Financial Institutions' Risk Management
| Module title | Financial Institutions' Risk Management |
|---|---|
| Module code | BEAM102 |
| Academic year | 2024/5 |
| Credits | 15 |
| Module staff | Dr Cherie Chen (Convenor) Fangyuan Kou (Convenor) |
| Duration: Term | 1 | 2 | 3 |
|---|---|---|---|
| Duration: Weeks | 11 |
| Number students taking module (anticipated) | 60 |
|---|
Module description
This module is designed to provide you with a comprehensive understanding of risk management practices within the context of financial institutions. The module explores various types of risks faced by financial institutions, including credit risk, market risk, liquidity risk, operational risk, and regulatory risk. You will learn the fundamental principles, frameworks, and techniques used in identifying, measuring, monitoring and controlling these risks. You will develop an understanding of the principles underlying sustainable and responsible decision-making, while they identify, assess, and mitigate various risks that can potentially impact their operations and financial stability. You will be presented with real-world case studies to illustrate effective risk management strategies and enable them to learn from successful risk management implementations.
Module aims - intentions of the module
The aim of this module is to introduce you to integrated knowledge and a critical understanding of risks inherent in financial institutions and apply a range of risk management techniques and strategies. You will be equipped with the knowledge, skills, and tools necessary to manage risks effectively and enhance sustainable and responsible decision-making processes. You will:
- develop a critical awareness of the current trends in managing the risks encountered by financial institutions.
- identify and measure the risks inherent in financial institutions and critically evaluate the practice of cost-effective risk management within financial institutions.
- critically review the sustainable principles of effective risk management and control in the context of a financial institution’s obligations to its stakeholders and the environment.
- understand the current debates about the appropriate regulatory framework.
Intended Learning Outcomes (ILOs)
ILO: Module-specific skills
On successfully completing the module you will be able to...
- 1. critically evaluate the nature and significance of risks faced by financial institutions, emphasising the role of ESG criteria in risk identification, measurement, and mitigation strategies;
- 2. apply risk management frameworks and techniques to identify, measure, monitor and control; risks.
ILO: Discipline-specific skills
On successfully completing the module you will be able to...
- 3. develop practical knowledge and application of financial and risk management tools;.
- 4. assess the impact of regulatory requirements on risk management practices in financial institutions.
ILO: Personal and key skills
On successfully completing the module you will be able to...
- 5. acquire and use data to analyse and solve international case studies.
- 6. apply independent research and study skills in the exploration of contemporary real-world issues.
Syllabus plan
The syllabus list is indicative.
-
Nature and types of risks faced by financial institutions
-
Importance of risk management in financial institutions
-
Risk identification and assessment
-
Risk measurement, principles and techniques
-
Risk mitigation and control strategies
-
Regulatory management framework
-
Integrated risk management
-
Analysis of real-world risk management cases and scenarios
Learning activities and teaching methods (given in hours of study time)
| Scheduled Learning and Teaching Activities | Guided independent study | Placement / study abroad |
|---|---|---|
| 30 | 120 | 0 |
Details of learning activities and teaching methods
| Category | Hours of study time | Description |
|---|---|---|
| Scheduled Learning and Teaching Activities | 20 | Lectures |
| Scheduled Learning and Teaching Activities | 10 | Workshops (all students in one weekly session) |
| Guided Independent Study | 120 | Reading, research, reflection; preparation for lectures, workshops and assessments |
Formative assessment
| Form of assessment | Size of the assessment (eg length / duration) | ILOs assessed | Feedback method |
|---|---|---|---|
| Problem sets and applied exercises | Weekly (1 hour) | 1-6 | Discussion feedback from peers and lecturer |
| Mid-term mock test | 50 minutes | 1-4 | Indicative answers |
Summative assessment (% of credit)
| Coursework | Written exams | Practical exams |
|---|---|---|
| 70 | 30 | 0 |
Details of summative assessment
| Form of assessment | % of credit | Size of the assessment (eg length / duration) | ILOs assessed | Feedback method |
|---|---|---|---|---|
| In-class test | 30 | 50 minutes | 1-4 | Indicative answers |
| Assignment | 70 | 2,500 words | 1-6 | Written feedback from the lecturer |
Details of re-assessment (where required by referral or deferral)
| Original form of assessment | Form of re-assessment | ILOs re-assessed | Timescale for re-assessment |
|---|---|---|---|
| In-class test (30%) | In-class test (50 minutes, 30%) | 1-4 | Referral/deferral period |
| Assignment (70%) | Assignment (2,500 words, 70%) | 1-6 | Referral/deferral period |
Re-assessment notes
Deferral – if you miss an assessment for certificated reasons judged acceptable by the Mitigation Committee, you will normally be either deferred in the assessment or an extension may be granted. The mark given for a re-assessment taken as a result of deferral will not be capped and will be treated as it would be if it were your first attempt at the assessment.
Referral – if you have failed the module overall (i.e. a final overall module mark of less than 50%) you will be required to sit the written examination and/or practical examination as necessary. If you are successful on referral, your overall module mark will be capped at 50%.
Indicative learning resources - Basic reading
Basic reading:
Hull, J. C. (2023). Risk Management and Financial Institutions (6?th?ed.). Wiley Finance.
Población García, F. J. (2017). Financial Risk Management: Identification, Measurement and Management. [Electronic resource]. Cham: Springer International Publishing: Imprint: Palgrave Macmillan.
Saunders, A., Cornett, M. and Erhemjamts, O. (2021).?Financial Institutions Management: A Risk Management Approach?(11th?ed.). New York: McGraw Hill.
Thompson, C. & Hopkin P. (2021) Fundamentals of Risk Management: Understanding, Evaluating and Implementing Effective Enterprise Risk Management. (6th ed.). Kogan Page
Further readings:
Hull, J.C. (2021). Options, Futures, and Other Derivatives. (11th ed.). Pearson.
Fraser R.S. J., Simkins B. & Narvaez, K. (2014). Implementing Enterprise Risk Management: Case Studies and Best Practices. Wiley
Lynch, D., Hasan, I. & Siddique, A. (Eds). (2023). Validation of Risk Management Models for Financial Institutions: Theory and Practice. Cambridge, UK: Cambridge University Press.
Indicative learning resources - Web based and electronic resources
- All lecture and tutorial materials are posted on the intranet.
Indicative learning resources - Other resources
- Supplementary reading materials are indicated in the references of each lecture.
| Credit value | 15 |
|---|---|
| Module ECTS | 7.5 |
| Module pre-requisites | None |
| Module co-requisites | None |
| NQF level (module) | 7 |
| Available as distance learning? | No |
| Origin date | 10/06/2023 |
| Last revision date | 18/06/2024 |
