FINS5530 Financial Institution Management - 2020

Term 3
6 Units of Credit
Banking & Finance
This course outline is for the current semester. To view outlines from other years and/or semesters, visit the archives

1. Course Details

Summary of Course

The application of modern finance theory and financial modelling techniques to financial decision-making and risk management in financial institutions. Includes: (i) Uniqueness of financial institutions; (ii) Application of portfolio, arbitrage pricing, option pricing and corporate finance theories to the management of assets, liabilities, capital structure and off-balance sheet operations; (iii) Interest rate risk management and financial futures; (iv) Liquidity risk management; (v) Loan portfolio management, credit evaluation models, loan pricing and credit rationing; (vi) Capital adequacy and prudential regulation and management.

Teaching Times and Locations

Please note that teaching times and locations are subject to change. Students are strongly advised to refer to the Class Timetable website for the most up-to-date teaching times and locations.

View course timetable

Course Policies & Support

Course Aims and Relationship to Other Courses

The course provides a cornerstone to many of the other courses offered in the School of Banking and Finance. It builds on the basics of capital markets functions introduced in FINS5512 Financial Institutions and Markets. The course also prepares students who wish to study risk management oriented courses such as FINS5550 International Banking Management, FINS5531 Risk and Insurance and FINS5534 Strategic Management of Credit Risk and Loan Policy. Students wishing to study international finance will also find the course highly instructive.

2. Staff Contact Details

Position Title Name Email Location Phone Consultation Times
Lecturer-in-chargeProfJerry T. ParwadaRoom 317, UNSW Business School building - Ref E12 +61 2 9385 7936 TBC
LecturerMsXueting ZhangUNSW Business School building - Ref E12

A course chat site will be available on Moodle for students to post questions about the course. Weekly live online sessions will be available for direct interaction with the lecturers. Ad-hoc consultation sessions, e.g. exam prep sessions will also be set up (see Moodle course site for details). Students may also email their questions directly to lecturers.

3. Learning and Teaching Activities

Approach to Learning and Teaching in the Course

​This is a fully online course. Independent learning from students is expected. The course will draw on concepts, issues and practical information from the textbook, a hands-on bank management simulation, academic and financial press articles, as well as websites of relevant financial services regulators. Students are therefore required to read and understand these materials and their relevance. Students are also expected to extend and apply their knowledge acquired in the lecture to current issues discussed in the financial press. A large part of the course is quantitative in nature, which reflects the skills required to work in today banking and other financial services environments. In-class (online) discussion sessions are designed so that students can practice their problem-solving skills and receive appropriate feedback. It is essential that students utilise these discussion times to actively participate in the discussion of prescribed questions and raise questions with lecturers regarding areas where further reviews are necessary.

Learning Activities and Teaching Strategies

The course consists of sessions delivered each week through a combination of recorded lectures, discussion materials, bank simulation, and live sessions with the lecturer. These sessions will complement the compulsory text and other readings for the course by (1) outlining the main issues relevant to the topic, (2) reinforcing the analytical material in the required readings, (3) introducing relevant material not adequately covered in the text, and (4) drawing on recent developments in financial system markets both in Australia and globally. The course also involves an online bank simulation where participants, usually working in teams, input a range of decisions on running a bank. After each lecture/bank simulation exercise, students will be given a list of discussion questions from the lecture and are required to attempt to answer the prescribed discussion questions and to join the online discussion session moderated by the lecturer and a teaching assistant.

5. Course Resources

​The prescribed textbook for this course is:

Title:       Financial Institutions Management A Risk Management Approach4e
Author:       Lange , Saunders and Millon Cornett
Publisher:       MCGRAW-HILL     Edition:  4e15
APN:       9781743073551 or ISBN(1743073550)

Students are also free to use alternative versions of the text, e.g.:

Title:  Financial Institutions Management 9e A Risk Management Approach
Author:  Saunders & Cornett
Publisher:  MCGRAW-HILL
Edition:  9e17
APN:  9781259717772 or ISBN(1259717771)

ProBanker is competitive simulation game designed to enhance a student’s understanding of the financial aspects of managing a financial institution. ProBanker’s major decision areas include asset and liability pricing, bond portfolio management, liability management, capital structure and credit quality. It is firmly grounded in sound financial and microeconomic principles and the simulated environment, although complex and realistic, is sufficiently stylized to be readily understood. Students are forced to use balance sheet and income information about their own and their competitors’ firms to infer the magnitude of their prior decisions and competitive responses, provide regular quarterly inputs as a team, and learn by experience the nuances in term structure forecasting, interest rate risk measurement and control, liquidity management and balance sheet management. Overall, the game should be a fun addition that will substantially enhance the principles and tools learnt for this class.

ProBanker-specific resources to be accessed by students free of charge (details to be provided to enrolled students):

Principles of Bank Management: A Textbook to Accompany Probanker by Mark D. Flood and Anoop Rai

ProBanker Simulation by Mark Flannery and Mark D. Flood.

Other resources available on Blackboard (access through myunsw portal) may include:

o Links to recorded streaming audio lectures and other supporting materials

o Lecture notes and additional reference articles

o Important notices, a message board and other forms of communication

6. Course Evaluation & Development

Feedback is regularly sought from students and continual improvements are made based on this feedback. At the end of this course, you will be asked to complete the myExperience survey, which provides a key source of student evaluative feedback. Your input into this quality enhancement process is extremely valuable in assisting us to meet the needs of our students and provide an effective and enriching learning experience. The results of all surveys are carefully considered and do lead to action towards enhancing educational quality.

Past student feedback via direct comments to the lecturer suggested that some students were not prepared for the self-study mode of the course. The course remains fully online, but voluntary consultation chats will be scheduled. Students are reminded that completing this course satisfactorily requires a fully time commitment equivalent to devoting 10-15 hours of study per lecture. As well, such application should ideally be consistent from the very beginning. In order to cope with the short summer term, all lecture materials will be made available in advance of commencement of the formal teaching period. Students are encouraged to study as much of these materials as possible in advance of lectures.

7. Course Schedule

Note: for more information on the UNSW academic calendar and key dates including study period, exam, supplementary exam and result release, please visit:
Week Activity Topic Assessment/Other
Week 1: 14 SeptemberLecture 1

Specialness of FIs Depository Institutions

Introduction to ProBanker

Chapters 1 & 2 (Saunders 4e text)

Chapters 1, 2 & 3 (ProBanker text)

Week 2: 21 SeptemberLecture 2

Other FIs Intermediation Risk

Introduction to Bank Financials

Chapters 3 & 4 (Saunders 4e text)

Chapters 4 & 5 (ProBanker text)

Complete Bank Simulation autosim(s) as assigned (not graded)

Week 3: 28 SeptemberLecture 3

Interest Rate Risk 1

Chapters 5 & 6 (Saunders 4e text)

Optional Reading - Chapters 10 & 11 (ProBanker Text)

Quiz 1 (online; incorporating MCQs and Bank Simulation questions)

Simulation Groups of 4 formed

Week 4: 05 OctoberLecture 4

Interest Rate Risk 2


Chapters 7 & 8 (Saunders 4e text)

Optional Reading - Chapters 10 & 11 (ProBanker Text)

Complete Bank Simulation autosim(s) as assigned (not graded)

ProBanker Competitive Game Trial Runs

Quiz 1 feedback

NB: upcoming Census date - 11 October 2020

Week 5: 12 OctoberLecture 5

Market Risk / Credit Risk 1

Chapters 9 & 10 (Saunders 4e text)

Optional Reading - Chapters 12 & 13 (ProBanker Text)

ProBanker Decision Qtr 1 Due

Week 6: 19 OctoberLecture 6

Credit Risk 2

Chapter 11 (Saunders 4e text)

Optional Reading - Chapters 12 & 13 (ProBanker Text)

Week 7: 26 OctoberLecture 7

Sovereign Risk & Foreign Exchange Risk

Chapters 12 & 13 (Saunders 4e text)

ProBanker Decisions Due: Qtr 2

Week 8: 02 NovemberLecture 8

Liquidity Risk

Chapter 14 (Saunders 4e text)

Week 9: 09 NovemberLecture 9

Liability & Liquidity Management

Introduction to Bank Capital Management (ProBanker)

Chapter 15 (Saunders 4e text)

Optional Reading - Chapters 7 & 9 (ProBanker text)

ProBanker Decisions Due: Qtr 3 & Qtr 4

Week 10: 16 NovemberLecture 10

OBS Activities and Operational

Risks Capital Adequacy

Chapters 16 & 17 (Saunders 4e text)

Chapter 18 (Saunders 4e text)

ProBanker Performance Review

ProBanker Peer Assessment Form due

Week 11: 23 NovemberStudy Period
Week 12: 30 NovemberExams
Week 13: 07 DecemberExams

8. Policies and Support

Information about UNSW Business School protocols, University policies, student responsibilities and education quality and support.

Program Learning Outcomes

The Business School places knowledge and capabilities at the core of its curriculum via seven Program Learning Outcomes (PLOs). These PLOs are systematically embedded and developed across the duration of all coursework programs in the Business School.

PLOs embody the knowledge, skills and capabilities that are taught, practised and assessed within each Business School program. They articulate what you should know and be able to do upon successful completion of your degree.

Upon graduation, you should have a high level of specialised business knowledge and capacity for responsible business thinking, underpinned by ethical professional practice. You should be able to harness, manage and communicate business information effectively and work collaboratively with others. You should be an experienced problem-solver and critical thinker, with a global perspective, cultural competence and the potential for innovative leadership.

All UNSW programs and courses are designed to assess the attainment of program and/or course level learning outcomes, as required by the UNSW Assessment Design Procedure. It is important that you become familiar with the Business School PLOs, as they constitute the framework which informs and shapes the components and assessments of the courses within your program of study.

PLO 1: Business knowledge

Students will make informed and effective selection and application of knowledge in a discipline or profession, in the contexts of local and global business.

PLO 2: Problem solving

Students will define and address business problems, and propose effective evidence-based solutions, through the application of rigorous analysis and critical thinking.

PLO 3: Business communication

Students will harness, manage and communicate business information effectively using multiple forms of communication across different channels.

PLO 4: Teamwork

Students will interact and collaborate effectively with others to achieve a common business purpose or fulfil a common business project, and reflect critically on the process and the outcomes.

PLO 5: Responsible business practice

Students will develop and be committed to responsible business thinking and approaches, which are underpinned by ethical professional practice and sustainability considerations.

PLO 6: Global and cultural competence

Students will be aware of business systems in the wider world and actively committed to recognise and respect the cultural norms, beliefs and values of others, and will apply this knowledge to interact, communicate and work effectively in diverse environments.

PLO 7: Leadership development

Students will develop the capacity to take initiative, encourage forward thinking and bring about innovation, while effectively influencing others to achieve desired results.

These PLOs relate to undergraduate and postgraduate coursework programs.  Separate PLOs for honours and postgraduate research programs are included under 'Related Documents'.

Business School course outlines provide detailed information for students on how the course learning outcomes, learning activities, and assessment/s contribute to the development of Program Learning Outcomes.



UNSW Graduate Capabilities

The Business School PLOs also incorporate UNSW graduate capabilities, a set of generic abilities and skills that all students are expected to achieve by graduation. These capabilities articulate the University’s institutional values, as well as future employer expectations.

UNSW Graduate CapabilitiesBusiness School PLOs
Scholars capable of independent and collaborative enquiry, rigorous in their analysis, critique and reflection, and able to innovate by applying their knowledge and skills to the solution of novel as well as routine problems.
  • PLO 1: Business knowledge
  • PLO 2: Problem solving
  • PLO 3: Business communication
  • PLO 4: Teamwork
  • PLO 7: Leadership development

Entrepreneurial leaders capable of initiating and embracing innovation and change, as well as engaging and enabling others to contribute to change
  • PLO 1: Business knowledge
  • PLO 2: Problem solving
  • PLO 3: Business communication
  • PLO 4: Teamwork
  • PLO 6: Global and cultural competence
  • PLO 7: Leadership development

Professionals capable of ethical, self-directed practice and independent lifelong learning
  • PLO 1: Business knowledge
  • PLO 2: Problem solving
  • PLO 3: Business communication
  • PLO 5: Responsible business practice

Global citizens who are culturally adept and capable of respecting diversity and acting in a socially just and responsible way.
  • PLO 1: Business knowledge
  • PLO 2: Problem solving
  • PLO 3: Business communication
  • PLO 4: Teamwork
  • PLO 5: Responsible business practice
  • PLO 6: Global and cultural competence

While our programs are designed to provide coverage of all PLOs and graduate capabilities, they also provide you with a great deal of choice and flexibility.  The Business School strongly advises you to choose a range of courses that assist your development against the seven PLOs and four graduate capabilities, and to keep a record of your achievements as part of your portfolio. You can use a portfolio as evidence in employment applications as well as a reference for work or further study. For support with selecting your courses contact the UNSW Business School Student Centre.

Academic Integrity and Plagiarism

Academic Integrity is honest and responsible scholarship. This form of ethical scholarship is highly valued at UNSW. Terms like Academic Integrity, misconduct, referencing, conventions, plagiarism, academic practices, citations and evidence based learning are all considered basic concepts that successful university students understand. Learning how to communicate original ideas, refer sources, work independently, and report results accurately and honestly are skills that you will be able to carry beyond your studies.

The definition of academic misconduct is broad. It covers practices such as cheating, copying and using another person’s work without appropriate acknowledgement. Incidents of academic misconduct may have serious consequences for students.


UNSW regards plagiarism as a form of academic misconduct. UNSW has very strict rules regarding plagiarism. Plagiarism at UNSW is using the words or ideas of others and passing them off as your own. All Schools in the Business School have a Student Ethics Officer who will investigate incidents of plagiarism and may result in a student’s name being placed on the Plagiarism and Student Misconduct Registers.

Below are examples of plagiarism including self-plagiarism:

Copying: Using the same or very similar words to the original text or idea without acknowledging the source or using quotation marks. This includes copying materials, ideas or concepts from a book, article, report or other written document, presentation, composition, artwork, design, drawing, circuitry, computer program or software, website, internet, other electronic resource, or another person's assignment, without appropriate acknowledgement of authorship.

Inappropriate Paraphrasing: Changing a few words and phrases while mostly retaining the original structure and/or progression of ideas of the original, and information without acknowledgement. This also applies in presentations where someone paraphrases another’s ideas or words without credit and to piecing together quotes and paraphrases into a new whole, without appropriate referencing.

Collusion: Presenting work as independent work when it has been produced in whole or part in collusion with other people. Collusion includes:

  • Students providing their work to another student before the due date, or for the purpose of them plagiarising at any time
  • Paying another person to perform an academic task and passing it off as your own
  • Stealing or acquiring another person’s academic work and copying it
  • Offering to complete another person’s work or seeking payment for completing academic work

Collusion should not be confused with academic collaboration (i.e., shared contribution towards a group task).

Inappropriate Citation: Citing sources which have not been read, without acknowledging the 'secondary' source from which knowledge of them has been obtained.

Self-Plagiarism: ‘Self-plagiarism’ occurs where an author republishes their own previously written work and presents it as new findings without referencing the earlier work, either in its entirety or partially. Self-plagiarism is also referred to as 'recycling', 'duplication', or 'multiple submissions of research findings' without disclosure. In the student context, self-plagiarism includes re-using parts of, or all of, a body of work that has already been submitted for assessment without proper citation.

To see if you understand plagiarism, do this short quiz:


The University also regards cheating as a form of academic misconduct. Cheating is knowingly submitting the work of others as their own and includes contract cheating (work produced by an external agent or third party that is submitted under the pretences of being a student’s original piece of work). Cheating is not acceptable at UNSW.

If you need to revise or clarify any terms associated with academic integrity you should explore the 'Working with Academic Integrity' self-paced lessons available at:

For UNSW policies, penalties, and information to help you avoid plagiarism see: as well as the guidelines in the online ELISE tutorials for all new UNSW students: For information on student conduct see:

For information on how to acknowledge your sources and reference correctly, see: If you are unsure what referencing style to use in this course, you should ask the lecturer in charge.

Student Responsibilities and Conduct

​Students are expected to be familiar with and adhere to university policies in relation to class attendance and general conduct and behaviour, including maintaining a safe, respectful environment; and to understand their obligations in relation to workload, assessment and keeping informed.

Information and policies on these topics can be found on the 'Managing your Program' website.


It is expected that you will spend at least ten to twelve hours per week studying for a course except for Summer Term courses which have a minimum weekly workload of twenty to twenty four hours. This time should be made up of reading, research, working on exercises and problems, online activities and attending classes. In periods where you need to complete assignments or prepare for examinations, the workload may be greater. Over-commitment has been a cause of failure for many students. You should take the required workload into account when planning how to balance study with employment and other activities.

We strongly encourage you to connect with your Moodle course websites in the first week of semester. Local and international research indicates that students who engage early and often with their course website are more likely to pass their course.

View more information on expected workload


Your regular and punctual attendance at lectures and seminars or in online learning activities is expected in this course. The Business School reserves the right to refuse final assessment to those students who attend less than 80% of scheduled classes where attendance and participation is required as part of the learning process (e.g., tutorials, flipped classroom sessions, seminars, labs, etc.).

View more information on attendance

General Conduct and Behaviour

You are expected to conduct yourself with consideration and respect for the needs of your fellow students and teaching staff. Conduct which unduly disrupts or interferes with a class, such as ringing or talking on mobile phones, is not acceptable and students may be asked to leave the class.

View more information on student conduct

Health and Safety

UNSW Policy requires each person to work safely and responsibly, in order to avoid personal injury and to protect the safety of others.

View more information on Health and Safety

Keeping Informed

You should take note of all announcements made in lectures, tutorials or on the course web site. From time to time, the University will send important announcements to your university e-mail address without providing you with a paper copy. You will be deemed to have received this information. It is also your responsibility to keep the University informed of all changes to your contact details.

Student Support and Resources

​The University and the Business School provide a wide range of support services and resources for students, including:

Business School EQS Consultation Program
The Consultation Program offers academic writing, literacy and numeracy consultations, study skills, exam preparation for Business students. Services include workshops, online resources, individual and group consultations. 
Level 1, Room 1035, Quadrangle Building.
02 9385 4508

Communication Resources
The Business School Communication and Academic Support programs provide online modules, communication workshops and additional online resources to assist you in developing your academic writing.

Business School Student Centre
The Business School Student Centre provides advice and direction on all aspects of admission, enrolment and graduation.
Level 1, Room 1028 in the Quadrangle Building
02 9385 3189

UNSW Learning & Careers Hub
The UNSW Learning & Careers Hub provides academic skills and careers support services—including workshops, individual consultations and a range of online resources—for all UNSW students. See their website for details.
Lower Ground Floor, North Wing Chancellery Building.
02 9385 2060

Student Support Advisors
Student Support Advisors work with all students to promote the development of skills needed to succeed at university, whilst also providing personal support throughout the process.
John Goodsell Building, Ground Floor.
02 9385 4734

International Student Support
The International Student Experience Unit (ISEU) is the first point of contact for international students. ISEU staff are always here to help with personalised advice and information about all aspects of university life and life in Australia.
Advisors can support you with your student visa, health and wellbeing, making friends, accommodation and academic performance.
02 9385 4734

Equitable Learning Services
Equitable Learning Services (formerly Disability Support Services) is a free and confidential service that provides practical support to ensure that your health condition doesn't adversely affect your studies. Register with the service to receive educational adjustments.
Ground Floor, John Goodsell Building.
02 9385 4734

UNSW Counselling and Psychological Services
Provides support and services if you need help with your personal life, getting your academic life back on track or just want to know how to stay safe, including free, confidential counselling.
Level 2, East Wing, Quadrangle Building.
02 9385 5418

Library services and facilities for students
The UNSW Library offers a range of collections, services and facilities both on-campus and online.
Main Library, F21.
02 9385 2650

Moodle eLearning Support
Moodle is the University’s learning management system. You should ensure that you log into Moodle regularly.
02 9385 3331

UNSW IT provides support and services for students such as password access, email services, wireless services and technical support.
UNSW Library Annexe (Ground floor).
02 9385 1333

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