Course Description

This course is a sequel to FIN 4510, Bank Management, and will cover similar topics but in

greater depth and breadth. Integrated application of these topics will take place in a selection of

case studies, some of which will be analyzed in teams.

Prerequisites

FIN 4510 or permission of instructor.

Course Objective

The content of this course focuses on the management and regulation of commercial banks and

other depository institutions. The primary emphasis will be on the application of concepts and

analytical tools crucial to the decisions facing the managers of a contemporary bank. Areas

covered will include financial and portfolio management, managerial objectives in the context of financial intermediation, the market and regulatory environment defining the constraints within

which banks operate, and the tradeoffs between multiple dimensions of risk and various

components of returns. Current developments in the banking industry will be incorporated into the course material, including structural consolidation, financial innovation, competitive forces, and regulatory change, to equip students to deal effectively with these issues in subsequent career positions. The analysis of complex cases and other technical problem-solving exercises through the semester will give students a feel for the type of challenges encountered in a modern bank and for the questions confronting public policy makers in formulating bank regulatory programs.

Required Materials

1. Text: Timothy W. Koch and S. Scott MacDonald, Bank Management, Fifth Edition, Dryden Press, 2003.

2. Course Packets, available in the UW bookstore.

3. Handouts (e.g., lecture outlines, problem sets, additional reading materials). These will be announced and/or distributed in class.

Grading

The individual cases and associated homework assignments will contribute toward the overall semester grade as follows:

Item Percent of final grade

Case 1 16%

Case 2 15%

Case 3 15%

Case 4 16%

Case 5 19%

Case 6 19%

The grade for each case will be based on a combination of classroom participation and associated homework assignments. Students will receive letter grades based on the following scale. Individual case scores will not necessarily be curved. Midsemester and final grades may be curved depending on student performance, but the following distribution is guaranteed as a minimum:

Percent Grade

90+ A

80-89 B

70-79 C

60-69 D

<60 F

No extensions will be granted for this course. Late assignments will be docked as stated below. Any students who engage in academic dishonesty will be severely penalized according to university policy. Exceptionally active or inactive class participation, along with attendance, will be considered and may result in some additional adjustments (upward or downward) to your final grade.

Course Requirements

Cases. Six cases will be assigned during the semester. Reading assignments for each case will cover not only the actual case but also relevant material from other chapters in the text that will be identified in the course of the semester. Each case will involve active class discussion as well as several individual homework assignments. For the last two cases, team presentations will be graded on the basis of both oral and written presentations, and a common grade will be recorded for each member of a team except in rare instances where individual contributions can be clearly identified as being substantially above or below those of other members of the team. Assignments are due at the beginning of class on the due date and late assignments will be penalized as follows:

1. If full or partial solutions are discussed in class, or graded assignments are returned to other students, the assignment will not be accepted late and a score of zero will be recorded. Note that solutions may be discussed at the beginning of class on the due date.

2. If no solutions have been presented by the professor, the late assignment will be accepted subject to a 10 percent penalty each day it is late, including weekends. Assignments may also be docked if they are turned in after the beginning of class on the due date. If the professor is not available to receive late assignments, they must be turned in at the departmental office and stamped with the date.

3. No late assignments will be accepted after April 28th, 2005.

Academic Dishonesty:

UNIREG 802, Revision 2, defines academic dishonesty as “an act attempted or performed which

misrepresents one’s involvement in an academic task in any way, or permits another student to

misrepresent the latter’s involvement by assisting the misrepresentation.” Academic dishonesty

will not be tolerated in this class; any instances will be referred to the university’s established

procedure for judging such cases, with severe penalties assessed as found appropriate.

Group Work Guidelines:

All exams and cases in this class must be done individually, except Cases 5 and 6, which are group

projects.

Disclaimer:

Subsequent changes may be made to any aspect or detail of this Syllabus if and when necessary.

Any changes will be announced in class as soon as practical. In particular, because certain topics

may require more or less time than indicated on the schedule, or because guest speakers may be available only on particular days, the schedule of reading assignments is only approximate

and may be revised from time to time as announced in class by the professor.

SCHEDULE

Week Date Topics, Readings, and Assignments

1 1/11- Overview of course. Managing depository institutions in a regulated and rapidly

1/13 changing environment. Applying concepts and tools to realistic cases. Syllabus. Read Case 1: Southwest State Bank in packet. Discuss issues in Case 1 and identify relevant textbook chapters.

2 1/18-1/20 Case 1, cont’d.

3 1/25 Case 1, cont’d.

1/27 DUE: Prepare questions #1-13 on Case 1, to be handed in and discussed in class.

4 2/1 Case 2: Liberty National Bank. Read case in packet. Discuss issues and

2/3 identify relevant textbook chapters.

5 2/8-2/10 Case 2, continued.

6 2/15 DUE: Prepare problems #1 - 4 on Case 2, to be handed in and discussed in class.

2/17 Case 3: Galaxy National Bank. Read case in packet. Discuss issues and

identify relevant textbook chapters.

7 2/22-2/24 Case 3, continued.

8 3/1 DUE: Prepare problems #1 - 6 on Case 3, to be handed in and discussed in class.

3/3 Case 4: ALCO Meeting, Winterset Bancshares. Read case in packet. Discuss issues identify relevant textbook chapters.

9 3/8 Case 4, continued.

3/10 DUE: Prepare problems #1 - 7 on Case 4, to be handed in and discussed in class.

10 3/14-3/18 NO CLASS – Spring Break.

11 3/22 Case 5: Mercury Models, Inc. Read case in packet. Form teams to analyze

3/24 case. Discuss issues and identify relevant textbook chapters.

12 3/29-3/31 Issues in Case 5, continued.

13 4/5 Issues in Case 5, continued.

4/7 DUE: Team presentations (written and oral) on Case 5.

14 4/12 Team presentations (written and oral) on Case 5.

4/14 Guest Speaker (to be announced later).

15 4/19- Case 6: Armstrong Bookery. Read case in packet. Form teams to analyze case. 4/21 Discuss issues and identify relevant textbook chapters.

16 4/26 Issues in Case 6, continued.

4/28 DUE: Team presentations (written and oral) on Case 6.

5/2-5/6 Finals (no final in this class).

Notice