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Course Outline

ACF 362 – Money, Banking & Institutions.


Course outline
Money, Banking & Institution
Program & Course

Days & Time Tuesday 17:30 - 19:10


Thursday 17:30 -19:10
Location Auditorium To be assigned

Quarters Winter Starts December 06,2005


Ends February 11, 2006

Instructor Mohammad Basharullah


Office ACF WING Room 253
Telephone O42-5722670 Ext 2253
O300-401-3446
E mail bashar@lums.edu.pk
Alternate e-mail basharullah_2000@yahoo.com
Consulting hours Tuesday 14:00-16:30
Thursday 14:00-16:30
Any other days Or by appointments

Required Text Financial Markets and Institutions


By Anthony Saunders and Maricia Millon Cornett 2nd edition

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Course Outline
ACF 362 – Money, Banking & Institutions.

Recommended -Financial Markets and Institutions, And Money by Fredric S. Mishkin


Additional Readings, -Principles Of Money, Banking & Financial Markets By Lawrence S.
Books and Other Ritter, William L. Sliber and Gregory F. Udell, 10th or later Edition,
Material -Money and Capital Market by Peter S. Rose Fifth Edition, Any book on
Money, Banking and Institution; State Bank of Pakistan’s Publications
Financial Press Dawn , Business Section Economic and Business Review); Business
Recorder; Pakistan Economist etc.
WSJ, FT or any other local & International newspaper or Journals;
Various publications of State Bank Of Pakistan
Other Course Pack Shall be made available through photocopier
Material
Students Laser 200 Pages
Printing Quota
Pre requisites of the Intermediate Finance, Economics of Investment and Finance ECON
Course 363/ACF 262
Micro and Macro Economics
Methodology Primarily Lecture method based on assigned readings and class
discussions on assigned topics and reports; current developments.

Course Objectives The course is designed to equip students with knowledge of financial system and its
Expected outcome & regulatory framework and environments in Pakistan and as it exists in a developed
Policy economy. On completion of the course the students shall be able to demonstrate an
understanding of the subject matter.
The course policy envisages positive learning environments in the class. A productive
participation conditional on attendance shall be rewarded judicially. Tardiness and casual
attitude shall be strongly discouraged. Zero tolerance for plagiarism and other unfair
means of securing credits.

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Course Outline
ACF 362 – Money, Banking & Institutions.

Course Evaluation and Rewards


Quizzes 15 %
There shall be total of 5 quizzes from the assigned and the last reading, Best 3 will be
counted.
No Makeup quizzes shall be allowed whatsoever.
Attendance and Class Participation 20 %
Each absence in sessions 4 to 17 shall loose 1 mark and 18-20 shall loose 2 marks for
each session.
An overall absence of 15 minutes or more, in a session shall be deemed as an absence
for the full session.
The course is intended to be highly interactive. All the students are expected to
participate in the class discussions. In order to ensure a positive learning climate, only
intelligent and contributory observation and discussions shall be fully rewarded.
A Report & Presentation 20 %
A report on comprehensive and critical analysis of a selected institution shall be
prepared and presented by each group. (A group project from a group of 3-5 persons,
depending on the size of the class). The groups shall be finalized in the second session.

Each group shall select a Financial Institution. Group members shall be asked to remain
abreast with the developments taking place in the marketplace, through financial press.
The impact of development on the financial institution of their selection will be
monitored by the group. The group is expected to apprise the class with their
observations.
A short report on an assigned topic – An Individual 10 %
Assignment

Final Comprehensive Examination 30 %


The examination could be mix of MCQ short exercise and

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Course Outline
ACF 362 – Money, Banking & Institutions.
Short explanations. Students should also expect a question or two from the assigned
report.

Outline and Daily Agenda On the side


Agenda
Week 2, Day 4 Thursday December 15, 2005
Securities Markets

Chapter 5 & 6
Money Markets & Capital Markets (Fixed Income Securities)
An overview of Money and Capital Market and Instruments;
Part II

Money Market and Bond market in Pakistan.


Week 3, Day 5 Tuesday December 20, 2005 .
Chapter 8, 9 & 10
Stock Markets & Other Markets (Foreign Exchange Markets &
Derivative Securities Markets)
An Overview of the Stock Markets around the world and in Pakistan. Some
issues pertaining to Stock Markets
An Overview and history of Forex market and Interest rates. International
quotations conventions; Foreign Exchange Rates and transactions. An
overview of Derivative securities and markets; Forwards futures; Options;
Swaps and Caps floor and collars etc.

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Course Outline
ACF 362 – Money, Banking & Institutions.

Outline and Daily Agenda On the side


Agenda
Week 3, Day 6 Thursday December 22, 2005
Depository InstitutionsPart III:

Chapter 11,
Commercial Banks
Definition of a Commercial Bank; Balance sheet and recent trends; Commercial
Banking as a sector of Financial service Industry; Structure and composition of
Industry; Technology in commercial Banking; Regulations; Global issues.
Commercial Banking in Pakistan. Islamic Banking in Pakistan
Week 4, Day 7 Tuesday December 27, 2005
Chapter 12
Thrift Institutions
An Overview Of Thrift Institutions; Saving Banks And Saving Association; Credit
Unions. Directorate of National Savings in Pakistan.
Week 4, Day 8 Thursday January 29, 2006
Chapter 13,
Depository Institutions' Financial Statement Analysis
Financial statements of a commercial bank; Analysis of Financial statements;
Return on Equity and its components
Week 5, Day 9 Tuesday January 03, 2006
Chapter 14
Regulation of Depository Institutions
Regulatory environments of Commercial Banks in USA and in Pakistan; Pakistan Banking Council
and Scope of Pakistan Banking Association.

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ACF 362 – Money, Banking & Institutions.

Outline and Daily Agenda On the side


Agenda
Week 5, Day 10 Thursday January 05, 2006 SECP regulation on
Other Financial InstitutionsPart IV:

Chapter 15 Insurance
Insurance Companies Islamic Insurance (Takuful)
The categories of insurance companies, A brief overview of the non banking
financial Sectors;

Week 6, Day 11 Tuesday January 10, 2006


Chapter 16
Securities Firms and Investment Banks; Investment Bankers Association of
Pakistan

Week 6, Day 12 Thursday, January 12, 2006 Presentation on


Chapter 17&18. Modarabas;
Finance Companies; Mutual Funds; Pension Funds; Islamic Modes of Financing
Study of Modarabas; Islamic Banking; Leasing Association of Pakistan; Mutual
Funds association of Pakistan

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ACF 362 – Money, Banking & Institutions.

Outline and Daily Agenda On the side Agenda


Part V:

Week 7, Day 13 Tuesday January 17, 2006 Risk Management in


Chapter 20 Types of Risks Incurred by Financial Institutions Pakistan
Why Financial Institutions need to manage a risk; A brief discussion on different types of risks.

Week 7, Day 14 Thursday, Tuesday January 19, 2006 Presentation on SMEDA


Chapter 21,22 and
Managing Risk on the Balance Sheet I &II: Credit Risk & Liquidity
Risk
Chapter overview; Credit analysis; Lending to Small and Medium size business Liquidity risk
as it exists in different Institution.

Week 8, Day 15 Tuesday January 24, 2006 Presentation on


Chapter 23 Microfinance
Managing Risk on the Balance Sheet III: Interest Rate and
Insolvency Risk
Interest rate risk measurement and management; Repricing and duration models.
Insolvency risk Managements.

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ACF 362 – Money, Banking & Institutions.
Week 8, Day 16 Thursday January 26, 2006 Derivative Markets in
Risk Management in Financial

Chapter 24, Pakistan


Managing Risk with Derivative Securities.
Risk Managements with Forward and Futures contracts; Option feature and
its use as a risk management tools; Swaps; interest rate swaps, currency
Institutions

swaps and credit swaps;

Week 9, Day 17 Tuesday January 31, 2006 Presentation on


Chapter 25. Securitization
Managing Risk through Securitization & final review In Pakistan
Loan sales and securitization; Securitization of other assets;
Securitization in Pakistan

Outline and Daily Agenda On the side Agenda


Week 9, Day 18 Thursday February 02, 2006
Presentations

Presentations by group 1 to 5
Group 1: Topics:-
Group 2: Topics:-
Group 3: Topics:-
Group 4: Topics:-
Group 5: Topics:-

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ACF 362 – Money, Banking & Institutions.
Week 10, Day 19 Tuesday February 07, 2006
Presentations by group 6 to 10
Group 6: Topics:-
Group 7: Topics:-
Group 8: Topics:-
Group 9: Topics:-
Group 10: Topics:-

Week 10, Day 20 Thursday February 09, 2006


Presentations by group 11 to 15
Group 11: Topics:-
Group 12: Topics:-
Group 13: Topics:-
Group 14: Topics:-
Group 15: Topics

Final Examination

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ACF 362 – Money, Banking & Institutions.

Some Of the topics


Swift and other payment Basel Accords I & 2 Risk Management Islamic Banking in Pakistan Insurance in Pakistan;
systems Compliance in Pakistan Islamic Insurance
Syndication in Pakistan Regulatory agencies in Rating in Pakistan International rating of IMF conditionalities. and
Pakistan (PACRA & JCR-VIS) Pakistani Banking Sector its impact on Pakistan
financial System.
Securitization in Pakistan Risk Management in Trends in commercial Consolidation and mergers Privatization of Banking
Pakistan Banking in Banking Sectors in sector
Pakistan
Shape of Emerging Islamic Bonds, Sakuks Central Depository Trend in -use of modern Trends in Lending policies
Financial System Scope of a other technology in Pakistan in Banking Industry
Custodian Banking
Fixed Income Securities Role and Scope of Micro credit in Pakistan, Impact of oil prices on Role of Banking in Disaster
Market in Pakistan SMEADA Successes and Failures banking industry relief managements and
SME Banking reconstruction
Associations of non Need for Financial
Banking Financial sector Service Authority in
Pakistan like FSA of UK
Any other topics
proposed by a students
and approved by the
instructor

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