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Level 4: Principles of Banking
Introduction
Develop an understanding of the importance of money and financial intermediation in the economy; awareness of balance sheet management in banks; understanding the process of bank account operations, types of loan and credit and the role of banks in the economy.
Module Description
This module aims to provide a comprehensive understanding of the main operational aspects of banking. The module provides an analysis of the role of banks as financial intermediaries. It then provides an in-depth study of bank account operations with personal and business account customers. The underlying principles associated with lending and acceptable forms of collateral are also examined.
Module Content
This module explores the role of retail banks in the UK economy and their interaction with customers. It analyzes the basic function of banks via balance sheet management. Customer account operations with banks are reviewed in order to enable students to understand the delivery of key bank services to personal and business customers.
- Development of money systems: legal tender/convertible money; qualities/functions of money
- Financial intermediation: funds flow analysis; financial claims, personal sector balance sheet
- UK retail banks: balance sheet management; liquidity/capital adequacy; Banking Act 1987
- Bank customers: legal relationships; customer types – personal, companies, societies etc
- Account operations: opening/closing accounts; recovery of bank funds; statements
- Cheques and payment systems: legal aspects of cheques; clearing systems; electronic funds transfer
- Lending: principles of lending; loan types; personal/business loans; ratio analysis
- Loan collateral: attributes of good security; types – eg life policies; shares; property
