State University of New York at Buffalo

School of Management
MGF 661 F1F (Mon, Wed. 8:00 9:20am)
Instructor: Sudhir Suchak
Management of Financial Institutions
Telephone: 645-1781
Fall 2016: Alfiero 104
email: suchak@buffalo.edu
Office Hours: Tues. & Thurs. 1:30 3:00pm, or by appointment (Office: Jacobs 235)
Course Objective: The Financial Services industry is very dynamic. Factors such as
regulations, changes in interest rates and overall market and credit factors have a
significant impact on the financial institutions performance. The purpose of this course is
to study the basic management problems in the loan, investment, and financing
administration functions of financial institutions. A significant emphasis will be on the
commercial banks. Our focus will be on asset, liability and capital management. We will
discuss risk management for changing interest rates and how financial institutions utilize
hedging tools to mitigate this risk. We will also discuss how banks measure and evaluate
financial performance.
Learning Objectives:
1) Students will learn about the structure of financial services industry including
bank holding companies in the US and globally.
2) Students will review and participate in the discussion of how bank financial
performance is measured and evaluated.
3) Students will understand assets and liabilities management by banks, and how
financial institutions manage interest rate risk.
4) Students will make decisions through evaluating credit risk by first learning
business and credit lending functions, followed by a case study assignment using
a real life model to evaluate credit risk.
5) Students will develop skills on how financial institutions utilize financial futures,
options, swaps and other hedging tools in asset/liability management and in
minimizing interest rates risk.
6) Students will demonstrate proficiency in international trade and foreign exchange
including providing a solution for a company involved in international trade
transaction, through a case study assignment.
7) Students will learn key regulatory capital requirements and how financial
institutions in the US and globally manage capital.
8) Students will review other wealth management products such as insurance,
mutual funds, and annuities and why financial institutions offer these products.
Prerequisites: MGF 631 or MGQ 606

MGF 661 F1F

Required Textbook: Bank Management & Financial Services by Peter S. Rose and
Sylvia C. Hudgins, 9th ed. McGraw-Hill. You may purchase the textbook customized by
McGraw-Hill for UB available at a slightly lower cost in the UB bookstore. In the
customized version, at the end of each chapter powerpoint slides are included for your
convenience.
Powerpoint Slides: Powerpoint slides for each chapter covered are also posted on
UBLearns. Students will be responsible for having these slides in class in order that they
can follow the materials and take appropriate notes. Solutions to all problems will be
posted throughout the semester after the chapters are covered
Grading:
Mid-term Exam 25%
Case # 1 20%
Case # 2 20%
Final Exam 35%
The exams are non-cumulative and will include a combination of multiple choice
questions and quantitative problems.
Out of Class Assignments: Two cases will be assigned as out of class assignments
where students will work in groups. A clear, concise typed report is to be prepared for
submission to the instructor. These are real world cases providing students with practical
understanding and comprehension of how commercial banks handle in practice concepts
identified in the cases.
Grading Scale is based on total points (weighted) for the 2 cases and 2 exams as follows:
A
AB+
B
B-

95+
91 94
88 90
85 87
81 84

C+
C
D+
D
F

75 80
71 74
65 70
60 64
0 59

Incomplete Grade: A grade of incomplete (I) indicates that additional coursework is

required to fulfill the requirements of the course. Students will only be given an I grade
if they have a passing average in coursework that has been completed and have welldefined parameters to complete the course requirements that could result in a grade better
than the default grade. An I grade is not assigned to a student who did not attend the
course. The instructors approval is required and assignment of an I grade is at the
discretion of the instructor. Students should refer to the Policies and Procedures section
in the Undergraduate Catalog.
MGF 661 F1F

Reading Assignments: Reading materials will be assigned for each class as shown in
the attached. In the class we will briefly review and discuss key points from the chapters
and work on questions and problems. Students are expected to thoroughly review the
chapters covered before coming to class and have worked on the questions and problems
assigned. Students are expected to participate in answering questions and in solving the
problems.
Attendance: Students are required to attend all classes. Substantial amount of material is
covered in each class which is useful particularly during exams. Many of the examination
problems and questions are based on material covered in class. Attendance will be taken
within the first 10 minutes at the beginning of the class.
Accommodations for Students with Disabilities: If any student has a disability
(physical or psychological) and require exceptional accommodations to enable the
student to participate in the class, such as note takers, readers, or extended time on
exams, please contact the Office of Disability Services in Capen Hall, 645-2608.
Standards of Academic Integrity: All students are expected to support and maintain a
high standard of academic integrity. Students should refer to the Policies and Procedures
section in the Undergraduate Catalog.

MGF 661 F1F

Agenda (subject to potential changes)

Date

Chapter

Aug. 29
Aug. 31
Sept. 7

Ch. 1
Ch. 3

Sept.12, 14,

Ch. 6

Sept. 19, 21
Sept. 26

Ch. 7

Sept. 28
Oct. 3
Oct. 5
Oct. 5, 10
Oct. 12

Ch. 16
Ch. 17

Oct. 17, 19
Oct. 26
Oct. 24, 26

Ch. 8
Oct. 31

Topics

Questions/Problems

An Overview of the Changing Financial Services Sector

The Organization & Structure of Banking and
Financial Services Industry
Prob. 1, 2
(Ignore pp. 76, 77, 90, 91)
(Ignore slides 23, 38)
Measuring & Evaluating the Performance
of Banks and their Principle Competitors
Prob. 3, 4
(Ignore pp. 181, 189 192)
(Ignore slide 24, 28)
Risk Mgmt. for Changing Interest Rates,
Prob. 8, 9
Asset, Liability Mgmt & Duration Techniques
(Ignore pp. 220 222, 236 - 247)
(Ignore slides 7 - 13, 35 - 46)
Mid-term Exam (Ch. 1, 3, 6, 7)
Lending Policies and Procedures
(Ignore pp. 542 - 545), (Ignore slides 21 - 25)
Assign Case # 1 (Due Oct. 26)
Lending to Business Firms and Pricing Business Loans
(Ignore pp. 577 - 584)
(Ignore slides 33 - 40)
Brief review of case study with groups (Students should
come prepared with questions)
Case Study Due
Risk Mgmt: Financial Futures, Options, Swaps Prob. 4, 5
and Other Hedging Tools in Asset/Liability

Management
Nov. 2
Nov. 7
Nov. 9
Nov. 9, 14, 16, 21
Nov. 30
Nov. 28, 30

Ch. 15

Dec. 5, 7

Ch. 14

Dec. 12

(Ignore pp. 266, 269, 273, 275, 276, 280 - 282)

(Ignore slides 21, 22, 24, 25, 28, 31, 33, 35, 41)
International Trade & Foreign Exchange
(Materials posted on UBLearns)
Students review materials posted on-line on UBLearns
Assign Case # 2 (Due Nov. 30)
International Trade & Foreign Exchange (continued)
(Materials posted on UBLearns)
Case Study Due
The Management of Capital
Prob.5, 6
(Ignore pp. 508 - 512) , (Ignore slides 35 - 38)
Investment Banking, Insurance and other
Sources of Fee Income
Final Examination (Ch. 8, 14, 15)