Description Bank Management: A Decision-Making Perspective closely examines the impact of today’s changing, competitive environment on banks and banking services, as well as the entire financial services industry. It reflects the latest developments, from comprehensive regulatory updates to details of the many new programs that have arisen from recent financial crises. Whether you are already in the financial services industry or will be a future banking professional, you will gain a better understanding of the risks associated with loans and securities, the process of securitization, excessive leverage and inadequate liquidity, technology and operations, and also gain insights into the banking markets in Asia and the United States.
The book provides a framework for developing effective strategies for bank managers to maintain an effective balance between generating profits and taking risks. Its unique approach to presenting bank management from a decision-making perspective shows how bank managers make solid financial decisions. You will see how decisions in one area affect performance and opportunities in other areas. In addition, you will develop a solid foundation of understanding based on knowledge of the current issues that bank managers face. As you become familiar with basic financial models used to formulate decisions, you will better understand the strengths and weaknesses of data analysis.
Features
Focus on Decision-Making and Understanding of Bank Management. Key chapters address the specific aspects of a banking issue or problem, explain how a financial model or decision framework is applied, and then demonstrate how the model or framework is applied using sample data.
Supplementary Materials for Students and Instructors. Endof- chapter questions and problems test students’ understanding of important issues and data analysis. In addition, Microsoft Excel templates provide a full range of decision models that are populated with data for problems and cases in the text. Instructors can also download the Instructor’s Manual, Test Bank, and Microsoft PowerPoint presentations from the Companion website.
Emphasis on Cash Flow Analysis in the Lending Decision. There is a strong emphasis on cash flow analysis as part of the lending decision. The authors introduce a comprehensive procedure to generate cash-based income statements, explain how to interpret the results, and provide an approach to forecast a potential borrower’s future performance.
Latest Developments in the Banking and Financial Services Industry. Chapter 1 discusses the change in the financial landscape as a result of the global financial crisis of 2008–2009.
Introduction to the Major Asian Banking Markets. In Chapters 2, 3, 13, 14, and 15, Vic Edwards describes the banking industry in East Asia and Southeast Asia, with strong emphasis on China, Hong Kong, Singapore, and Malaysia. Topics discussed include the practice of guanxi in Asian banking, government policies and regulations, measurement of bank performance, credit policy and loan characteristics, and credit rating agencies.
Insights on Banking Technology and Operations—In Chapter 18, Randall Duran discusses banking technology and operations, which are key success determinants for banks. Key business concerns, organizational structures, and operational risk considerations are reviewed, and he also discusses how operations and technology are managed, in terms of strategy, personnel, processes, and governance.
Table of Contents
Preface
About the Authors PART I: INTRODUCTION
1. Banking and the Financial Services Industry
2. Government Policies and Regulation PART II: BANK PERFORMANCE
3. Analyzing Bank Performance
4. Managing Noninterest and Noninterest Expense
5. The Performance of Nontraditional Banking Companies PART III: SECURITIES AND INTEREST RATE RISKS
6. Pricing Fixed-Income Securities
7. Managing Interest Rate Risk: GAP and Earnings Sensitivity
8. Managing Interest Rate Risk: Economic Value of Equity
9. Using Derivatives to Manage Interest Rate Risk PART IV: LIQUIDITY & CAPITAL
10. Funding the Bank
11. Managing Liquidity
12. The Effective Use of Capital PART V: LOANS & CREDIT
13. Overview of Credit Policy and Loan Characteristics
14. Evaluating Commercial Loan Requests and Managing Credit Risk
15. Evaluating Consumer Loans PART VI: INVESTMENTS, GLOBALIZATION, & TECHNOLOGY
16. Managing the Investment Portfolio
17. Global Banking Activities
18. Managing Technology and Operations Bibliography
Glossary
Index
Timothy W. Koch , University of South Carolina, Columbia S. Scott MacDonald, Southern Methodist University, Dallas Vic Edwards, UNSW Australia Randall E. Duran, Singapore Management University