CeFiMS - MBA and Postgraduate Diploma in Banking

Bank financial management [0FM0203]
This course has a somewhat more practical orientation than many other courses in the MSc programme, focusing as it does on the microeconomic problems of financial management of banking firms. This does not mean, however, that the course is devoid of theoretical interest. It also raises some new theoretical problems for consideration, many of them concerned with the way we need to conceptualise the banking firm. This course examines the role and importance of bank financial management to the modern bank. It teaches the basic models of financial management taught by University Economics Departments and Business Schools, which were constructed from the experience of mature capitalist economies. The course discusses the various trends shaping banking markets, such as institutionalisation, securitisation, globalisation and concentration. Among its aims are the following: to set the banking firm in the context of a changing financial services industry; to look at the role of the financial manager within the banking firm; to examine bank capital and capital structure, and to consider the question of the adequate regulation of the banking sector to ensure its safety, to preserve bank liquidity and prevent bank failures.

Financial law [FFL0104]
Principles of English commercial law. Financial law in the context of English commercial contract law. English contractual documentation (comparison with civilian jurisdictions). Risk management role of English commercial law and contractual documentation. Warranties (including financial warranties). Concepts of money and payment. Instruments. The legal basis of derivatives. Currency and interest rate swaps. Futures and options. The legal structure of futures markets transactions. The banker-customer relationship. The current account. Interest bearing accounts. Netting. Secured Financing. Classification and characteristics of credit and security. Creation, enforcement and transfer of security rights. Principles of perfection and priorities. The floating charge. Conditional sales and hire purchase. The finance lease. Assignment. Financing against stock and receivables. Security over book debts. Bank balances as security. Guarantees. Asset-based finance. Securitisation.

Risk management: principles and applications [FFL0105]
Portfolio optimisation: risk and return in securities markets. Principles of arbitrage and hedging. Hedging with options and futures. Pricing of options contracts and futures. Warrants, convertibles and swaps. Risk management using options and futures. Real options. Managing market risk. VAR techniques. Credit risk: credit ratings, creditmetrics.

Corporate finance [0FM0202]
The theories, examples, and empirical studies in Corporate finance which are discussed in this course concentrate on the finance of corporations whose shares are traded on a well organised stock market. The purpose of the course is to explain the observable financial decisions of corporations and portfolio managers, and to interpret the behaviour of the securities markets which results from the decisions of those and other agents. Traditionally, the securities markets considered in corporate finance are ‘spot’ or ‘cash’ stock markets dealing in company shares and bonds. But modern finance also includes large and growing markets in ‘derivatives’, especially options and futures, which are contracts relating to the future prices of the underlying shares or bonds. To ‘explain the behaviour’ of any of the financial markets involves explaining how the prices of shares, bonds and derivatives are determined. The course aims to enable students to understand and analyse the theoretical principles relating to corporate finance, and the controversies and criticisms which surround these theoretical propositions. It focuses on the relation between corporations’ decisions on investing in productive (‘physical’) assets and issuing financial liabilities, and the markets in the financial liabilities (equities and debt) which they issue. The theorems concerned with corporations’ decision problems which the course examines include the Net Present Value Rule, the Modigliani-Miller Theorem on Dividend Policy and their earlier seminal Theorem on Debt-Equity Ratios, and Agency Theory; and the main theorems focusing on the Operation of Financial Markets analysed are the Efficient Markets Hypothesis, the Capital Asset Pricing Model, and the Theory of Option Pricing.

Law and regulation of electronic finance and internet banking [FFL0113]
In taking this course students will gain a grounding in the legal and regulatory issues concerning electronic banking and finance in different jurisdictions, including in the UK and at EU level. Students will also acquire an understanding of the impact that this has on financial services in general and their transactional and contractual aspects in particular.

Electives

Macroeconomic policy and financial markets [FME0101]
Macroeconomic policy and financial markets focuses on the relationship between macroeconomic policies and financial markets. How do central banks’ policies on interest rates and credit relate to financial markets? What is the relation between budget deficits and financial markets? How do financial markets relate to investment and savings flows? The course includes both theory and empirical material.

Banking and capital markets [FME0103]
This course covers the role of banking and finance in the economy. It introduces some of the central issues and ideas in modern theories of banking and finance in the light of recent thinking about the relationship between banking, finance and the real economy. In this course, finance is examined within a general framework concentrating on the experience of advanced capitalist economies, including an introduction to the current concern with derivatives. As a contrast, applications to less developed economies are also, briefly, considered. The course is organised around four principal themes: the relationship between financial markets, financial institutions, and the economy’s real investment and savings; the trade-off between risk and expected returns and their links to information and monitoring; the efficiency of financial markets; and the dialectic between regulation and deregulation or liberalisation of financial markets.

New for 2007

MBA and Postgraduate Diploma in Banking

Structure and Syllabus

Compulsory courses

Electives