Unit convenor and teaching staff |
Unit convenor and teaching staff
Unit Convenor
Shauna Ferris
Contact via shauna.ferris@mq.edu.au
e4a 617
Wednesday 3 pm to 6 pm
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Credit points |
Credit points
4
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Prerequisites |
Prerequisites
4cp in ACCG or ACST or BUS or ECON or MKTG units at 600 level
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Corequisites |
Corequisites
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Co-badged status |
Co-badged status
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Unit description |
Unit description
In this unit we will look at financial institutions which fail. We will look at empirical studies of insolvencies from different countries and for different types of financial institutions (including life and general insurers, health funds, banks, superannuation funds, hedge funds, and other investment management and risk management organisations). We will consider factors such as product design, pricing, reserving, investment, asset-liability management, liquidity management, reinsurance, accounting issues, regulatory arbitrage, and corporate governance. We will also be looking at the effectiveness of regulation, both in preventing failures and dealing with the consequences of failures (eg, using guarantee schemes).
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Information about important academic dates including deadlines for withdrawing from units are available at https://www.mq.edu.au/study/calendar-of-dates
On successful completion of this unit, you will be able to:
Name | Weighting | Due |
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1. Reports | 30% | March 31, April 29, May 27 |
2. Essays | 30% | May 12 & June 10 |
3. Final Examination | 40% | Examination period |
Due: March 31, April 29, May 27
Weighting: 30%
Submission
Each week, the lecturer will provide two or three research questions which relate to the material covered in that week's lecture and readings. Students will be asked to choose one of these questions and write a 2-page report answering that question.As an example, in week 1 we cover Ponzi schemes. Students may choose to do a case study describing a Ponzi scheme from their own country, explaining how it was operated and how the authorities discuvered the fraud.
Students must hand in five reports during the term, each worth 6% (total 30%). The reports are handed in electronically via the iLearn drop box. Two reports must be handed in by 5 pm Monday March 31. Two more must be handed in by 5 pm Monday April 29. The last one must be handed in before 5 pm Monday May 27.
Extension No extensions will be grantd. Late tasks will be accepted up to five days late, but one mark will be deducted from the total awarded mark for each 24 hour period or part thereof (for example if the report is handed in 25 hours late, 2 marks will be deducted). The penalty does not apply for cases in which an application for special consideration has been made and approved.
Due: May 12 & June 10
Weighting: 30%
Submission Students will be asked to write an analysis of two case studies of failed (or troubled) financial institutions. The case study will include a description of the events; the causes of the failure (including any weaknesses in risk management); and evaluate the regulatory response to the failure (identifying any weaknesses in the legislation / prudential regulations and or the quality of supervision). Each essay is worth 15%. The maximum word length is 1500 words.
Essays must be sunmitted via the iLearn Dropbox.
Extension No extensions will be granted. Late tasks will be accepted up to one week late, but 10% will be deducted from the total mark for each 24 hour period or part thereof (for example, if submitted 25 hours late, a penalty of 20% will be applied). This penalty does not apply for cases in which an application for special consideration is made and approved.
Due: Examination period
Weighting: 40%
The final exam will be held during the University exam period between 16 June and 4 July. The examination timetable will be posted on the University website later in the t
Classes
Required and Recommended Texts and/or Materials
Required texts
There are no compulsory textbooks for this unit. We will be reading case studies from a variety of sources. Readings will be placed online (via the iLearn system) where possible. Some books will also be placed in Special Reserve in the Library.
Technology Used and Required
NIL
Unit Web Page
Teaching and Learning Activities
Each week we have a 3-hour lecture on Wednesday evening. We will look at one or more case studies each week. In some weeks we will also be watching DVDs about certain events. This will be followed by a class discussion of the issues. A set of course notes and/or readings will be provided for each topic. Students are expected to participate in class discussions and read the required readings.
For each topic, we will provide a set of questions which will allow students to extend their knowledge by reading and summarising additional readings. Students are expected to hand in 5 reports over the term. Students will have a choice of topics.
Students will also be expected to research two case studies, and prepare an essay on each one.
Students may be asked to do a short (5 minute) presentation of one of the topics covered in their report (if the class size if large, then it will not be possible for every student to do a presentation, but we will try to give this opportunity to as many students as possible).
Changes in 2014
This year we have updated the course material to reflect new developments in the financial services industry. We have reduced the number of short reports and replaced them with an essay. The timing of due dates for assessment tasks has been changed to help students spread their work more evenly over the term.
The following unit schedule is subject to change, because (a) the schedule might be revised to fit in with the other committments of our visiting lecturers and (b) if there are any interesting financial events during term we might be diverted into discussing them in class.
Week |
Topic |
1 |
Introduction: Ponzi Schemes and Investment Scams (Madoff Case Study) |
2 |
Financial Advisors and the Future of Financial Advice (Storm & Trio Case Studies) - ASIC's role |
3 |
"The best way to rob a bank is to own one" - (Case Studies Frankel & USNB & Iceland) - Prudential Standards Framework for Banks and Insurers |
4 |
Why do banks go bankrupt? Credit Risks & Systemic Risk (Case Study: Penn Square Bank) |
5 |
How poor regulation makes it worse (Case Study: US Savinga and Loans Crisis) |
6 |
Lending to the poor: Australian version (Securitisation & Homefund) |
7 |
How to destablise the financial system: Global version (the Subprime debt crisis) |
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8 |
Lending to the Poor: Doess Microfinance work? (Grameen Bank & Fiery Dragons ) |
9 |
Operational Risks in Banking : Rogue traders around the world (Barings to NAB) |
10 |
Why do insurance companies become insolvent? |
11 |
Booms and Busts and Banking (From the Great Depression to the GFC) |
12 |
Cooking the books: Basic and Advanced Concepts in "Creative Accounting" for financial institutions (case Study Lehman Brothers and HIH) |
13 |
Guarantee Schemes |
Macquarie University policies and procedures are accessible from Policy Central. Students should be aware of the following policies in particular with regard to Learning and Teaching:
Academic Honesty Policy http://mq.edu.au/policy/docs/academic_honesty/policy.html
Assessment Policy http://mq.edu.au/policy/docs/assessment/policy.html
Grading Policy http://mq.edu.au/policy/docs/grading/policy.html
Grade Appeal Policy http://mq.edu.au/policy/docs/gradeappeal/policy.html
Grievance Management Policy http://mq.edu.au/policy/docs/grievance_management/policy.html
Disruption to Studies Policy http://www.mq.edu.au/policy/docs/disruption_studies/policy.html The Disruption to Studies Policy is effective from March 3 2014 and replaces the Special Consideration Policy.
In addition, a number of other policies can be found in the Learning and Teaching Category of Policy Central.
Macquarie University students have a responsibility to be familiar with the Student Code of Conduct: https://students.mq.edu.au/support/student_conduct/
Supplementary Examinations Policy - refer to http://www.businessandeconomics.mq.edu.au/current_students/undergraduate/how_do_i/special_consideration
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Learning Skills (mq.edu.au/learningskills) provides academic writing resources and study strategies to improve your marks and take control of your study.
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Our postgraduates will be able to demonstrate a significantly enhanced depth and breadth of knowledge, scholarly understanding, and specific subject content knowledge in their chosen fields.
This graduate capability is supported by:
Our postgraduates will be capable of utilising and reflecting on prior knowledge and experience, of applying higher level critical thinking skills, and of integrating and synthesising learning and knowledge from a range of sources and environments. A characteristic of this form of thinking is the generation of new, professionally oriented knowledge through personal or group-based critique of practice and theory.
This graduate capability is supported by:
Our postgraduates will be capable of systematic enquiry; able to use research skills to create new knowledge that can be applied to real world issues, or contribute to a field of study or practice to enhance society. They will be capable of creative questioning, problem finding and problem solving.
This graduate capability is supported by:
This unit will
(a) provide students with an opportunity to do their own research ino areas which interest them
(b) present research papers written by Macquarie University staff
(c) present research findings from other academic sources as well as research papers from regulatory authorities