All programmes > Banking and Financial Markets: Introduction to Financial Models

Banking and Financial Markets: Introduction to Financial Models (B-KUL-D0H18A)

This is a translated version. Original version in Dutch.
6 ECTSDutch56 Second termCannot be taken as part of an examination contract
Smedts Kristien |  Mertens Celien (cooperator) |  Vanclooster Lore (cooperator)
OC Handelsingenieur en Handelsingenieur in de beleidsinformatica FEB Campus Leuven

Aims

This course consists of two educational activities: D0H18a Bank- en financiewezen and D0N12a Bank- en financiewezen: werkcollege.

Upon completing 'D0H18a Bank- en financiewezen’", the student can

Part 1

  • critically evaluate each interest rate product
  • design new interest rate products himself
  • model problems that can be solved with the techniques of interest charge

Part 2

  • make a first analysis of the financial states of a bank and draw conclusions on the state of the institution
  • indicate the most important classes of banking risks
  • argue substantially on the issue of balance between return and risk in a bank
  • perform simple simulations of the impact of choices in banking policy on balance and income and formulate an optimal choice
  • comment on and assess substantially the impact of shocks in the financial system on the profitability of a bank
  • estimate the interest rate risk on the basis of duration and control
  • understand the logic of the supervision and standards imposed on banks around the world
  • describe the Belgian supervisory framework in general terms
  • give an overview of the role of the various types of financial institutions and their main functions

Part 3

  • provide an overview of the role of the major financial markets and the main products that are traded
  • decompose financial products into their constituent elements and construct financial products through principles of financial engineering 
  • substantially comment and evaluate articles from the financial coverage of topics covered in this course

Upon completion of D0N12a Bank- en financiewezen: werkcollege’: the student can

  • realise the general objectives of the lecture using exercises and additional guidance
  • apply the theoretical concepts from the lectures in solving realistic cases and issues of banking and finance 

Previous knowledge

At the start of this course students are familiarized with a balance sheet and an income statement from any accounting.

 

Identical courses

This course is identical to the following courses:
D0E24A : Banking and Financial Markets
D0T10A : Banking and Financial Markets (TEW)
D0W35A : Banking and Financial Markets: Introduction to Financial Models (HIR)
D0W18A : Banking and Financial Markets (TEW)
HBN48B : Banking and Financial Markets: Introduction to Financial Models (No longer offered this academic year)

Is included in these courses of study

Activities

4.5 ects. Banking and Financial Markets: Introduction to Financial Models (B-KUL-D0H18a)

4.5 ECTSDutchFormat: Lecture46 Second term
Smedts Kristien
OC Handelsingenieur en Handelsingenieur in de beleidsinformatica FEB Campus Leuven

Content

A first part of the course deals with interest calculation and the way in which financial institutions deal with this in their development of financial products. More specifically, we discuss simple and compound interest calculation, annuities and loans. The use of the different calculation methodologies is illustrated by means of exercises and small case studies. In addition, we make use of various multimedia sources such as websites of financial institutions, investment product brochures and announcements in the financial press. In a second part of the course, we discuss the current Belgian Financial Institutional context (in a European perspective), as well as some important developments in this area. Subsequently, we provide an overview of the different activities performed by a bank, and analyze the differences and similarities between banks and non-financial companies. We discuss the most important assets and liabilities on a bank’s balance sheet, the analysis of simple credit packages, some basic principles of asset and liability management and the use of duration. The different theoretical concepts are illustrated by means of realistic examples and information from websites of financial institutions and regulators. A last part of the course explains how Belgian Financial Markets function (in a European perspective). We also discuss the most important financial products traded on these markets.  

Course material

Study material

  • Handbook: Smedts, K., Van Hulle C., Bank- en Financiewezen, ACCO Publisher.
  • Extra course material (artikels, exercises,...)is made available via Toledo.
     

Toledo

  • This teaching activity makes use of Toledo.

Format: more information

In interactive lectures, the material  in the manual is explained and demonstrated on the basis of applications and exercises. These exercises are then further trained in the practical lectures.

1.5 ects. Banking and Finance: Introduction to Financial Models: Work College (B-KUL-D0N12a)

1.5 ECTSDutchFormat: Practical10 Second term
Smedts Kristien |  Mertens Celien (cooperator) |  Vanclooster Lore (cooperator)
OC Handelsingenieur en Handelsingenieur in de beleidsinformatica FEB Campus Leuven

Course material

See study material D0H18a Bank- en financiewezen. During the seminars, exercises are solved as specified in the handbook.

Format: more information

Support session on exercises of the course 'Banking and Finance: Introduction to Financial Models'.

Evaluation

Evaluation: Banking and Financial Markets: Introduction to Financial Models (B-KUL-D2H18a)

Type : Partial or continuous assessment with (final) exam during the examination period
Description of evaluation : Written, Paper/Project
Type of questions : Multiple choice, Open questions
Learning material : List of formulas, Calculator

Explanation


Assessment characteristics

  • The paper/assignment consists of a group work. The precise assignment and deadline are decided by the teaching staff and announced via Toledo.
  • The written exam consists of multiple choice questions and open questions
  • The student may use a simple, non-programmable calculator
  • A formularium is made available as attachment to the exam.

Final result

  • The course is assessed by the teaching staff, as announced via Toledo and exam schedule. The result is calculated and expressed by an integer number on 20.
  • The exam result is a weighted number that is determined as follows:
  • 1 out of 20 points: group work
  • 19 out of 20 points: written exam
  • In the assessment of the multiple choice questions, correction for guessing is applied.
  • In case the student does not participate in the group work or the final exam, the assessment of the non-taken component is counted as a 0-score within the weighted end result.
  • In case the determined submission deadline of the group work is not respected, the assessment of the group work is counted as a 0-score within the weighted end result, unless a new submission date is determined after a request because of an important reason.

Second exam opportunity

The assessment characteristics and the determination of the end result of the second exam opportunity differ from those of the first exam opportunity. In the second exam opportunity, the group work is not included in the assessment anymore and the final assessment only consists of the exam.