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FIN – 4733 ADVANCED BANK MANAGEMENT

FIN – 4733 ADVANCED BANK MANAGEMENT. STANFORD BANK GAME BANK MANAGEMENT SIMULATION. SIMULATION DESCRIPTION. WORK IN “MANAGEMENT” TEAMS OF 4 – 5 PEOPLE REVIEW AND EVALUATE MACROECONOMIC AND COMPETITIVE CONDITIONS, AS WELL AS BANK FINANCIAL POSITION PROVIDE DECISION INPUTS

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FIN – 4733 ADVANCED BANK MANAGEMENT

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  1. FIN – 4733 ADVANCED BANK MANAGEMENT STANFORD BANK GAME BANK MANAGEMENT SIMULATION

  2. SIMULATION DESCRIPTION • WORK IN “MANAGEMENT” TEAMS OF 4 – 5 PEOPLE • REVIEW AND EVALUATE MACROECONOMIC AND COMPETITIVE CONDITIONS, AS WELL AS BANK FINANCIAL POSITION • PROVIDE DECISION INPUTS • PREPARE A TERM REPORT AND GIVE AN ORAL PRESENTATION OF RESULTS

  3. TEAM ORGANIZATION

  4. PRESIDENT AND CEO Duties: To determine general bank objectives; develop, integrate, and implement business strategy designed to achieve bank objectives; monitor overall profitability of bank; monitor bank stock price movement; and coordinate and control all activities of the senior management team Additional Duties (Economist): To monitor the financial, competitive, and economic environment surrounding the bank; forecast financial trends in the banking environment; assess competitive threats and opportunities within this environment; complete decision forms on a timely basis; and maintain bank records concerning group decisions

  5. PRESIDENT AND CEO MAJOR SBG RESPONSIBILITIES: Balance Sheet Page 1 Income Statement Page 1 Dividend Policy Page 1 Common Stock Price Page 1 Forecasting Interest Rate Changes Page 7 Forecasting Economic Conditions Page 7 Forecasting Funds Availability Page 7 Monitoring Other Banks’ Position Pages 8,9 Evaluating Other Banks’ ratios Page 6

  6. PRESIDENT AND CEO Duties: To determine general bank objectives; develop, integrate, and implement business strategy designed to achieve bank objectives; monitor overall profitability of bank; monitor bank stock price movement; and coordinate and control all activities of the senior management team

  7. PRESIDENT AND CEO MAJOR SBG RESPONSIBILITIES: Balance Sheet Page 1; Income Statement Page 1; Dividend Policy Page 1; Common Stock Price Page 1.

  8. VICE PRESIDENT OF OPERATIONS Duties: To manage all aspects of the bank’s deposit acquisition activity, supervise personnel administration, and control bank expansion/contraction activity

  9. VICE PRESIDENT OF OPERATIONS MAJOR SBG RESPONSIBILITIES: Monitoring Demand Deposit Acquisition Pages 2.2, 2.9, and 7 Monitoring Time Deposit Acquisition Pages 2.3, 2.8, and 7 Forecasting CD Availability Pages 2.10, and 7 Monitoring Required Reserve Position Pages 2.4 and 7 Monitoring Personnel Expenses Page 3.19 Managing Bank Expansion/contraction Page 3.20

  10. VICE PRESIDENT OF LENDING Duties: To manage all aspects of the bank’s loan portfolio, including commercial loans, commercial loan commitments, and commercial letters of credit, consumer installment loans, credit card receivables, and mortgage loans

  11. VICE PRESIDENT OF LENDING MAJOR SBG RESPONSIBILITIES: Forecasting New Loan Sales Page 2.7 Monitoring Loan Charge-offs Pages 2.7, 2.11 Monitoring Loan Loss Provision Page 2.7 Establishing Credit Policy Page 2.7 Determining Loan Interest Rates Pages 2.7, 7 Determining Loan Fees Page 2.8 Determining LOC Policy and Fees Pages 3.16, 3.18, 3.19 Monitoring Loan Commitments Pages 3.17, 3.18

  12. VICE PRESIDENT OF LENDING MAJOR SBG RESPONSIBILTIES (CONTINUED): Forecasting Commercial Loan Payments Page 4.21 Determining Credit Card Fees Page 3.14 Determining Credit Card Processing Fees Page 3.19 Determining Mortgage Loan Servicing Fees Page 3.18 Determining Mortgage Loan Initiation Fees Page 3.18 Forecasting Consumer Loan Payments Page 4.22 Forecasting Mortgage Loan Payments Page 4.22

  13. VICE PRESIDENT OF INVESTMENTS Duties: To manage the bank’s investment portfolio, recommend and implement gap management strategy, monitor the bank’s exposure to economic risk and implement appropriate hedging strategies to minimize this risk in the futures market, recommend and implement changes in bank capital structure, supervise trust and accounting activities, and administer corporate banking services

  14. VICE PRESIDENT OF INVESTMENTS MAJOR SBG RESPONSIBILITIES: Monitoring Bank Cash Management Activities Page 2.5 Monitoring Bank Securities Portfolio Page 6 Establishing optimal gap risk factor Page 5 Monitoring and Hedging Interest Rate Risk Page 1 Controlling Purchase and Sale of Federal Funds Pages 2.8, 7 Controlling Discount Window Borrowing Page 2.8 Issuing Capital Notes Pages 2.6, 7 Issuing New Common Stock Page 10 Maintaining Trust Portfolio Page 3.12 Controlling Trust Income and Expenses Pages 3.18, 3.19

  15. WRITTEN AND/OR ORAL ASSIGNMENTS • NAMING THE BANK • ESTABLISHING A CORPORATE STRATEGY FOR THE BANK • ESTABLISHING FINANCIAL PERFORMANCE OBJECTIVES FOR THE BANK • QUARTERLY OPERATING DECISIONS • FINAL (TERM) REPORT

  16. ELEMENTS OF THE FINAL (TERM) REPORT • OUTLINE OF THE BASIC CORPORATE STRATEGY • EXPLANATION OF HOW THE STRATEGY WAS IMPLEMENTED AT EACH ITERATION (QUARTER) • IDENTIFICATION OF HOW UNANTICIPATED CHANGES IN THE MACROECONOMY AND COMPETITION LED TO ADJUSTMENTS, MODIFICATIONS, AND OUTRIGHT CHANGES IN OPERATING TACTICS • EVALUATION OF THE FINANCIAL PERFORMANCE AND CONDITION OF THE BANK AT THE END OF EACH ITERATION (QUARTER) • SUMMARY EVALUATION OF THE FINANCIAL PERFORMANCE OVER THE ENTIRE PERIOD

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