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| Banking and the Financial Services Industry | |
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| Credit Crisis of 2007-2009 | |
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| Impact on Banks and the Banking Environment | |
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| How Do Banks Differ? Trends in the Structure of U.S | |
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| Banks | |
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| Organizational Structure and Financial Services Business Models | |
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| S-Corporation Banks | |
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| Financial Services Business Models | |
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| Transactions Banking versus Relationship Business Models | |
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| Universal Banking | |
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| Different Channels for Delivering Banking Services | |
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| Branch Banking | |
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| Automated Teller Machines | |
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| Internet (Online) Banking | |
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| Call Centers | |
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| Mobile Banking | |
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| Government Policies and Regulation | |
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| Historical Bank Regulation | |
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| Products and Services | |
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| Goals and Functions of Depository Institution Regulation | |
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| Ensure Safety and Soundness and Provide an Efficient and Competitive System | |
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| Supervision and Examination | |
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| New Charters | |
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| Federal Deposit Insurance | |
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| Product Restrictions: Depository Institutions versus Nondepository Institutions | |
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| Shortcomings of Restrictive Bank Regulation | |
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| Maintaining Monetary Stability and the Integrity of the Payments System | |
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| The Role of the Central Bank in the Economy: The Federal Reserve System | |
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| Monetary Policy | |
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| The Federal Reserve's Crisis Management Tools | |
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| The Role of Depository Institutions in the Economy | |
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| Efficient and Competitive Financial System | |
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| Consumer Protection | |
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| Trends in Federal Legislation and Regulation | |
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| Key Federal Legislation: 1970-1993 | |
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| Key Federal Legislation: 1994-2000 | |
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| Key Federal Legislation: 2001-2006 | |
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| Key Federal Legislation: 2007-2008 | |
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| Current Unresolved Regulatory Issues | |
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| Capital Adequacy | |
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| Regulatory Reform | |
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| Analyzing Bank Performance | |
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| Commercial Bank Financial Statements | |
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| The Balance Sheet | |
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| The Income Statement | |
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| The Relationship Between the Balance Sheet and Income Statement | |
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| The Return on Equity Model | |
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| Profitability Analysis | |
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| Expense Ratio and Asset Utilization | |
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| Managing Risk and Returns | |
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| Credit Risk | |
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| Liquidity Risk | |
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| Market Risk | |
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| Operational Risk | |
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| Legal and Reputation Risk | |
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| Capital or Solvency Risk | |
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| Off-Balance Sheet Risk | |
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| Evaluating Bank Performance: An Application | |
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| Profitability Analysis for PNC in 2007 | |
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| Risk Analysis for PNC in 2007 | |
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| PNC's Profitability versus Risk: 2003-2007 | |
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| Maximizing the Market Value of Bank Equity | |
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| Camels Ratings | |
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| Performance Characteristics of Banks by Size | |
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| Financial Statement Manipulation | |
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| Off-Balance Sheet Activities | |
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| Managing Noninterest Income and Noninterest Expense | |
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| Noninterest Income | |
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| Deposit Service Fees | |
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| Noninterest Expense | |
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| Key Ratios | |
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| Which Lines of Business and Customers are Profitable? Line-Of-Business Profitability Analysis | |
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| Customer Profitability Analysis | |
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| Aggregate Profitability Results from Customer Profitability Analysis | |
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| What is the Appropriate Business Mix? Strategies for Managing Noninterest Expense | |
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| Cost Management Strategies | |
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| Revenue Enhancement | |
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| Contribution Growth | |
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| The Performance of Nontraditional Banking Companies | |
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| The Financial Performance of Goldman Sachs | |
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| Goldman Sachs's Income Statement | |
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| Goldman Sachs's Balance Sheet | |
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| Key Performance Ratios | |
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| Risks Faced by Goldman Sachs | |
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| Goldman's Risk Profile | |
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| The Financial Performance of Mutual of Omaha Bank | |
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| Mutual of Omaha Bank's Risk Profile | |
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| The Financial Performance of BMW Financial Services and BMW Bank of North America | |
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| BMW Bank's Risk Profile | |
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| Pricing Fixed-Income Securities | |
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| The Mathematics of Interest Rates | |
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| Future Value and Present Value: Single Payment | |
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| Future Value and Present Value: Multiple Payments | |
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| The Relationship Between Interest Rates and Option-Free Bond Prices | |
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| The Size of Coupon Influences Bond Price Sensitivity | |
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| Duration and Price Volatility | |
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| Duration as an Elasticity Measure | |
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| Measuring Duration | |
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| Duration of a Zero Coupon Bond | |
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| Comparative Price Sensitivity | |
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| Recent Innovations in the Valuation of Fixed-Income Securities and Total Return Analysis | |
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| Total Return Analysis | |
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| Valuing Bonds as a Package of Cash Flows | |
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| Money Market Yields | |
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| Interest-Bearing Loans with Maturities of One Year or Less | |
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| 360-Day versus 365-Day Yields | |
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| Discount Yields | |
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| Yields on Single-Payment, Interest-Bearing Securities | |
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| Managing Interest Rate Risk: GAP and Earnings Sensitivity | |
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| Measuring Interest Rate Risk with GAP | |
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| Traditional Static GAP Analysis | |
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| What Determines Rate Sensitivity? Factors Affecting Net Interest Income | |
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| Rate, Volume, and Mix Analysis | |
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| Rate Sensitivity Reports | |
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| Strengths and Weaknesses of Static GAP Analysis | |
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| Earnings Sensitivity Analysis | |
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| Exercise of Embedded Options in Assets and Liabilities | |
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| Different Interest Rates Change by Different Amounts at Different Times | |
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| Earnings Sensitivity Analysis: An Example | |
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| Income Statement GAP | |
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| Managing the GAP and Earnings Sensitivity Risk | |
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| Managing Interest Rate Risk: Economic Value of Equity | |
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| Measuring Interest Rate Risk with Duration Gap | |
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| Duration, Modified Duration, and Effective Duration | |
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| Duration Gap Model | |
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| A Duration Application for Banks | |
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| Economic Value of Equity Sensitivity Analysis | |
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| EVE Sensitivity Analysis: An Example | |
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| Earnings Sensitivity Analysis versus EVE Sensitivity Analysis: Which Model Is Better? Strengths and Weaknesses: DGAP and EVE Sensitivity Analysis | |
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| A Critique of Strategies for Managing Earnings and Economic Value of Equity Sensitivity | |
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| GAP and DGAP Management Strategies: What Are Your Bets? Interest Risk Management: An Example | |
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| Yield Curve Strategies | |
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| Using Derivatives to Manage Interest Rate Risk | |
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| Characteristics of Financial Futures | |
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| A Brief Example | |
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| Types of Futures Traders | |
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| The Mechanics of Futures Trading | |
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| An Example: 90-Day Eurodollar Time Deposit Futures | |
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| Expectations Embedded in Futures Rates | |
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| Daily Marking-to-Market | |
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| Speculation versus Hedging | |
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| Speculators Take On Risk to Earn Speculative Profits | |
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| Hedgers Take Positions to Avoid or Reduce Risk | |
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| A Long Hedge: Reduce Risk Associated with a Decrease in Interest Rates | |
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| A Short Hedge: Reduce Risk Associated with an Increase in Interest Rates | |
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| Change in the Basis | |
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| Basis Risk and Cross Hedging | |
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| Microhedging Applications | |
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| Creating a Synthetic Liability with a Short Hedge | |
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| The Mechanics of Applying a Microhedge | |
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| Macrohedging Applications | |
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| Hedging: GAP or Earnings Sensitivity | |
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| Hedging: Duration Gap and EVE Sensitivity | |
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| Accounting Requirements and Tax Implications | |
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| Using Forward Rate Agreements to Manage Rate Risk | |
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| Forward Rate Agreements: An Example | |
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| Potential Problems with FRAs | |
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| Basic Interest Rate Swaps as a Risk Management Tool | |
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| Characteristics | |
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| Interest Rate Caps and Floors | |
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| Buying an Interest Rate Cap | |
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| Buying an Interest Rate Floor | |
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| Interest Rate Collar and Reverse Collar | |
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| Protecting Against Falling Interest Rates | |
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| Strategy: Use a Basic Interest Rate Swap; Pay Floating and Receive Fixed | |
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| Strategy: Buy a Floor on the Floating Rate | |
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| Strategy: Buy a Reverse Collar; Sell a Cap and Buy a Floor on the Floating Rate | |
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| Protecting Against Rising Interest Rates | |
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| Strategy: Use a Basic Interest Rate Swap; Pay Fixed and Receive Floating | |
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| Strategy: Buy a Cap on the Floating Rate | |
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| Strategy: Buy a Collar | |
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| Funding the Bank | |
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| The Relationship Between Liquidity Requirements, Cash, and Funding Sources | |
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| Recent Trends in Bank Funding Sources | |
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| Characteristics of Retail-Type Deposits | |
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| Transactions Accounts | |
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| Nontransactional Accounts | |
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| Estimating the Cost of Deposit Accounts | |
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| Calculating the Average Net Cost of Deposit Accounts | |
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| Characteristics of Large Wholesale Liabilities | |
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| Jumbo CDs (CDs) | |
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| Individual Retirement Accounts | |
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| Foreign Office Deposits | |
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| Borrowing Immediately Available Funds | |
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| Borrowing from the Federal Reserve | |
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| Other Borrowing from the Federal Reserve | |
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| Federal Home Loan Bank Advances | |
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| Electronic Money | |
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| Check 21 Measuring the Cost of Funds | |
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| The Average Historical Cost of Funds | |
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| The Marginal Cost of Funds | |
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| Costs of Independent Sources of Funds | |
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| Weighted Marginal Cost of Total Funds | |
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| Marginal Cost Analysis: An Application | |
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| Funding Sources and Banking Risks | |
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| Funding Sources: Liquidity Risk | |
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| Funding Sources: Interest Rate Risk | |
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| Funding Sources: Credit and Capital Risk | |
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| Managing Liquidity | |
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| Meeting Liquidity Needs | |
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| Holding Liquid Assets | |
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| Borrowing Liquid Assets | |
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| Objectives of Cash Management | |
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| Reserve Balances at the Federal Reserve Bank | |
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| Required Reserves and Monetary Policy | |
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| The Impact of Sweep Accounts on Required Reserve Balances | |
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| Meeting Legal Reserve Requirements | |
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| Historical Problems with Reserve Requirements | |
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| Lagged Reserve Accounting | |
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| An Application: Reserve Calculation Under LRA | |
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| Correspondent Banking Services | |
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| Liquidity Planning | |
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| Short-Term Liquidity Planning | |
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| Managing Float | |
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| Liquidity versus Profitability | |
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| The Relationship Between Liquidity, Credit Risk, and Interest Rate Risk | |
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| Traditional Aggregate Measures of Liquidity Risk | |
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| Asset Liquidity Measures | |
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| Liability Liquidity Measures | |
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| Longer-Term Liquidity Planning | |
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| Contingency Plans | |
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| Considerations in the Selection of Liquidity Sources | |
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| The Effective Use of Capital | |
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| Why Worry about Bank Capital? Risk-Based Capital Standards | |
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| The 1986 Basel Agreement | |
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| Risk-Based Elements of Basel I | |
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| What Constitutes Bank Capital? Tier 3 Capital Requirements for Market Risk under Basel I | |
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| Basel II Capital Standards | |
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| Weaknesses of the Risk-Based Capital Standards | |
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| What is the Function of Bank Capital? How Much Capital is Adequate? The Effect of Capital Requirements on Bank Operating Policies | |
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| Limiting Asset Growth | |
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| Changing the Capital Mix | |
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| Changing Asset Composition | |
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| Pricing Policies | |
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| Shrinking the Bank | |
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| Characteristics of External Capital Sources | |
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| Subordinated Debt | |
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| Common Stock | |
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| Preferred Stock | |
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| Trust preferred Stock | |
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| TARP Capital Purchase Program | |
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| Leasing Arrangements | |
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| Capital Planning | |
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| Applications | |
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| Depository Institution Capital Standards | |
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| Federal Deposit Insurance | |
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| FDIC Insurance Assessment Rates | |
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| Problems with Deposit Insurance | |
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| Weakness of the Current Risk-Based Deposit Insurance System | |
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| Overview of Credit Policy and Loan Characteristics | |
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| Recent Trends in Loan Growth and Quality | |
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| Measuring Aggregate Asset Quality | |