Banking, Economics and Finance MSc

• Professor Catarina Figueira

To introduce the concepts and techniques associated with Microeconomics (e.g. market structure, degree of competition, firm-level strategies including business objectives, pricing, etc).

• The initial few sessions are spent on discussion of the main concepts that serve the basis for the understanding of microeconomics and the business environment.
• There is extensive discussion about the properties associated with different market structures and levels of competition.
• You are then introduced to important elements regarding the interplay between management and the firm’s objectives and this is followed by a comprehensive discussion about business strategy that builds on what was previously delivered and, as a consequence, the investigation of economic implications for a firm.
• One important element of the corporate strategy relates to decisions about pricing, and this is discussed in great detail.
• Finally, the remaining sessions are devoted to discussion on how competition is evolving and the key drivers that have direct relevance to organisations.

On successful completion of this module you should be able to:

1. Employ economic reasoning when making choices in the use of resources.
2. Evaluate the importance of marginal analysis and diminishing returns in the context of business and consumer decisions.
3. Assess the various objectives which different firms may pursue and the consequent impact on managerial decisions, including those relating to price and output levels.
4. Analyse internal environment and capabilities of a firm and understand the forces shaping the firm’s competitive environment.
5. Critically evaluate the emerging trends and key drivers influencing the firm’s competitive landscape.

• Professor Andrew Angus

In the current competitive environment, it is vital that individuals are able to understand the relationships between different business variables in order to appreciate the risks associated with their actions. It is also important that they are able to forecast business trends and to optimise their business strategies, given the level of uncertainty and time constraints they continuously face.

This module aims to provide students with the ability to critically examine existing literature which can underpin the decision-making process and also to provide students with the skills to collect, process, analyse and present relevant data that will support their decisions. In addition, the module will also provide a platform which will help students engage with internal or external “clients”, undertake a project and, consequently, be able to make coherent and compelling recommendations.

The principles of management research:

• Research Strategies
• Research methodology
• Research designs
• Planning a management project and formulating management questions
• Using literature to inform the research processes.

The nature of quantitative analysis:

• Sampling
• Structured interviews and questionnaires
• Statistical analysis of data and probability theory
• Correlation and regression analysis
• Cluster analysis
• The nature of qualitative analysis:
• Ethnography and participant observation
• Semi-structured interviews and focus groups
• Mixed methods project: breaking down the quantitative/qualitative divide.

The analysis of business processes in the context of:

• Business analysis tools which enable the identification of specific opportunities aligned to strategic goals.

Consulting skills as pivotal in the success of a consulting project:

• Principles of building strong relationships with clients
• Key components on how to give advice
• Attitude(s) of an effective consultant
• Framing the issue(s)
• Envisioning an alternate reality
• Key stages in writing up a management project and presenting recommendations.

On successful completion of this module you should be able to:

1. Evaluation of appropriate quantitative and/or qualitative techniques for the analysis of business issues.
2. Appraise frameworks and analytical tools to structure analysis and recommendations which are supported by data in a consultancy engagement.
3. Critically appraise and use research evidence.
4. Manage effective internal and/or external “client” relationships.

• Dr Lakshmy Subramanian

The aims of this module are to equip you with the skills, techniques and knowledge to:

• To be proficient in bank risk management in the digital era, considering the several risk categories that result from the nature of banking, the emerging risks, and the consequences of these for the future of bank risk management.
• Developing appropriate mitigating strategies and applying a suitable control framework to monitor key risk areas.
• Gain an understanding of financial inclusion and how banks can play a critical role in advancing it.
• Examine the personal and private banking landscape in the digital age, considering the main change agents, the challenges that have been encountered, and the effects on banks and the ways customers interact with their banks.
• Grasp nuances of the dynamic lending environment, especially in a digital age, and evaluate how customers perception about lending is evolving.
• Evaluate strategic choices, formulate strategy, and oversee its implementation through effective leadership and operational management.

The core elements of the module are:

• Retail banking
• Private and personal banking
• Credit and lending
• Banking operations and strategies
• Financial inclusion
• Bank risk management and governance

On successful completion of this module you should be able to:

1. Evaluate the impact of current trends and factors on the types of risk to which banks are exposed.
2. Discuss the role of financial inclusion in modern banking.
3. Examine how retail banks can prepare in advance for the impact of external events and influences in offering high-quality, cost-effective services.
4. Differentiate between a range of lending customer types, needs, etc. and apply frameworks for enhanced relationship management strategy for a variety of bank customer segments.
5. Analyse a variety of strategic possibilities for a bank in light of environmental and organisational evaluations, and offer a bank strategy that supports the bank's purpose, vision, values, and objectives.

• Paul Richards

The course begins in Part I with an overview of the international financial markets, the major financial institution participants and product types. You will understand the roles, motivations and behaviours of market players including the importance of risk-taking. The role of regulation will be highlighted and examined in Part II. This will include the aims and structures of regulation. In Part III, you will examine, using a seminal textbook on business ethics the role and limitations of ethics in financial markets, ethical decision-making frameworks, and evaluate real world cases of lapses in culture and impact upon society and the markets. The challenge of identifying and promoting ethical behaviour will be acknowledged. 

• This module will identify key financial intermediaries including banks and non-banks (i.e., FinTech firms, finance companies, mutual banks, multilateral banks, insurers, pensions, hedge funds, retail investors, shadow banks).
• Financial products overview includes equity, subordinated debt (notably issued by financial institutions including their motivation), senior debt (including loans, bonds) as well as the role and consequences of deposit-taking/money market activities for financial institutions given the regulatory context of this module.
• The role, advantages and dis-advantages and recent market developments associated with cash versus derivative markets will be identified and discussed.  Lastly, simple securitisations of credit portfolios will be examined both as a funding tool but how it was misused before the crisis in sub-prime markets.
• Product types identified will include equity and debt (including loans and debt securities), investment banking/advisory, and asset/wealth management. Recent controversies will be looked at in market practice including the scope for market abuse, conflicts of interest, moral hazard, and financial institution misconduct.  Various stakeholders will be identified for the key market types.
• You will investigate criticisms of financial market policies and shortcomings of supervision and review the response by regulators, notably in the banking sector for greater capital, more conservative liquidity provisions, and improved risk governance. Key corporate governance theories will be identified. While regulation presents a legal means to mitigate misconduct by institutions and individuals operating in the financial markets, ethical decision-making and an effective risk culture can offer greater hope over time when conventional supervision and law fail to live up to their promise. Two ethical-decision making frameworks will be introduced in a case study format, one from Jennings (2013) and the other via Ferrell et al. (2011).

On successful completion of this module you should be able to:

1. Understand different financial market structures, players including their roles and respective stakeholders
2. Develop a basic knowledge of key financial markets, major product types, and the scope for misconduct, agency failures and moral hazard
3. Identify the aims, role and structures to provide financial markets supervision including their limitations and recent criticisms
4. Identify the key theories for corporate governance and risk governance practices for financial institutions, and how governance mechanism may interact to impact performance or risk-taking
5. Examine the potential for ethical behaviour and improved conduct to fill the void where law and regulations fail to succeed

The key objective for this course is that you develop a clear understanding of the basics of accounting.  By the end of the course, you will be able to interpret accounting information with confidence and use it to make decisions and be able to communicate accounting numbers to others.

• The course is split approximately 50/50 between Financial Accounting and Management Accounting.
• Financial Accounting covers the preparation and presentation of accounts by firms for outside parties such as shareholders or creditors.  
• Such preparation is governed by certain fundamental principles and various rules.  
• Over the first five sessions you will cover these principles and rules in order to understand how the key financial statements (income statement, balance sheet, cash flow statement) are prepared. 
• The module also covers the interpretation of financial statements.  This involves learning financial ratio analysis and interpreting the information contained in a full set of annual accounts.
• The last five sessions are devoted to Management Accounting that covers internal accounting by managers for planning and control.  
• You will cover the nature and classification of costs, break-even analysis, allocation of overheads; preparing and using budgets, variance analysis.

On successful completion of this module you should be able to:

1. Understand the fundamental principles of financial accounting.
2. Prepare key financial statements from basic information.
3. Analyse and interpret company accounts.
4. Classify different types of costs and conduct break even analysis.
5. Understand the different ways in which overheads can be allocated.
6. Prepare budgets and interpret variances from budget.
7. With this knowledge, be able to identify the financial information relevant to a wide range of business issues, using this information effectively for decision making, and also recognise the limitations of such information.

• Professor Constantinos Alexiou

The main aim of this module is to help tomorrow’s business leaders develop a deeper understanding of the impact of developments in the wider macroeconomic environment – at the national and international levels – on strategic planning and management.

A deep and critical understanding of the macroeconomy is essential to the formulation of effective corporate strategies particularly in the context of a rapidly changing and challenging global economic and business environment.

Business decisions are not taken in a vacuum. Arguably one of the most important influences on corporate leaders at the highest levels is their assessment of the external economic and business environment. Successful business leaders understand how key macroeconomic variables, such as economic growth, earnings, unemployment and inflation, are likely to impact on the markets their businesses serve. The traditional view is that the external environment is largely driven by domestic government fiscal and monetary policies. But increasingly it is external influences at the international level such as global trade and international capital flows that drive the world economy and force reactive policies from nation state governments – with direct and indirect consequences for strategic decisions by leadership in both the private and public sectors.

The module places particular emphasis on some of the latest developments and perspectives at the macroeconomy level that now dominate policies and business in an international context – including topics such as: the recent global financial crisis and the importance of global competition; international trade relationships; currency movements and business cycles. This module will provide an opportunity to discuss the causes and consequences of macroeconomic developments and policies, nationally and internationally, in order to deepen understanding of the consequences for governments, society and the corporate world.

The module is based on a number of core models and empirical research.

Throughout, the emphasis is on the “real world” – theory is included only as an aid to developing a deeper understanding of the practical problems and policy challenges in the context of strategy formulation and analysis of the forces driving change in the external business and economic environment.

The first set of sessions serves as a foundation, explaining: how economic activity is measured and interpreted; the main macroeconomic flows; what determines the level and changes in national income as well as the meaning of inflationary and deflationary gaps. The next group of sessions focuses on management of the domestic economy including fiscal policy, monetary policy, economic growth and supply-side policies. International aspects of the macroeconomy are then examined in detail covering: the balance of payments account, trade policy, exchange-rate regimes and the various exchange-rate policy choices available to countries. The final session brings together the core concepts and explains the causes of business cycles.

On successful completion of this module you should be able to:

1. Assess the importance and implications of national and international macroeconomic trends and forecasts as a basis for strategic decision-making by business leaders.
2. Critically analyse the drivers of economic activity at the national and international macroeconomic levels and the implications for economic growth.
3. Evaluate the goals (and conflicts) of macroeconomic management including sustainability of growth, low and stable inflation, a stable currency coupled with a “sustainable” international trade position and full employment.
4. Appraise the policy tools used by governments and central banks in their efforts to manage the economy including fiscal policy, monetary policy, supply-side policies, and trade and exchange rate policies.
5. Design an economic situational report for a country, an essential input for the strategic planning process by applying knowledge and practical skills.

• Professor Yacine Belghitar

The aim of the course is to equip you with effective financial tools and at the same time to develop students’ ability to evaluate and understand the reasons for resistance that the application of these tools may bring about from within the organisation and beyond. Handling such resistance requires awareness of the societal environment as well as leadership and management skills.

To achieve these goals we devote the first part of the course to linking the finance function to the overall objectives of the firm.

Another important challenge that the course tackles is linking the theoretical issues to be covered with real life management and practice. We aim to achieve that by integrating the following aspects into the course:

• Highlighting the practical application of theoretical financial models in the corporate context.
• Presenting evidence on financial related practices in the corporate world and how these practices link to the material discussed in class.
• Working through case studies to strengthen the link between practice and theory.
• Analysing articles in the financial media using concepts and theories discussed in class.

• Appraising capital investment projects
• Financing a business
• Corporate finance, including the cost of capital, sources of finance, capital structure and dividend policy
• Valuation

On successful completion of this module you should be able to:

1. Critically evaluate the financial function in the context of the objective of the firm.
2. Assess data for capital investment project appraisals and analyse the results, including the preparation and interpretation of cash forecasts.
3. Critically assess the relevant factors in key aspects of corporate financial management, such as borrowing and lending, and capital structure.
4. Apply valuation techniques, including estimating the cost of capital.

• Dr Lakshmy Subramanian

The aim of the module is to enable you to critically evaluate the rapidly changing field of digital technology including artificial intelligence as it applies to the worlds of banking and financial services more generally. This will be achieved through developing a critical understanding of:

• IT in historical perspective: from the 1970s to today
• Demand-side and supply-side drivers of digital banking
• Consumer Impact: where have we come from and how is the future of banking being shaped by new technology paradigms. Focus on customer experience, key trends that are driving this
• The new business models evolving in digital banking including Open Banking, BaaS, BaaP, Banking as a marketplace and ecosystem, etc.
• Organisation: what does the digital megatrend mean for how you organise internally? Skills sets are less delineated, agile ways of working etc.
• Future: what emerging trends promise the next wave of innovation (e.g. blockchain, AI)? What disruption is this likely to cause?

The module aims to equip you with the knowledge and understanding to better manage digital technology-related decision-making within a banking context.

The core elements of the module are:

• Digital disruption in banking and financial services: This part of the module will look at how new digital technologies are changing banks and financial services.
• Deeper dive on the dominant new technologies reshaping the industry: This part of the module looks in detail at the new technologies fast changing the banking industry so that students understand both what they are and also the strategic implications for the industry.
• Discussion on the role of regulations, central bank policies, and other related policies.
• Response strategies: This part of the module explores how banks can respond to the rise of digital technologies and the best strategies to compete with new Big Tech and FinTech.

On successful completion of this module you should be able to:

• Critically appraise the impact of new digital technologies including artificial intelligence on the operations of banking.
• Assess and reflect the impact of new market entrants on the business model and competitive position of traditional banks.
• Evaluate the key trends in alternative payment systems, and reflect on the key areas of growth by segments, geography, etc.
• Examine the key motivations for the development of cryptocurrencies and central bank digital currencies, and associated risks, regulatory implications, etc.
• Outline avenues of organizational development and change open to banks to respond to market changes brought about by digital technology.

• Professor Catarina Figueira

The module's primary goal is to increase your knowledge, comprehension, and aptitude for applying the fundamental ideas and practices of green and sustainable banking. The module will delve deeper into the development of green and sustainable products and services in the banking and allied sectors; raising awareness of the role of the stakeholders in the banking industry in supporting the transition to a low-carbon world; and increasing the student's awareness and understanding of climate change and its impacts.

The core elements of the module include:

• Introduction to sustainable and green banking
• Building a sustainable banking ecosystem including green finance, responsible lending, investments, etc.
• Risk management
• Implications of sustainable banking on digital banking, private banking, commercial banking, etc.
• Role of FinTech and AI in supporting sustainable and green banking.

On successful completion of this module you should be able to:

1. Critically analyse "green" and "sustainable" finance highlighting the fundamental theories underlying the climate change and examine how the banking sector could play a role in lessening the impact of climate change.
2. Assess the nature, significance, and management of the main environmental, sustainability, and climate risks.
3. Discuss how different banking products and services, activities, and strategies can support the development of sustainable and green finance.
4. Evaluate the role of digital financial technology in supporting sustainable banking.
5. Assess the challenges and gaps in the current reporting practices and propose pathways for sustainable financial reporting.