Course Syllabus

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Course Objectives:

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.

 

This is a hybrid class offered to onsite students in SJTU and online exchange students via Virtual Exchange Students program at APRU and Jiao Tong Global Classroom program. The online open-source course at icourse163.org is offered at the same time.

Prerequisites:

  • Students are expected to have some background in basic economic theory (macroeconomics and microeconomics), algebra, differential calculus, statistics.
  • Students are expected to keep themselves informed of current developments in the area of banking and finance.
  • Note: Please make sure you have adequate background in analytics, linear algebra, statistics, economics and finance. This is a course in finance, with focus on the risk management and quantitative analysis. This course is NOT suitable for students without any training in economics, statistics, analytics or linear algebra, check the Lecture notes 0 on necessary background on econometrics and statistics.

Contact Points:

  • Wechat Group:
    • Important announcements about course updates
  • Canvas: oc.sjtu.edu.cn（上海交通大学线上课程平台）
    • Announcement
    • Lecture notes
    • Lecture video/links
    • Class Assignment
    • Project group up sign up
    • Q&A at Discussion Board

  • https://www.icourse163.org/course/SJTU1-1457912173

    (Bank Management, 中国大学慕课爱课程平台) 
    • Mooc videos of each class （课程预录视频，用于复习回看）
  • http://mooc1.chaoxing.com/course/207313751.html （上海交通大学超星网课平台）
    • In class interaction
    • use your jaccount /email to log in and join the class (for details check announcement "Chaoxing App Tools for in-class interaction")  

Office Hour and Contact:  

  • 30 minutes after each class or by appointment.
  • The most efficient way to contact me is by email or wechat group (QR code available at Canvas), and I will usually reply in 24 hours. Email: nanli@sjtu.edu.cn
  • You can also post your questions in the Discussion Board on Canvas or at icourse163 (China MOOC)

  • Teaching Assistants:

Textbooks and References:

Textbook:

  • Course packet written by Professor Nan Li
  • FIM: Anthony Saunders, Marcia Cornett and Otgo Erhemjamts, Financial Institutions Management: A Risk Management Approach, 11th Edition, ISBN10: 1264413041 | ISBN13: 9781264413041, McGraw Hill, 2024
  • Li, Nan and Qian, Meijun, Alternative Financial Institutions in China (May 4, 2023). Forthcoming in the Research Handbook of Alternative Finance, Available at SSRN: https://ssrn.com/abstract=4521419
  • Web Appendices (mheducation.com)
  • Financial Institutions Management (mheducation.com) Student Edition support (multiple choice questions and web appendix)

References：

  • 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
  • John C. Hull, Risk Management and Financial Institutions, Second Edition, Pearson, 2010
  • Diamond, Douglas W. (1984). Financial Intermediation and Delegated Monitoring, Review of Economic Studies, vol. 51, 393–414.
  • Diamond, Douglas W. and Philip H. Dybvig (1983). Bank Runs, Deposit Insurance, and Liquidity, Journal of Political Economy, Vol. 91, No. 3, 401-419.
  • Hart, Oliver, and Luigi Zingales (2011). A New Capital Regulation for Large Financial Institutions. American Law and Economics Review 13 (2): 453-490.
  • Stiglitz, J. E., & Weiss, A. (1981). Credit Rationing in Markets with Imperfect Information. The American Economic Review, 71(3), 393–410.

Weight of Assessment:

  • Class Assignments:                     40%
  • Presentation and Term Paper:   30%
  • Class Participation:                     30%

Warning: 

  • Plagiarism is taken very seriously.  Students caught plagiarizing in class assignments, term paper, and/or exams in this course have been severely penalized. Any student caught cheating in the final exam will be failed in this course and reported to the school for further penalty.

Class Assignment:

There will be 3-4 class assignments. Students are encouraged to discuss on assignments, but each student should finish the assignment on her or him own and hand in separate answers.  

Term Paper and Class Presentation:

Students are advised to form a working group of no more than 5 students. Each group should write a term paper and present it in the class. Each group can choose to write a paper on a case study from the list given in the syllabus or a topic related to bank risk management. However, the topic chosen by each group is subject to the approval of the lecturer.

Note: I expect each group to apply the methods/theory learned in the class to analyze the case or topic of your choice. Simple review of the case or literature review of a topic will result in low score.

The following questions should be addressed in your term paper if a case study is chosen,

  1. What has happened and how did it happen?
  2. To your opinion, what are the specific risks involved? You need to present arguments based on data or facts to support your opinion.
  3. As a bank manager, what lesson in can we learn from this case?

The following questions should be addressed in your term paper if self-selected topic is chosen,

  1. What is the question or problem?
  2. Why this question is important or interesting?
  3. How do you address this question, i.e. empirical analysis or theoretical analysis?

Each group should prepare to present the term paper in 15 minutes with 3-5 minutes for Q&A. The presentation slides should be submitted on Canvas before the presentation.

The term paper should be no more than 20 pages with double spaces and Times New Roman fonts no smaller than 11 pt. The data source and references should be clearly and completely documented.

Timeline for term paper and presentation (subject to change)

  1. Week 3-5: Form group and decide on term paper topic
  2. Week 7: Bid for the case study and allocation of the topic.
  3. Week 15 and 16 (May 31 and June 7): Presentation of term paper
  4. Week 18 (June 21):,  Due date for term paper.

A “Best Presentation” prize will be awarded to the group who does the best job in presentation. Each group needs to evaluate the performance of other groups and the Best Presentation prize will be awarded to the group with highest average score from group evaluation and lecture evaluation.

Class Participation:

  • In-class quiz (10%)
  • Online discussion (10%)
  • Active participation in the class discussion. Such activities include good comments, questions, articles and even pointing out flaws and typos in class material. (10%)

A “Best Question” prize will be awarded to the student who raises interesting questions and/or makes good comments in the class or on the forum.

List of the Case Study and Research Topics:

  • AIG, Allied Irish Bank, Bankers Trust, Barings Bank, China Aviation Oil, Continental Illinois, Daiwa Bank, Lehman Brothers, LTCM, Société Générale, Washington Mutual Fund, Norther Rock, UBS Rogue Trader (2011), Citibank in 2008
  • Online Banking, Mobile Payment, Micro Finance, Bitcoin, FinTech, P2P, Shadow Banking, Digital RMB, Village and Town Bank in China and etc.

Suggested Periodicals:


Useful Links: 

Course Summary:

Date Details Due