International Banking Business
strategic Bank management objectives; core bank processes; fundamental mechanisms to manage risk (avoidance, pricing, reduction by diversification, hedging); risk adjusted performance measures RAPM (e.g. Rorac, Raroc, Rarorac, etc.): advantages, disadvantages and problems associated with the measurement of RAPM; definition and function of different types of capital: Tier 1, 2 and 3 capital, regulatory capital vs. Economic capital; definition, motivation and methods of economic capital allocation (budgeting, internal capital market, etc.); limit systems in banks; organisation of the risk management department and ist integration in the total system of a bank (single bank perspective and group perspective); reporting systems; regulatory aspects for risk management (pillar 2 of Basel II, especially ICAAP, disclosure rules according to pillar 3 of Basel II and according to IFRS); new regulatory aspects concerning Basel III
International Banking and Finance (Master)
Language of instruction
After this lecture students are able to decompose strategic objectives into sub-objectives and apply strategic methods and instruments of a risk-oriented integrated bank management and controlling in an international business environment. In particular, they are able to analyze advantages and disadvantages of the various risk adjusted performance measures (RAPM). Furthermore the students can connect the mechanisms of economic capital allocation. They are also able to set up a bank-wide limit system.