Sheng Xuan Huai, the founder of Shanghai Jiao Tong University, to the top five largest banks in the world after years of reform; from the first bank draft to Mobile Payment, the Chinese wisdom helped the banking industry go through many ups and downs.

    On the other side of the Pacific Ocean, the banking industry in the U.S. has also been through many ups and downs, from the Bank Run in the 1930s, to the Savings and Loans Debacle in the late 1980s, then to the Subprime Loan Crisis in 2008.

    Through case studies, building on basics in finance and principles in economics, I will analyze the specialness of the financial intermediaries, and risks faced by banks, as well as the game played between the regulators and bank managers.

    This is an all-in-English course, in which, I will introduce the history and reform in banking industry in China to the world, and build a bridge between the West and the East; I will introduce analytical tools and techniques to deal with risks faced by banks in the global changing economy and build a bridge between the theory and practice.

    Let’s start the journey on Bank Management with uncertainty and lots of fun!

This course builds on basic financial theory and the principles courses in economics. It addresses topics that are important for managing financial institutions in a rapidly changing international environment. Upon successful completion of the course, student should be able to understand the role of financial institutions in the economy; explain why banks are unique, and therefore merit special attention; to understand the analytical foundation underlying financial institutions management, and be able to use them to analyze important financial issues, including financial crisis; be familiar with risk management techniques to deal with the various risks banks and other financial institutions face.

Weight of Assessment:

·        Final Exam                             :      40%

·        Class Assignments                 :      30%

·        Presentation and Term Paper :      20%

·        Class Participation                  :      10%

Prerequisites:

• FI100 Finance

• FI005 Money and Banking

• Students are expected to have some background in basic economic theory (macroeconomics and microeconomics), algebra, differential calculus, statistics, and a disposition to keep themselves informed of current developments in the area of banking and finance.

• Note: Please make sure you have an adequate background in analytics, linear algebra, statistics, economics, and finance. This is a course in finance, with a focus on risk management and quantitative analysis. This course is NOT suitable for students without any training in economics, statistics, analytics or linear algebra.

Textbooks and References:

Textbook:

·        Saunders and Cornett, Financial Institutions Management: A Risk Management Approach, 8th edition/International Edition, McGraw Hill, 2014 (FIM)

·        Peter S. Rose and Sylvia C. Hudgins, Bank Management and Financial Services, 9th Edition, International Edition, McGraw-Hill, 2013 (BMFS)

-      Peter S. Rose and Sylvia C. Hudgins, Bank Management and Financial Services, 9th Edition（英文缩减影印版）, 中国人民大学出版社

-      Peter S. Rose and Sylvia C. Hudgins, Bank Management and Financial Services (中文版), 9th Edition, 机械工业出版社, 2016

Reference book：

·        John C. Hull, Risk Management and Financial Institutions, Second Edition, Pearson, 2010