EC3028: Money and Banking

EC3028: Money and Banking
City, University of London
Written Assignment
15th November 2021
Due 22nd November 2021 at 4.00pm (London time)
Rules:
1) This is an essay-like question. You are expected to produce an original piece of work.
2) This work is individual: this means that you must work on the assignment by yourself, with no copying or
help from other students.
3) I will check for plagiarism and for similarity among different submissions. If copying or plagiarism is
detected, both students’ exam will be nullified and they will be reported to the plagiarism office.
4) The overall word limit is 1000 words. This includes title, captions, references, notes, etc.
5) Any excess above the word limit will be penalized with a reduction in your grade.
6) The deadline for the submission of this assignment is the 22nd November at 4.00pm London time.
7) The assignment must be submitted via Moodle on the “Written Assignment Submission Point”. The url
link is the following: https://moodle.city.ac.uk/mod/assign/view.php?id=2119912
8) Late submissions will be penalized with a reduction in your grade.
9) Your assignment should be submitted in Microsoft Word format (.docx).
10) My advice is to aim to submit in advance of the deadline. My suggestion is to aim to submit by 21st
November at 4.00pm. This is because I will not accept excuses such as “My internet wasn’t working” or
“My laptop crashed”. By aiming to submit in advance, you will have enough buffer time to handle any
exceptions.
Questions
(a) Select one of the following banks: Barclays PLC, HSBC Holdings PLC, Lloyds Banking Group
PLC, Royal Bank of Scotland Group PLC or Standard Chartered PLC.
(b) Locate the “Investor relations” website for your preferred bank, and download the most recent
annual report.
(c) Make yourself familiar with the bank’s balance sheet. Have a look at what type of assets are on
the bank’s balance sheet, what type of liabilities, check reserve ratios, capital ratios, etc.
(d) Find the sections of the report where the bank discusses risk management. This is sometimes
referred as “Pillar 3 Report”. Read what types of risk the bank is facing, how it manages those risks
and who is in charge of managing those risks.
(e) Write an essay where you explain your findings and critically appraise the bank’s risk
management practices. Discuss what the bank is doing well and what could be improved.
(f) Imagine that the Bank of England raises interest rates 100 basis points. Simulate the effect that
this increase in interest rates will have on the bank’s assets, liabilities and equity. Discuss your
findings in the essay. Note: The simulation does not have to be carried out for each loan, each bond,
etc. on the bank’s balance sheet. You will have to aggregate into categories and carry out some
approximate simulations.