Core Classes | First Year Students

This course involves analysis and interpretation of the macro-economy. National policies designed to promote employment, price stability, and economic growth are considered. The course reviews the major schools of economic thought and then carefully examines the postwar performance of the U.S. economy, demographics, actions by the Fed, and current national and international policies.

Credit risk management has traditionally focused on transaction management. Policies, procedures, systems and controls were designed to assure the bank originated quality transactions. Yet, many banks have failed despite doing an adequate job of managing the risk in individual transactions. These banks became victims of the Three Deadly Sins of credit risk management: (1) a high proportion of the portfolio in the more risky pass categories, (2) emphasizing higher risk types on lending, and (3) allowing concentrations to build in the portfolio with a small group of borrowers, in one geographic area, one type of lending or one industry, type of agriculture or property type.

This course will allow students to define their institution's tolerance for risk, assess the bank's credit culture, and determine the potential for volatility in portfolio credit quality and earnings. Students will construct a credit risk profile for their bank to assess the institution's vulnerability to the Three Deadly Sins. Students will have the opportunity to benchmark their institution's credit process including loan policy, loan approval process, asset quality (risk) rating framework, credit policy committee, credit administration and loan review functions against industry best practices. Students will be encouraged to develop strategies: (1) to build competitive advantage with effective loan pricing (2) to compete in the new legislative and regulatory environment and (3) to avoid repeating industry credit risk management mistakes. Students will also have the opportunity to focus on key lender mistakes that can lead to potential problem loans. Finally, students will be introduced to new tools to better manage portfolio credit risk, e.g., credit scoring, securitization, and credit derivatives.

Dynamic Leadership provides participants with an opportunity to explore, develop and enhance many of the critical leadership attributes, qualities, skills and competencies needed to create and sustain dynamic organizational success. This program will challenge the participants to build on their established skills and competencies and to exchange ideas and experiences in a way that enhances their leadership effectiveness.

Banking involves many of the most fundamental tools and techniques in modern finance. This course is designed to present these tools and techniques and to show how they are used in practice to both value companies, and perhaps more importantly, to think about what drives value and how it can be created. In the final analysis good business decisions build value, so a strong foundation in the determinants of value and value creation is critically important to bankers as well as business people in general. The course is divided into three modules. First, we will discuss the fundamentals of the time value of money. At its core, valuation involves comparing cash flows that occur at different times and with different levels of certainty. How do we compare a cash flow today with a cash flow at some point in the future, even if both are certain to occur? Which one is better? How do we know? What if one or more of the cash flows is uncertain? As part of this process we will consider several fundamental financial instruments, including stocks and bonds, and how they are valued in competitive capital markets. Second, we will use what we have learned to understand valuation of private companies. What cash flows are relevant for valuation in practice? How do we identify and forecast them? How can we use what we know about discount rates in public markets to value these cash flows? Lastly, in Module 3 we will work through a case study involving an actual valuation, thereby putting into practice all that we have learned. Throughout the process, we learn interesting and extremely useful frameworks and techniques that will be of great benefit to you in helping you as develop a competitive advantage over your peers and progress in your career!

Topics covered include financial structure and financial performance of banks; sources of information for measuring financial performance of banks; analyzing and evaluating bank profitability; analyzing and evaluating financial risk of banks; and analyzing bank rating services. The most important concepts that students learn from this course include how to integrate financial reports on the banking industry, how to pin-point the weaknesses and strengths of a financial institutions by going through information provided in the UBPR, and how to evaluate a bank's financial performance and find solutions to improve bank performance.