Banking and Financial Markets: A Risk Management Perspective
3 – 4 hours
Banking and financial markets encompass the ‘ecosystem’ that (a) channelizes money from those who have it (i.e. savers/investors) to those who need it (i.e. borrowers) and (b) facilitates cross-border flow of funds through exchange of currencies. That ecosystem of banks and financial markets (including Central Banks) has deepened in size, sophistication, and complexity over the years. However, in recent times they have also been the subject of abuse, failures, and economic distress in several countries resulting in a ‘contagion’ that has concurrently affected several countries around the world!
More recently, and perhaps more importantly, thanks to the liberalization of most economies, the world has witnessed an exponential increase in the free flow of capital across countries. Banking institutions and financial markets, being the predominant conduit for such free flow of capital across countries, have therefore become even more “globally interconnected.” Such a globally interconnected financial system, combined with regulatory systems that are country-specific and hence varying considerably in rigor and implementation, has further compounded the risks and the consequent contagion, as witnessed in the global financial meltdown that was triggered in 2008.
In this more advance course, we will look at Banking and Financial Markets from a Risk Management Perspective:
- The embedded risks in any financial system: credit risk, interest rate risk, foreign exchange risk, operational risk, off-balance sheet risk, etc.
- The contagion effect of these risks, as witnessed in the 2008 global financial meltdown
- How are these risks identified, measured and managed, using several risk mitigation techniques and sound regulatory oversight
Professor PC Narayan
Finance and Control
Indian Institute of Management Bangalore (IIMB)
Week 1: Introduction to Financial Accounting
You will begin your study of Financial accounting and analysis by looking at the overall structure of accounting information and the structure of reporting. In this week, you will:
- Meet various users of financial information.
- Discuss the accounting information system.
- Learn fundamental accounting concepts.
- Understand basic financial statements. Prepare financial statements using the accounting equation.
Week 2: A Closer Look at the Balance Sheet
In this week, you will learn to define and cite examples of various elements in the balance sheet related to:
Week 3: A Closer Look at the Income Statement, Cash Flow Statement and Statement of Changes in Equity
- Learn the Concepts and various elements of the income statement. Appreciate the challenges faced in the preparation of the income statement.
- Understand the structure, elements and importance of the cash flow statement.
- Develop a basic understanding of statement of equity.
Weeks 4 & 5: Financial Statement Analysis
- Apply tools and techniques to analyse the financial statements to understand the performance.
- Use tools to understand the operational, financial and investment efficiency.
- Basic financial concepts
- Financial statements and their elements
- Various accounting standards with respect to the elements in the financial statements
- Techniques to analyse the financial statements
- Interpretation of financial statements for better decision-making
Executives, students pursuing post graduate and anyone who wants to upskill themselves on Financial Accounting.