FINA0051-1 : Banking and Insurance

Study Programmes 2016-2017

FINA0051-1

Banking and Insurance

Duration :

30h Th

Number of credits :

Master in economics : general (120 ECTS)		5
Master in management (120 ECTS)		5
Master in economics : general (60 ECTS)		5
Master in mathematics (120 ECTS)		5

Lecturer :

Fabien Boniver, Georges Hübner

Coordinator :

Georges Hübner

Language(s) of instruction :

English language

Organisation and examination :

Teaching in the second semester

Units courses prerequisite and corequisite :

Prerequisite or corequisite units are presented within each program

Learning unit contents :

This course features in the framework of the CFA Institute University Recognition Program. It spans a significant portion of the CFA Programe Candidate Body of Knowledge (CBOK), and explicitly prepares for the CFA certification.
1. Partim Banking:
The course introduces the general activities of a financial institution, with a focus on the bank's role as a financial intermediary. The Bank's balance sheet structure is analysed in detail, with the specificities of the bank's objectives and constraints. The recent crises of 2008 and 2010-11 will be analysed with their impact on the evolution of the banking industry. The first elements of bank risk management will be introduced.
Content :
a. Lecture 1
i. Part A: Introduction to banking (Rose ch. 1,2,3)
ii. Part B: Financial structure (Rose ch. 5)
b. Lecture 2
i. Part A: Neo-classic theory of banking
ii. Part B: The management of capital (Rose ch.15)
c. Lecture 3
i. Part A: Measuring and evaluating performance (Rose ch. 6)
ii. Part B: Risk management for changing interest rates. ALM and duration techniques (Rose ch. 7)
iii. Part C: Credit risk in Banking

2. Partim Insurance:
The course introduces the notion of insurance as it is considered by its different stakeholders: the consumer and society, the insurer himself, the surrounding economical actors and institutions. The inverted production cycle of the insurance business is emphasized, and basic actuarial mechanisms for pricing and provisioning are exposed. Finally, the new European supervision and regulation context, "Solvency II", is presented.
a. Lecture 1 (cf. Harrington-Niehaus ch. 1, 4, 9)
i. Risk: definitions, classification, cost
ii. Insurance: a form of risk management
iii. Key facts about the European insurance market
iv. Some remarks on insurance availability and behaviours
b. Lecture 2 (cf. Harrington-Niehaus, ch. 8)
i. The inverted production cycle
ii. Cartography of an insurer activities and value creation
iii. Introduction to tariffs
iv. Introduction to reserves
c. Lecture 3
i. The need for prudential supervision and regulation
ii. Solvency I
iii. Towards Solvency II
iv. Some institutional actors

Learning outcomes of the learning unit :

The course pursues two main objectives:
- Get a global understanding of bank and insurance-related concepts.
- Develop student's analytical and deductive skills to get a critical assessment of the situation and activities of a financial institution.
Intended Key Learning Outcomes:
In concordance with the Key Learning Outcomes of the Master in Management Sciences, this course aims to enable the student to:
- Strategy: Establish a strategy in order to optimize the value chain of a company, an organization or a project * based on the analysis of its financial and economic context. * taking into account its political, social and societal context. * taking into account its legal constraints. * adopting the position of a specialist in the field of management of his / her finality. * demonstrating a critical mind and scientific precision. - Implementation: Take charge of the everyday management of a company, an organization or a project * implementing the strategy that was established for this company, organization or project. * in a holistic perspective, taking into account the interactions between its different functions. * capitalizing on the characteristics of a more and more digitalized world. * analyzing his/her managerial practice with a critical and ethical mind. - Control: Plan and implement the performance and quality control in a company, an organization or a project * in a holistic perspective, taking into account the interactions between its different functions. - Communication: Communicate efficiently, internally and externally, about a company, organization or project * in English. - Adaptability: Adapt his/her managerial practice to the needs of a fast-evolving world. * being conscious of its societal, economic, political and environmental issues. * showing curiosity and a scientific precision of academic level. * showing creativity, autonomy and entrepreneurial spirit.

Prerequisite knowledge and skills :

Introductory course of financial markets.

Planned learning activities and teaching methods :

Methodology used and level of estimated method:
- Ex-cathedra courses: theoretical sessions (preliminary review, introduction of theoretical concepts, case study...). - Practical case (by teams of 2) dedicated to the analysis of a financial institution - Exercises sessions on Excel and Matlab, practical issues are handled (use of financial data provider).

Mode of delivery (face-to-face ; distance-learning) :

Ex-cathedra lectures: 6*4h = 24h
Self-study and case development: 15h
Exercises: 4h