The Principles of Banking

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  • Format: Hardcover
  • Copyright: 2012-05-29
  • Publisher: Wiley
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The 2007-2008-2009 financial market crisis has shown that the original principles of banking sound liquidity risk management have been forgotten during a prolonged bull market run. The ultimate result of this was bank failures such as Northern Rock, Lehmans and HBOS which had profound consequences for the world economy and created a global recession that may yet lead to long-term depression. This book is an essential guide for bankers in every country of the world that reiterates the primary objective of banks and serves as a policy guide for all market practitioners. The original principles of banking such as sound lending policy and liquidity management need to be restated again and emphasized for bankers, regulators and investors. The book investigates the part played by unsound banking practices in the creation of the 2007-2008 financial market crisis. It then lists a "policy guide" for all banks that bankers must observe through good times, which will enable them to survive the bad times. This is followed by in-depth technical analysis that bankers must observe as part of good business banking practice. And banks must recognize that business cycles are just that: cycles. Good times do not last forever and banks must be managed with discipline so that they survive the bad times. This book is a policy guide for the entire business cycle.

Author Biography

Moorad Choudhry is Treasurer, Corporate Banking Division at The Royal Bank of Scotland.
He is Visiting Professor at the Department of Mathematical Sciences, Brunel University; Visiting
Professor at the Department of Economics, London Metropolitan University; and Visiting Teaching Fellow at the Department of Management, Birkbeck, University of London. He is a Fellow of the Chartered Institute for Securities & Investment and a Fellow of the ifs-School of Finance.
He lives in Surrey, England.

Table of Contents

Forewordsp. xiii
Prefacep. xvii
Acknowledgementsp. xxiii
About the Authorp. xxv
A Primer on Bankingp. 1
A primer on bank business and balance sheet riskp. 3
Bank regulatory capitalp. 75
Banking and credit riskp. 131
A primer on securitisationp. 179
The yield curvep. 221
Bank Asset and Liability Managementp. 351
Asset-liability management Ip. 353
Asset-liability management IIp. 385
Asset-liability management III: Trading and hedging principlesp. 445
Asset-liability management W: The ALCOp. 493
The ALCO: Terms of reference and treasury operating modelp. 503
Risk reporting, risk policy and stress testingp. 531
Bank Liquidity Risk Managementp. 587
Principles of bank liquidity managementp. 589
liquidity risk metricsp. 653
Liquidity risk reporting and stress testingp. 687
Internal funds pricing policyp. 715
Bank Strategy and Governancep. 759
Bank strategy I: Formulating strategy and directionp. 761
Bank strategy II: Capital and funding managementp. 801
Principles of corporate governancep. 831
Applications Software, Policy Templates and Teaching Aidsp. 861
Applications software, policy templates and spreadsheet modelsp. 863
Afterwordp. 867
List of terms and their abbreviationsp. 869
Indexp. 875
Table of Contents provided by Ingram. All Rights Reserved.

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