Contents written by Cem Demiroglu
Last modified on February 9, 2012.
MFIN 302 - Bank Financial Management
1. An overview of the financial system and the role of financial institutions
Lecture Notes #1 (An overview of the financial system)
Required reading: Rajan, Raghuram, 1998, “Do we still need commercial banks?” NBER Speech.
Suggested (but not required) reading: Greenspan, Alan, 1989, “Commercial banks and the central bank in a market economy,” Kansas City FED Economic Review
Case 1: Prosper.com
2. Banking & syndicated lending
Lecture Notes #2 (Bank lending and bank financial statements)
Case 2: Hong Kong Disneyland Finance (Background reading: S&P Guide to the Syndicated Loan Market)
Case 3: Finansbank 2006
3. Interest rate risk & market risk
Hull Ch. 7, 8, 12, 13
Lecture Notes #3 (Interest rate risk)
Lecture Notes #4 (Market risk)
4. Small business finance, venture capital, and private equity
Lecture Notes #5 (Small business finance)
Required reading: The Economist, “The new kings of capitalism,” 2004.
Suggested (but not required) reading:
1. Sahlman, William, 1988, "Aspects of financial contracting in venture capital," Journal of Applied Corporate Finance, 1:2, 23-36.
2. Metrick, Andrew, and Ayako Yasuda, 2010, “Venture capital and other private equity: A survey” Read also Kaplan’s presentation on the past, present, and future of private equity from here.
Case 4: Yale Investment Office
5. Credit risk & securitization
Hull Ch. 14 and 15
Lecture Notes #6 (Credit risk)
Required reading:
1. Gorton, Gary, 2008, "The Subprime Panic" Manuscript, Yale University, forthcoming European Financial Management. This has a good summary of how subprime mortgages and complex structures actually worked.
2. Coval, Joshua, Jakub Jurek and Erik Stafford, "The economics of structured finance,” Journal of Economic Perspectives, 23:1, 3-26.
3. Ashcraft, Adam, Til Schuermann, 2008, "The seven deadly frictions of subprime mortgage credit securitization," The Investment Professional, Fall 2008.
Suggested (but not required) reading:
1. Rajan, Raghuram, 2005, “Has financial development made the world riskier?” Financial Markets, Financial Fragility, and Central Banking: A Symposium Sponsored by the Federal Reserve Bank of Kansas City.
2. Duffie, Darrell, 2008, “Innovations in credit risk transfer: Implications for financial stability,” BIS working paper.
6. Liquidity risk, too-big-to-fail, and financial crises
Hull Ch. 19
Lecture Notes #7 (Liquidity risk)
Required reading:
1. Gorton, Gary B, 2010, Questions and Answers about the Financial Crisis Manuscript, Prepared for the U.S. Financial Crisis Inquiry Commission
2. Cochrane, John H. and Luigi Zingales Lehman and the Financial Crisis September 15 2009 The authors don’t buy the “all would have been fine if they bailed out Lehman” line.
Suggested (but not required) reading:
1. Bernanke, Ben S., 2010, Statement before the Financial Crisis Inquiry Commission, web version From the guy at the top.
2. Swagel, Phillip, 2009, “The finanical crisis: An inside view” Forthcoming Brookings Papers on Economic Activity. This is a nice view of the political and legal constraints as well as the government’s perspective.
3. Gorton, Gary B., and Andrew Metrick, 2009, “Securitized Banking and the Run on Repo” Forthcoming, Journal of Financial Economics. Only read to page 18.
Case 5: LTCM
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Contents written by Cem
Demiroglu
Last modified on February 9, 2012.