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Unit of study_

BANK3012: Bank Supervision

Semester 2, 2020 [Normal day] - Camperdown/Darlington, Sydney

This unit provides undergraduate students with knowledge and a greater understanding of the central issues and principles underpinning recent developments in the global regulation and supervision of banking/financial institutions. The concept of financial stability as the goal of public policy and the rationale for prudential regulation and supervision of banks is discussed first. Students are then exposed to a range of concepts and issues pertaining to the measurement, management and prudential regulation of key risks in banking (i.e. market risk, credit risk, operational risk, liquidity risk). Other elements in the unit entail discussion and examination of issues relating to the concept of capital adequacy and risk-based capital ratios with particular reference to Basel Capital Accords; the Basel Core Principles for Effective Banking Supervision; different national approaches to regulation and supervision of banks; government financial safety nets (i.e.'Lender of Last Resort' and depositor protection schemes); post-crisis structural banking reform proposals.

Unit details and rules

Unit code BANK3012
Academic unit Finance
Credit points 6
Prohibitions
? 
None
Prerequisites
? 
BANK2011 or ECOS2004 or FINC2011
Corequisites
? 
None
Assumed knowledge
? 

BANK3011

Available to study abroad and exchange students

No

Teaching staff

Coordinator Trent Hagland, trent.hagland@sydney.edu.au
Type Description Weight Due Length
Final exam (Open book) Type C final exam Final exam
Short answer + calculations
50% Formal exam period 2 hours
Outcomes assessed: LO1 LO2 LO3 LO4 LO5 LO6
In-semester test (Open book) Type C in-semester exam Mid-semester exam
MCQ + Short Answer; Will cover lectures 1-6 inclusive.
20% Week 07
Due date: 12 Oct 2020 at 15:00
1 hour
Outcomes assessed: LO1 LO2 LO5 LO6
Assignment group assignment Group project
Written report plus a group presentation.
30% Week 11
Due date: 09 Nov 2020 at 15:00
2000 words + 10 minute oral presentation
Outcomes assessed: LO1 LO2 LO3 LO4 LO5 LO6
group assignment = group assignment ?
Type C final exam = Type C final exam ?
Type C in-semester exam = Type C in-semester exam ?

Assessment summary

 

  • Group project: Students will prepare a written report on an assigned topic.
  • Mid-semester exam: Students will take this exam to assess their familiarity and comprehension of the issues and analytical concepts covered from weeks 1-6 inclusive. This is an open-book exam and typically comprises of a combination of multiple-choice questions and short answer questions.
  • Final exam: The final exam will cover the entire content of the unit. This is a open-book exam and typically comprises of a combination of multiple-choice questions, short answer calculation-based questions, and short-essay or discussion questions.

Detailed information for each assessment can be found on Canvas.

Assessment criteria

The University awards common result grades, set out in the Coursework Policy 2014 (Schedule 1).

As a general guide, a high distinction indicates work of an exceptional standard, a distinction a very high standard, a credit a good standard, and a pass an acceptable standard.

Result name

Mark range

Description

High distinction

85 - 100

Awarded when you demonstrate the learning outcomes for the unit at an exceptional standard, as defined by grade descriptors or exemplars outlined by your faculty or school. 

Distinction

75 - 84

Awarded when you demonstrate the learning outcomes for the unit at a very high standard, as defined by grade descriptors or exemplars outlined by your faculty or school.

Credit

65 - 74

Awarded when you demonstrate the learning outcomes for the unit at a good standard, as defined by grade descriptors or exemplars outlined by your faculty or school.

Pass

50 - 64

Awarded when you demonstrate the learning outcomes for the unit at an acceptable standard, as defined by grade descriptors or exemplars outlined by your faculty or school. 

Fail

0 - 49

When you don’t meet the learning outcomes of the unit to a satisfactory standard.

For more information see sydney.edu.au/students/guide-to-grades.

For more information see guide to grades.

Late submission

In accordance with University policy, these penalties apply when written work is submitted after 11:59pm on the due date:

  • Deduction of 5% of the maximum mark for each calendar day after the due date.
  • After ten calendar days late, a mark of zero will be awarded.

Academic integrity

The Current Student website  provides information on academic integrity and the resources available to all students. The University expects students and staff to act ethically and honestly and will treat all allegations of academic integrity breaches seriously.  

We use similarity detection software to detect potential instances of plagiarism or other forms of academic integrity breach. If such matches indicate evidence of plagiarism or other forms of academic integrity breaches, your teacher is required to report your work for further investigation.

You may only use artificial intelligence and writing assistance tools in assessment tasks if you are permitted to by your unit coordinator, and if you do use them, you must also acknowledge this in your work, either in a footnote or an acknowledgement section.

Studiosity is permitted for postgraduate units unless otherwise indicated by the unit coordinator. The use of this service must be acknowledged in your submission.

Simple extensions

If you encounter a problem submitting your work on time, you may be able to apply for an extension of five calendar days through a simple extension.  The application process will be different depending on the type of assessment and extensions cannot be granted for some assessment types like exams.

Special consideration

If exceptional circumstances mean you can’t complete an assessment, you need consideration for a longer period of time, or if you have essential commitments which impact your performance in an assessment, you may be eligible for special consideration or special arrangements.

Special consideration applications will not be affected by a simple extension application.

Using AI responsibly

Co-created with students, AI in Education includes lots of helpful examples of how students use generative AI tools to support their learning. It explains how generative AI works, the different tools available and how to use them responsibly and productively.

WK Topic Learning activity Learning outcomes
Week 01 1. Overview of the course; 2. What is regulation?; 3. The case for (and against) regulation; 4. The politics and philosophy of regulation. Lecture (3 hr) LO1
Week 02 1. Principles of bank supervision; 2. The Regulators (Australian and International); 3. Regulatory Models. Lecture (3 hr) LO1 LO2
Week 03 1. What triggers regulation?; 2. Financial crises; 3. The Banking Royal Commission. Lecture (3 hr) LO1 LO2 LO5
Week 04 1. International banking supervision; 2. The Basel Accords; 3. Dodd Frank and EMIR. Lecture (3 hr) LO1 LO2 LO5 LO6
Week 05 1. Conduct risk; 2. What is conduct risk?; 3. How to measure conduct risk?; 4. How to regulate conduct risk? Lecture (3 hr) LO3 LO5 LO6
Week 06 1. Operational risk; 2. What is operational risk?; 3. How to measure operational risk?; 4. How to regulate operational risk? Lecture (3 hr) LO2 LO3 LO5
Week 07 1. Mid-semester exam; 2. Introduction to Credit, Market and Liquidity Risk. Lecture (3 hr) LO1 LO2 LO3 LO4 LO5 LO6
Week 08 1. Credit Risk; 2. What is credit risk?; 3. How to measure credit risk?; 4. How to regulate credit risk? Lecture (3 hr) LO2 LO4 LO5 LO6
Week 09 1. Market Risk; 2. What is market risk?; 3. How to measure market risk?; 4. How to regulate market risk? Lecture (3 hr) LO1 LO2 LO3 LO5 LO6
Week 10 1. Liquidity risk; 2. What is liquidity risk?; 3. How to measure liquidity risk?; 4. How to regulate liquidity risk? Lecture (3 hr) LO1 LO2 LO3 LO5 LO6
Week 11 1. Group project presentations (Week 1). Presentation (3 hr) LO1 LO2 LO3 LO4 LO5 LO6
Week 12 1. Group project presentations (Week 2). Presentation (3 hr) LO1 LO2 LO3 LO4 LO5 LO6

Attendance and class requirements

Lecture recordings: All lectures are recorded and will be available within the Canvas for student use. Please note the Business School does not own the system and cannot guarantee that the system will operate or that every class will be recorded. Students should ensure they attend and participate in all classes.

Study commitment

Typically, there is a minimum expectation of 1.5-2 hours of student effort per week per credit point for units of study offered over a full semester. For a 6 credit point unit, this equates to roughly 120-150 hours of student effort in total.

Required readings

All readings for this unit can be accessed through the Library eReserve, available on Canvas.

  • Foundations of Financial Risk: An Overview of Financial Risk and Risk based Financial Regulation, 2nd Edition, Wiley Finance Series, 2015 GARP (Global Association of Risk Professionals), Richard Apostolik, Christopher Donohue.
  • Risk Management and Financial Institutions 5th Edition Joan C. Hull 5th Edition.

 

Learning outcomes are what students know, understand and are able to do on completion of a unit of study. They are aligned with the University's graduate qualities and are assessed as part of the curriculum.

At the completion of this unit, you should be able to:

  • LO1. discuss and explain rationales for the regulation and supervision of banks and other financial institutions as well as appreciate why such regulatory/supervisory efforts need to be undertaken within a global context
  • LO2. recognise the principal sources of bank risks that are of concern to regulatory authorities and supervisory bodies and defend how effective management of these risks is central to the performance,solvency and viability of banks and financial institutions
  • LO3. explain and comprehend banks’ current market risk, credit risk, operational risk, liquidity risk, measurement, modelling and management practices as well as current regulatory/supervisory perspectives on the effective management and supervision of such risks
  • LO4. explain and comprehend banks’ current credit risk measurement, modelling and management practices as well as current regulatory/supervisory perspectives on the effective management of credit risk
  • LO5. recognise and describe the core principles of effective banking supervision as well as how such principles can be applied in any assessment of a country’s supervisory and regulatory regime
  • LO6. explain and understand the role of capital adequacy requirements as well as be familiar with the main features of the regulatory requirements set by the Bank of International Settlements in its capital accords.

Graduate qualities

The graduate qualities are the qualities and skills that all University of Sydney graduates must demonstrate on successful completion of an award course. As a future Sydney graduate, the set of qualities have been designed to equip you for the contemporary world.

GQ1 Depth of disciplinary expertise

Deep disciplinary expertise is the ability to integrate and rigorously apply knowledge, understanding and skills of a recognised discipline defined by scholarly activity, as well as familiarity with evolving practice of the discipline.

GQ2 Critical thinking and problem solving

Critical thinking and problem solving are the questioning of ideas, evidence and assumptions in order to propose and evaluate hypotheses or alternative arguments before formulating a conclusion or a solution to an identified problem.

GQ3 Oral and written communication

Effective communication, in both oral and written form, is the clear exchange of meaning in a manner that is appropriate to audience and context.

GQ4 Information and digital literacy

Information and digital literacy is the ability to locate, interpret, evaluate, manage, adapt, integrate, create and convey information using appropriate resources, tools and strategies.

GQ5 Inventiveness

Generating novel ideas and solutions.

GQ6 Cultural competence

Cultural Competence is the ability to actively, ethically, respectfully, and successfully engage across and between cultures. In the Australian context, this includes and celebrates Aboriginal and Torres Strait Islander cultures, knowledge systems, and a mature understanding of contemporary issues.

GQ7 Interdisciplinary effectiveness

Interdisciplinary effectiveness is the integration and synthesis of multiple viewpoints and practices, working effectively across disciplinary boundaries.

GQ8 Integrated professional, ethical, and personal identity

An integrated professional, ethical and personal identity is understanding the interaction between one’s personal and professional selves in an ethical context.

GQ9 Influence

Engaging others in a process, idea or vision.

Outcome map

Learning outcomes Graduate qualities
GQ1 GQ2 GQ3 GQ4 GQ5 GQ6 GQ7 GQ8 GQ9

This section outlines changes made to this unit following staff and student reviews.

There have been several changes in both the content and delivery since this course was last offered.

Disclaimer

The University reserves the right to amend units of study or no longer offer certain units, including where there are low enrolment numbers.

To help you understand common terms that we use at the University, we offer an online glossary.