Objectifs

Accounting and financial reporting for bank and financial institutions are rather challenging than those for nonfinancial firms since banks create complex financial products and transactions that often stress existing financial reporting rules. Subsequent the recent financial crisis, regulatory bodies such as Basel Committee, and accounting standard setters such as IASB and FASB, have issued a flow of new rules and policy aiming at improve the transparency, the efficiency and the stability of banking and financial system. Reflecting these facts, a primary goal of this course is to provide students with the intellectual tools to understand banks major risks and the solutions in managing various risks in relation to banks business activities. Such understanding requires an awareness of the economically important features of banks business models and how these features are reflected in banks risk exposure and captured by bank-specific regulations.

Relevantly, the second main purpose of the course is to learn how to interpret bank’s annual and Pillar 3 reports. Using real cases and bank’s reporting, we will discuss how to account for different types of risks associated with banks specific financial instruments, what are the accounting challenges rose by hedging activities and complex structured transactions such as securitization, and how the problem of banks opacity is mitigated in part through disclosure.

Thus, the course will help master students to gain an in-depth understanding and practical knowledge on bank accounting from the perspectives of risk management and the implementation of both accounting standards and Basel rules.

Contenus

The course is structured in two main parts:

Part 1: Banking system and regulation

• Introduction of banking & bank reporting
• Major risks and risk management system in banks
• Basel Rules and regulatory capital

Part 2: Special accounting issues related to banking risks

• Accounting for credit risk under IFRS 9
• Market risk under fair value accounting
• Derivatives and hedge accounting
• Securitization

Références

• AG: Arnold G. 2014. The Financial Times Guides to Banking: Peason ltd.
• GA: Ghosh, A., 2012. Managing Risks in Commercial and Retail Banking: John Wiley & Sons, Inc.
• RS: Ryan, S. 2007. Financial Instruments and Institutions, Accounting and Disclosure Rules. 2nd Edition. Hoboken, New Jersey: John Wiley and Sons, Inc.
• CM: Choudhry, M. 2012. The principles of Banking. Singapore: John Wiley and Sons, Inc.

Pré-requis

• Accounting treatment for financial instruments under IFRS 9;
• A general knowledge on banking industry and capital market;
• Banks' reporting and Basel regulation

Evaluation

1ère tentative

Examen:

Ecrit 2h00 heures

Documentation:

Autorisée avec restrictions

Calculatrice:

Autorisée

Evaluation:

Final written digital exam on the campus (100%).

According to the situation of covid epidemic, the right to change or modify the terms, evaluation methode and exam condition contained in this course sites is well reserved, at any time during the Spring term.

Rattrapage

Examen:

Ecrit 2h00 heures

Documentation:

Autorisée avec restrictions

Calculatrice:

Autorisée

Evaluation:

RETAKE SESSION

Final written digital exam on the campus (100%), subject to change according to Covid epidemic situation.