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

Mode of delivery

face to face



Recommended or required reading and other learning resources/tools

Lecturer will provide slides and further material.

Planned learning activities and teaching methods

Explanations of Lecturere, Student´s Presentation of their assignments

Assessment methods and criteria

various assignments will be graded

Prerequisites and co-requisites

ALM, Bank Controlling


Degree programme

International Banking and Finance (Master)



ECTS Credits


Language of instruction




Academic year



2 SS



Learning outcome

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.

Course code