Introduction to Banking

Professor Moorad Choudhry lectures on the MSc Finance programme at University of Kent Business School. He was previously Treasurer, Corporate Banking Division at The Royal Bank of Scotland, Head of Treasury at Europe Arab Bank, Head of Treasury at KBC Financial Products, Vice President in structured finance services at JPMorgan Chase and a gilt-edged market maker at ABN Amro Hoare Govett Ltd. He is a Fellow of the Chartered Institute for Securities & Investment, a Fellow of the London Institute of Banking and Finance, a Fellow of the Global Association of Risk Professionals and a Fellow of the Institute of Directors.

• Foreword ixPreface xiPreface to the First Edition xvAcknowledgements xviiAbout the Author xixPart I Bank Business and the Markets 11 Bank Business and Capital 32 Customer Services and Marketing for Bank Products 293 Credit Assessment and Managing Credit Risk 494 the Money Markets 955 the Yield Curve 1316 Introduction to Money Market Dealing and Hedging 167Part II Asset–liability Management and Liquidity Risk 2057 Bank Asset and Liability Management I 2078 Asset and Liability Management II: the Alco 2479 Bank Liquidity Risk Management I 26510 Liquidity Risk Management II: Basel III Liquidity, Liabilities Strategy, Stress Testing, Collateral Management and the HQLA 28711 Business Best-practice Bank Internal Funds Transfer Pricing Policy 32912 Net Interest Income (NII), Net Interest Margin (NIM) and the Management of Interest-rate Risk in the Banking Book 34313 Securitisation Mechanics for Balance Sheet Management 375Part III Strategy, Regulatory Capital and Case Studies 39114 Strategy Setting 39315 Bank Regulatory Capital, Basel Rules and ICAAP 41916 Managing Operational Risk 49317 Advice and Problem Solving: Case Studies 505Appendix A Financial Markets Arithmetic 531Appendix B Abbreviations and Acronyms 549Index 553