Financial Institutions Management: A Modern Perspective, Second Edition, Irwin, 1997

 An Introduction

The theme of this book is that the products sold and risks faced by modern financial intermediaries (FIs) are becoming increasingly similar, as are the techniques used to measure and manage these risks. To see this, Tables 1-1a and 1-1b contrast the products sold by the financial services industry in 1950 with those sold in 1995. In this chapter, we begin by describing two major FI groups, commercial banks and thrifts, which are also called depository institutions because a significant proportion of their funds comes from customer deposits. In Chapters 2 and 3, other (nondepository) FIs will be described. Our attention focuses on three major characteristics of each group: (1) size, structure, and composition of the industry group: (2) balance sheets and recent trends: and (3) regulation.

PART I

Chapter 1: The Financial Services Industry: Depository Institutions

Chapter 2: The Financial Services Industry: Insurance Companies

Chapter 3: The Financial Services Industry: Other Financial Institutions

Chapter 4: Why are Financial Intermediaries Special

PART II

 MEASURING RISK

Chapter 5: Risks of Financial Intermediation

Chapter 6: Interest Rate Risk: The Maturity Model

Chapter 7: Interest Rate Risk: The Duration Model

Chapter 8: Interest Rate Risk: The Repricing Model

Chapter 9: Market Risk

Chapter 10: Credit Risk: Individual Loan Risk

Chapter 11: Credit Risk: Loan Portfolio Risk

Chapter 12: Off-Balance-Sheet Activities

Chapter 13: Operating Cost and Technology Risk

Chapter 14: Foreign Exchange Risk

Chapter 15: Sovereign Risk

Chapter 16: Liquidity Risk

PART 111

MANAGING RISK

Chapter 17: Liability and Liquidity Management

Chapter 18: Deposit Insurance and other Liability Guarantees

Chapter 19: Capital Adequacy

Chapter 20: Product Expansion

Chapter 21: Geographic diversification

Chapter 22: Futures and Forwards

Chapter 23: Options, Caps, Floors, and Collars

Chapter 24: Swaps

Chapter 25: Loan Sales and Other "New" Credit Risk Management Techniques

Chapter 26: Securitization