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FIN3109 Managing Financial Institutions

Semester 1, 2019 On-campus Springfield
Short Description: Managing Financial Institution
Units : 1
Faculty or Section : Faculty of Business, Education, Law and Arts
School or Department : School of Commerce
Student contribution band : Band 3
ASCED code : 081101 - Banking and Finance
Grading basis : Graded


Examiner: David Troedson


Pre-requisite: FIN1103

Other requisites

Students are required to have access to a personal computer, e-mail capabilities and Internet access to UConnect. Current details of computer requirements can be found at


Financial management of core bank activities is a highly complex task requiring a broad range of financial skills. Banks must obtain funding from various sources in order to extend loans. They must generate sufficient return to cover their funding costs while maintaining adequate levels of liquidity. They must balance the returns they make against a range of financial risks including capital risk, interest rate risk, liquidity risk, foreign exchange risk, operational risk and credit risk. Banks undertake a range of on-balance-sheet and off-balance sheet activities and operate in local, national and international markets. In addition to interest costs and revenues, banks incur a range of non-interest costs and generate various non-interest revenues including fees and charges, commissions and capital gains. This course aims to provide students a broad knowledge of these various activities and to equip students with skills relevant to the management of such activities.


This course provides a broad appraisal of authorized deposit taking institutions (ADIs), and the associated decision making processes of the financial services sector in Australia. A range of topics is addressed including: the Australian financial environment; understanding financial statements; evaluating returns, risks and performance; the yield curve and gap management; the management of liabilities, liquidity, the securities portfolio and capital; and hedging and pricing with various interest rate derivatives. Formerly FIN2109.


On successful completion of this course, students should be able to:

  1. Synthesise financial institution treasury management concepts, regulations, principles and processes required to manage capital, liabilities, securities, interest rates, hedging activities and overall bank performance
  2. Think critically, constructively and logically about the rationale behind regulatory developments in the banking sector and their likely impacts
  3. Communicate clearly and concisely through presenting banking knowledge and industry relevant concepts and forecasts
  4. Apply banking-related knowledge and technical skills to solve problems faced by financial services professionals in the management of financial institutions
  5. Demonstrate the literacy and numeracy skills required of financial services professionals by interpreting industry reports and undertaking the range of calculations that face managers of financial institutions (including management of the repricing gap and duration gap)
  6. Work collaboratively to address banking industry developments and implications.


Description Weighting(%)
1. Introduction to pricing fixed income securities, elasticity and duration 4.00
2. Understanding financial statements of ADIs 8.00
3. Evaluating returns, risks and overall performance 9.00
4. Prudential supervision, Basel Accords and capital management 9.00
5. Managing liabilities 9.00
6. Managing liquidity 9.00
7. Managing the securities portfolio 9.00
8. Managing interest rate risk I 8.00
9. Managing interest rate risk II 8.00
10. Financial futures and forwards 9.00
11. Financial options 9.00
12. Interest rate swaps. 9.00

Text and materials required to be purchased or accessed

ALL textbooks and materials available to be purchased can be sourced from USQ's Online Bookshop (unless otherwise stated). (

Please contact us for alternative purchase options from USQ Bookshop. (

Hogan, W, Avram, KJ, Brown, C, Degabriele, R, Ralston, D, Skully, M, Hempel, G, Simonson, D & Sathye, M 2004, Management of financial institutions, 2nd edn, John Wiley & Sons, Milton, Queensland.
Koch, T, MacDonald, S, Edwards, V & Randall, E 2014, Bank management: a decision making perspective, Cengage Learning, Singapore.
The Koch et al text is also used in FIN2108 Credit Analysis and Lending Management.

Reference materials

Reference materials are materials that, if accessed by students, may improve their knowledge and understanding of the material in the course and enrich their learning experience.
Hull, JC 2018, Risk management and financial institutions, 5th edn, Wiley, Hoboken, New Jersey.
Hunt, B & Terry, C 2018, Financial institutions and markets, 8th edn, Cengage Learning, Melbourne, Victoria.
Saunders, A & Cornett, M 2017, Financial institutions management: a risk management approach, 9th edn, McGraw-Hill, New York.

Student workload expectations

Activity Hours
Directed Study 36.00
Independent Study 129.00

Assessment details

Description Marks out of Wtg (%) Due Date Notes
ASSIGNMENT 30 30 26 Apr 2019 (see note 1)
QUIZZES 40 40 07 Jun 2019 (see note 2)
EXAM 30 30 End S1 (see note 3)

  1. The assignment includes a group-work presentation
  2. Four online quizzes will be conducted during the semester. Further details will be provided on the course Study Desk.
  3. This is a restricted examination. The total working time for the examination is 2 hours. The examination date will be available via UConnect when the official examination timetable has been released.

Important assessment information

  1. Attendance requirements:
    Online: There are no attendance requirements for this course. However, it is the students' responsibility to study all material provided to them or required to be accessed by them to maximise their chance of meeting the objectives of the course and to be informed of course-related activities and administration.

    On-campus: It is the students' responsibility to attend and participate appropriately in all activities (such as lectures, tutorials, laboratories and practical work) scheduled for them, and to study all material provided to them or required to be accessed by them to maximise their chance of meeting the objectives of the course and to be informed of course-related activities and administration.

  2. Requirements for students to complete each assessment item satisfactorily:
    To satisfactorily complete an individual assessment item a student must achieve at least 50% of the marks. (Depending upon the requirements in Statement 4 below, students may not have to satisfactorily complete each assessment item to receive a passing grade in this course.)

  3. Penalties for late submission of required work:
    Students should refer to the Assessment Procedure (point 4.2.4)

  4. Requirements for student to be awarded a passing grade in the course:
    To be assured of receiving a passing grade in a course a student must obtain at least 50% of the total weighted marks for the course.

  5. Method used to combine assessment results to attain final grade:
    The final grades for students will be assigned on the basis of the aggregate of the weighted marks obtained for each of the summative assessment items in the course.

  6. Examination information:
    This is a restricted examination. Candidates are allowed access to specific materials during the examination. The only materials that candidates may use in the examination for this course are:
    1. writing materials (non-electronic and free from material which could give the student an unfair advantage in the examination)
    2. calculators which cannot hold textual information (students must indicate on their examination paper the make and model of any calculator(s) they use during the examination).
    Students are not permitted to take mobile telephones, pagers or other electronic means of communication into the examination room.

  7. Examination period when Deferred/Supplementary examinations will be held:
    Any Deferred or Supplementary examinations for this course will be held during the next examination period.

  8. University Student Policies:
    Students should read the USQ policies: Definitions, Assessment and Student Academic Misconduct to avoid actions which might contravene University policies and practices. These policies can be found at

Assessment notes

  1. Referencing in assignments:
    Harvard (AGPS) is the referencing system required in this course. Students should use Harvard (AGPS) style in their assignments to format details of the information sources they have cited in their work. The Harvard (AGPS) style to be used is defined by the USQ Library's referencing guide at