An Introduction To Banking 2e - Principles,Strategy and Risk Management
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More About This Title An Introduction To Banking 2e - Principles,Strategy and Risk Management

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A practical primer to the modern banking operation

Introduction to Banking, Second Edition is a comprehensive and jargon-free guide to the banking operation. Written at the foundational level, this book provides a broad overview of banking to give you an all-around understanding that allows you to put your specialty work into context within the larger picture of your organization. With a specific focus on risk components, this second edition covers all key elements with new chapters on reputational risk, credit risk, stress testing and customer service, including an updated chapter on sustainability. Practical material includes important topics such as the yield curve, trading and hedging, asset liability management, loan origination, product marketing, reputational risk and regulatory capital.

This book gives you the context you need to understand how modern banks are run, and the key points operation at all levels.

  • Learn the critical elements of a well-structured banking operation
  • Examine the risk components inherent in banking
  • Understand operational topics including sustainability and stress testing
  • Explore service-end areas including product marketing and customer service

Banks continue to be the heart of the modern economy, despite the global financial crisis —they have however become more complex. Multiple layers and a myriad of functions contribute to the running of today's banks, and it's critical for new and aspiring bankers to understand the full breadth of the operation and where their work fits in. Introduction to Banking, Second Edition provides an accessible yet complete primer, with emphasis on the areas that have become central to sustainable banking operation.

English

Professor Moorad Choudhry lectures on the MSc Finance programme at University of Kent Business School. He was previously Treasurer, Corporate Banking Division at The Royal Bank of Scotland, Head of Treasury at Europe Arab Bank, Head of Treasury at KBC Financial Products, Vice President in structured finance services at JPMorgan Chase and a gilt-edged market maker at ABN Amro Hoare Govett Ltd. He is a Fellow of the Chartered Institute for Securities & Investment, a Fellow of the London Institute of Banking and Finance, a Fellow of the Global Association of Risk Professionals and a Fellow of the Institute of Directors.

English

Foreword ix

Preface xi

Preface to the First Edition xv

Acknowledgements xvii

About the Author xix

PART I BANK BUSINESS AND THE MARKETS 1

1 BANK BUSINESS AND CAPITAL 3

2 CUSTOMER SERVICES AND MARKETING FOR BANK PRODUCTS 29

3 CREDIT ASSESSMENT AND MANAGING CREDIT RISK 49

4 THE MONEY MARKETS 95

5 THE YIELD CURVE 131

6 INTRODUCTION TO MONEY MARKET DEALING AND HEDGING 167

PART II ASSET–LIABILITY MANAGEMENT AND LIQUIDITY RISK 205

7 BANK ASSET AND LIABILITY MANAGEMENT I 207

8 ASSET AND LIABILITY MANAGEMENT II: THE ALCO 247

9 BANK LIQUIDITY RISK MANAGEMENT I 265

10 LIQUIDITY RISK MANAGEMENT II: BASEL III LIQUIDITY, LIABILITIES STRATEGY, STRESS TESTING, COLLATERAL MANAGEMENT AND THE HQLA 287

11 BUSINESS BEST-PRACTICE BANK INTERNAL FUNDS TRANSFER PRICING POLICY 329

12 NET INTEREST INCOME (NII), NET INTEREST MARGIN (NIM) AND THE MANAGEMENT OF INTEREST-RATE RISK
IN THE BANKING BOOK 343

13 SECURITISATION MECHANICS FOR BALANCE SHEET MANAGEMENT 375

PART III STRATEGY, REGULATORY CAPITAL AND CASE STUDIES 391

14 STRATEGY SETTING 393

15 BANK REGULATORY CAPITAL, BASEL RULES AND ICAAP 419

16 MANAGING OPERATIONAL RISK 493

17 ADVICE AND PROBLEM SOLVING: CASE STUDIES 505

Appendix A Financial Markets Arithmetic 531

Appendix B Abbreviations and Acronyms 549

Index 553

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