Financial Institutions Management

Anthony Saunders is the John M. Schiff Professor of Finance and the Chair of the Department of Finance at the Stern School of Business at New York University. Professor Saunders received his PhD from the London School of Economics and has taught both undergraduate and graduate level courses at NYU since 1978. Throughout his academic career, his teaching and research have specialized in financial institutions and international banking. He has served as a visiting professor all over the world, including INSEAD, the Stockholm School of Economics, and the University of Melbourne. He is currently on the Executive Committee of the Salomon Center for the Study of Financial Institutions, NYU.His research has been published in all the major money and banking and finance journals and in several books. In addition, he has authored or co-authored several professional books, the most recent of which is Credit Risk Measurement: New Approaches to Value at Risk and Other Paradigms, John Wiley and Sons, New York, 1999.
Marcia Millon Cornett is the Rehn Professor of Business at Southern Illinois University at Carbondale. She received her B.S. degree in Economics from Knox College in Galesburg, Illinois, and her M.B.A. and Ph.D. degrees in Finance from Indiana University in Bloomington, Indiana. Dr. Cornett has written and published several articles in the areas of bank performance, bank regulation, and corporate finance. Articles authored by Dr. Cornett have appeared in such academic journals as the Journal of Finance, the Journal of Money, Credit and Banking, the Journal of Financial Economics, Financial Management, and the Journal of Banking & Finance. She served as an associate editor of Financial Management and is currently an associate editor for the Journal of Banking & Finance, Journal of Financial Services Research, FMA Online, the Multinational Finance Journal and the Review of Financial Economics. Dr. Cornett is currently a member of the Board of Directors, the Executive Committee, and the Finance Committee of the SIU Credit Union. Dr. Cornett has also taught at the University of Colorado, Boston College, and Southern Methodist University. She is a member of the Financial Management Association, the American Finance Association, and the Western Finance Association.

Saunders and Cornett's Financial Institutions Management: A Risk Management Approach provides an innovative approach that focuses on managing return and risk in modern financial institutions. The central theme is that the risks faced by financial institutions managers and the methods and markets through which these risks are managed are becoming increasingly similar whether an institution is chartered as a commercial bank, a savings bank, an investment bank, or an insurance company. Although the traditional nature of each sector's product activity is analysed, a greater emphasis is placed on new areas of activities such as asset securitisation, off-balance-sheet banking, and international banking.

Part I Introduction Ch. 1 Why Are Financial Institutions Special? Appendix 1A The Financial Crisis: The Failure of Financial Services Institution Specialness (online) Appendix 1B Monetary Policy Tools (online) Ch. 2 Financial Services: Depository Institutions Appendix 2A Financial Statement Analysis Using a Return on Equity (ROE) Framework (online) Appendix 2B Commercial Banks' Financial Statements and Analysis (online) Appendix 2C Depository Institutions and Their Regulators (online) Appendix 2D Technology in Commercial Banking (online) Ch. 3 Financial Services: Finance Companies Ch. 4 Financial Services: Securities Brokerage and Investment Banking Ch. 5 Financial Services: Mutual Funds and Hedge Funds Ch. 6 Financial Services: Insurance Ch. 7 Risks of Financial Institutions Part II Measuring Risk Ch. 8 Interest Rate Risk I Appendix 8A The Maturity Model (online) Appendix 8B Term Structure of Interest Rates Ch. 9 Interest Rate Risk II Appendix 9A The Basics of Bond Valuation (online) Appendix 9B Incorporating Convexity into the Duration Model Ch. 10 Credit Risk: Individual Loan Risk Appendix 10A Credit Analysis (online) Appendix 10B Black-Scholes Option Pricing Model (online) Ch. 11 Credit Risk: Loan Portfolio and Concentration Risk Appendix 11A CreditMetrics Appendix 11B CreditRisk+ Ch. 12 Liquidity Risk Appendix 12A Sources and Uses of Funds Statement, Bank of America, March 2012 (online) Ch. 13 Foreign Exchange Risk Ch. 14 Sovereign Risk Appendix 14A Mechanisms for Dealing with Sovereign Risk Exposure Ch. 15 Market Risk Ch. 16 Off-Balance-Sheet Risk Appendix 16A A Letter of Credit Transaction (online) Ch. 17 Technology and Other Operational Risks Part III Managing Risk Ch. 18 Liability and Liquidity Management Appendix 18A Federal Reserve Requirement Accounting (online) Appendix 18B Bankers Acceptances and Commercial Paper as Sources of Financing (online) Ch. 19 Deposit Insurance and Other Liability Guarantees Appendix 19A Calculation of Deposit Insurance Premiums Appendix 19B FDIC Press Releases of Bank Failures (online) Appendix 19C Deposit Insurance Coverage for Commercial Banks in Various Countries (online) Ch. 20 Capital Adequacy Appendix 20A Internal Ratings-Based Approach to Measuring Credit Risk-Adjusted Assets Appendix 20B Methodology Used to Determine G-SIBs Capital Surcharge (online) Ch. 21 Product and Geographic Expansion Appendix 21A EU and G-10 Countries: Regulatory Treatment of the Mixing of Banking, Securities, and Insurance Activities and the Mixing of Banking and Commerce (online) Ch. 22 Futures and Forwards Appendix 22A Microhedging with Futures (online) Ch. 23 Options, Caps, Floors, and Collars Appendix 23A Black-Scholes Option Pricing Model (online) Appendix 23B Microhedging with Options (online) Ch. 24 Swaps Appendix 24A Setting Rates on an Interest Rate Swap Ch. 25 Loan Sales Ch. 26 Securitization Appendix 26A Fannie Mae and Freddie Mac Balance Sheets (online)