This course facilitates an in-depth exploration of current issues in European banking in the aftermath of the global financial crisis of 2007–08 and is centered around Jean Dermine’s book on bank valuation and value-based management. We will explore current challenges by analyzing the financial crisis of 2007–08, including a detailed case study on the near failure and rescue of HRE, and the ensuing tightening in bank regulation.
A general framework for bank valuation provides the background for a discussion of value-based bank management, covering topics including the drivers of bank value and a detailed examination of deposit and loan pricing. The course concludes with an introduction to risk management in banking. Starting with a short introduction to financial systems and banking, covering the financial crisis, the Euro crisis, and the emergence of regulatory reforms through the Basel Framework, each session will focus on a distinct topic to allow for a comprehensive, yet focused and digestible discussion of the subject matter from both a micro and macro perspective.
The course consists of lectures, class discussions, group assignments and case studies. Source materials will include a combination of authentic case studies, relevant chapters from the leading textbooks in the field, recent academic and industry research, publications from relevant institutions and pertinent news articles from the business press. Prior exposure to the banking sector is helpful but not a requirement. A high level of preparedness and participation, however, is essential to ensure that the course is a rewarding experience for all participants.