AF6036 - Risk in Financial Insitutions I

What will I learn on this module?

In this module you will learn about the capital risks faced by financial institutions. These include credit risk, risks from securitisation exposure, market risk and liquidity risk. You will study the specific areas of credit, market and liquidity risk in the context of the relevant regulatory framework (The Basel Accords) and draw on case study material provided by high profile banks and financial institutions. You will be expected to develop an understanding of the nature of these interlinked risks as well as to understand how they are measured and managed in line with regulations. The module will cover topics such as:
• A typology of risk in banking and financial institutions: definitions; types; and importance.
• International banking regulation and capital adequacy.
• Credit, market and liquidity risk regulatory framework under the Basel Accords.
• Credit Risk: Consumer/commercial credit risk and credit decision making; Measuring credit risk through credit scoring models and modern advanced techniques; counterparty credit risk using examples of the loan and derivative networks, including how to calculate counterparty credit risk via the credit valuation adjustment.
• Market Risk: Measuring market risk through Value-at-Risk models (variance-covariance, historical simulation and Monte-Carlo simulation models); the move toward expected shortfall; other contemporary regulatory models.
• Liquidity Risk: Market and balance sheet sources; measurement techniques; stored vs purchase management styles.

How will I learn on this module?

You will learn in this module through lectures (24 hours) IT-based workshops (12 hours) tutor based (82 hours) and independent study (82 hours). The lectures will be used to deliver the basic knowledge and subject material required to enable students to meet the module learning outcomes. Lectures will be research-led with a significant practical component attached to them. Workshops will develop understanding and knowledge by reinforcing subject material and exploring relevant issues with material distributed in advance. You will learn through individual and group work, presentations and discussion which will develop your discussion and analysis skills. The workshops will provide an opportunity for you and your teaching team to interact and discuss the materials with other students. You will also explore case-studies to help you contextualise what you have read. The module will involve both directed and independent learning. Directed learning plays a key part in the achievement of the module learning outcomes and provides an opportunity for self-assessment of your progress throughout the semester. Directed learning may include a range of activities including pre-reading, preparation for workshop activity and preparing for presentations. Independent learning is learning which you identify by pursuing areas of interest that provide deeper or broader knowledge of the subject, through a range of learning activities that might include reading, reflection and research.

How will I be supported academically on this module?

You will be supported by a teaching and learning plan (TLP), which outlines the pattern and content of the formal sessions, tutor-directed study and independent reading. You will be supported throughout by the module teaching team who are available to answer your questions either in person or by email/telephone. Your module is supported by the e-learning portal which contains lecture and workshop materials as well as additional material for independent study. Your lectures will be recorded and uploaded to the e-learning portal which you will be able to access to consolidate your knowledge and develop understanding. Your electronic reading list includes core material to support your lectures/workshops and a comprehensive range of professional and regulatory reports/articles and academic journal articles relevant to your studies.

What will I be expected to read on this module?

All modules at Northumbria include a range of reading materials that students are expected to engage with. The reading list for this module can be found at: http://readinglists.northumbria.ac.uk
(Reading List service online guide for academic staff this containing contact details for the Reading List team – http://library.northumbria.ac.uk/readinglists)

What will I be expected to achieve?

Knowledge & Understanding (KU):
• Develop a knowledge and understanding of capital risk in financial institutions arising from credit, market and liquidity risk. (MLO1)
• Critically evaluate measurement models and management issues in the context of the regulatory requirements within the banking and finance sector. (MLO2)

Intellectual / Professional skills & abilities (IPSA):
• Develop quantitative and qualitative evaluation skills whilst measuring and managing the risks covered in this module. (MLO3)
• Develop an ability to apply and effectively communicate regulatory requirements to real-life banking and financial institution scenarios (MLO4)

Personal Values Attributes (PVA):
• Develop an awareness of the risks facing international financial markets and how management can be equipped with knowledge and expertise to implement stronger organisational controls to address risks. (MLO5

How will I be assessed?

Formative Assessment:
Formative assessment will take place through individual and group work on directed questions/case studies to take place at the end of each substantive area covered in the module. You will discuss these substantive areas in the workshops after each lecture so that you can obtain direct feedback on the module content and the assigned tasks. You should be aware that formative feedback can and will occur in any communication with the academic tutor.

Summative Assessment:
The module is assessed by two elements:
1. Group presentation (15 mins) on contemporary issues in risk management to be presented during the semester (20%). (MLO3 and MLO4)
2. 2500 word assignment (80%). (MLO1, MLO2, MLO3, MLO4, MLO5)

Pre-requisite(s)

None

Co-requisite(s)

None

Module abstract

The banking and financial services industry operates in a risk structured environment. Financial institutions are required to measure, manage and transfer risk under the constant eye of the financial regulators. The module focuses on the specific area of capital risk arising from credit risk, securitisation exposure, market risk and liquidity risk. This will be conducted within the context of the relevant regulatory framework and draw upon case study material provided by high profile banking and financial institutions.

Course info

UCAS Code N4N1

Credits 20

Level of Study Undergraduate

Mode of Study 1 year full-time

Location City Campus, Northumbria University

City Newcastle

Start September 2023

Fee Information

Module Information

All information is accurate at the time of sharing.

Full time Courses starting in 2023 are primarily delivered via on-campus face to face learning but may include elements of online learning. We continue to monitor government and local authority guidance in relation to Covid-19 and we are ready and able to flex accordingly to ensure the health and safety of our students and staff.

Contact time is subject to increase or decrease in line with additional restrictions imposed by the government or the University in the interest of maintaining the health and safety and wellbeing of students, staff, and visitors, potentially to a full online offer, should further restrictions be deemed necessary in future. Our online activity will be delivered through Blackboard Ultra, enabling collaboration, connection and engagement with materials and people.

 

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