Modern Banking (eBook)

Professor Shelagh Heffernan is currently Professor of Banking and Finance at Cass Business School, City University, London and has been a visiting Professor at several universities. Modern Banking is her fourth book. A former Commonwealth Scholar at Oxford University, Professor Heffernan is also a past beneficiary of a Leverhulme Trust Research Award, which funded new research on competition in banking, and recently received a second award from the Leverhulme Trust. She publishes in top academic journals - her paper, 'How do UK Institutions Really Price their Banking Products?' (Journal of Banking and Finance) was chosen as one of the top 50 published articles by Emerald Management Review. Current research includes: SMEs and banking services, the conversion of mutuals to bank stock firms, monetary policy and pass through (funded by an ESRC grant), and M&As in banking. Professor Heffernan is an Associate Member of the Higher Education Academy and has received two Distinguished Teaching and Learning awards.

ACKNOWLEDGEMENTS.

PREFACE.

CHAPTER 1: What are Banks and What Do They Do?

1.1 Introduction.

1.2 The Meaning of Banking.

1.3 Organisational Structures.

1.4 Banking Structures.

1.5 Financial Conglomerates.

1.6 Central Banking.

1.7 Summary: Why are Banks Special?

1.8 Conclusion.

CHAPTER 2: Diversification of Banking Activities.

2.1 Introduction.

2.2 The Expansion of Banks into Non-banking Financial Services.

2.3 The Effect of Non-interest Income on Banks' Total Income.

2.4 Global Markets and Centres.

2.5 International Banking.

2.6 Banking Issues in the 21st Century.

2.7 Conclusion.

CHAPTER 3: Management of Risks in Banking.

3.1 Introduction.

3.2 Key Financial Risks in the 21st Century.

3.3 Approaches to the Management of Financial Risks.

3.4 Financial Derivatives and Risk Management.

3.5 Management of Market Risk.

3.6 Management of Credit Risk.

3.7 Risk Management by Major Global Bank.

3.8 Conclusion.

CHAPTER 4: Global Regulation of Banks.

4.1 Introduction.

4.2 Why Regulate?

4.3 International Regulation.

4.4 Basel 2 - The Three Pillar Approach.

4.5 Alternative or Complementary Approaches to Basel.

4.6 International Financial Architecture.

4.7 Conclusion.

CHAPTER 5: Bank Structure and Regulation: UK, USA, Japan, EU.

5.1 Introduction.

5.2 Bank Structure and Regulation in the UK.

5.3 Bank Structure and Regulation in the USA.

5.4 Bank Structure and Regulation in Japan.

5.5 Bank Structure and Regulation in the EU.

5.6 Conclusions: Structure and Regulation of Banks.

CHAPTER 6: Banking in Emerging Economies.

6.1 Introduction.

6.2 Financial Repression and Evolving Financial Systems.

6.3 Banking Reforms in Russia, China and India.

6.4 Islamic Banking.

6.5 Sovereign and Political Risk Analysis.

6.6 Conclusion.

CHAPTER 7: Bank Failures.

7.1 Introduction.

7.2 Bank Failure - Definitions.

7.3 Case Studies on Bank Failure.

7.4 The Determinants of Bank Failure: A Qualitative Review.

7.5 Bank Failure: Quantitative Models.

7.6 Conclusion.

CHAPTER 8: Financial Crises.

8.1 Introduction.

8.2 Definitions and Controversies.

8.3 The South East Asian Financial Crisis, 1997-99.

8.4 The Japanese Banking Crisis.

8.5 Scandinavian Banking Crises.

8.6 Long Term Capital Management (LTCM).

8.7 Lender of Last Resort.

8.8 Conclusions.

Appendix 8.1 Japanese Financial Reforms (Big Bang, 1996).

Appendix 8.2 Reform of the Regulators.

CHAPTER 9: Competitive Issues in Banking.

9.1 Introduction.

9.2 Measuring Bank Output.

9.3 X-efficiency, Scale Economies and Scope Economies.

9.4 Empirical Models of Competition in Banking.

9.5 Consolidation in the Banking Sector.

9.6 Conclusion.

CHAPTER 10: Case Studies.

10.1 Introduction.

10.2 Goldman Sachs.

Appendix.

10.3 Kidder Peabody Group.

10.4 From Sakura to Sumitomo Mitsui Financial Group.

10.5 Bancomer: A Study of an Emerging Market Bank.

10.6 Credit Lyonnais.

10.7 Continental Illinois Bank and Trust Company.

10.8 Bankers Trust: From a Commercial/Investment Bank to Takeover by Deutsche Bank.

REFERENCES/BIBLIOGRAPHY.

INDEX.