Finance 549D
SPECIAL TOPICS: FINANCIAL INSTITUTIONS
2004 Fall A Mini-Course
William R. Emmons, Adjunct Professor
Economist, Federal Reserve Bank of St. Louis
Tel: 314-444-8844; Fax: 444-8740
E-mail (Olin address is preferred):
emmons@olin.wustl.edu or emmons@stls.frb.org.
Class meetings:
Olin office:
Hours:
109 Simon Hall
MW 4:00-5:30 p.m.
278 Simon
Tel: 935-6337
By appointment
Course description
As part of a small management team, you will control all aspects of a commercial bank in a
realistic competitive simulation. You will learn the fundamentals of bank profitability and how
to manage your bank effectively.
Your performance in the course will be measured both individually and as a member of your
management team. Individual grades (70%) will be assigned for presentations you make to the
class of your bank’s strategies and results, and on the basis of an in-class midterm exam. Group
grades (30%) will be assigned according to the performance of your bank in the banking
simulation and on the basis of an “Annual Report” prepared by your management team for your
bank’s “shareholders.”
Class meetings (12), classroom presentations (2), exam (1), and group paper (1)
• Class meetings introduce you to important banking concepts and terms, give you time to
formulate and implement strategies for your bank, and allow you to make presentations to the
class on some aspect of your bank’s strategy and performance.
• Each student will make two brief presentations to the entire class. You will make a
presentation (worth 20 percent of your grade) of some aspect of your bank’s strategy on
Monday, September 27. You will make another 20-point presentation analyzing some aspect
of your bank’s performance on Wednesday, October 20, during your bank’s “Annual
Shareholder Meeting.”
• There will be one open-book, open-note mid-term exam worth 30 percent of your course
grade. This 60-minute exam will be Monday, October 4.
• Each management team will prepare a group term paper in the form of an “Annual Report”
that describes the bank’s performance, due by Friday, October 22, 2003, at 5;00 p.m.
1
John M. Olin School of Business
SPECIAL TOPICS: FINANCIAL INSTITUTIONS
Fall 2004
Grading
Grades will be assigned on the following basis (individual or group as indicated):
Banking concepts
Mid-term exam on banking concepts (individual)..……………….......30%
Bank simulation
Mid-term presentation of your bank’s strategy (individual)……...........20
Final exam: Analysis of your bank’s performance (individual)............20
Term paper: “Annual Report” (group)………………..………..……..20
Your bank’s final standing (group)……………………………….……10
100%
Outstanding team member(s) (individual)…....………….2
(Each team will receive two points of extra credit that it
may award to any team member or members in any way
they choose at the end of the term.)
Honor code
The honor code applies to all aspects of this course, inside and outside the classroom. Prompt
self-report of any possible violations will mitigate the impact of reported violations on your
grade.
Course Readings (in course packet at bookstore)
The Stanford Bank Game, Version 11, “Players’ Manual,” Executive Edition, 2000.
Additional Readings (passed out in class or available on Blackboard)
Carlson, Mark and Roberto Perli, “Profits and Balance-Sheet Developments at U.S. Commercial
Banks in 2003,” Federal Reserve Bulletin 90 (2004), Second Quarter, No. 2, pp. 162-191.
2
John M. Olin School of Business
SPECIAL TOPICS: FINANCIAL INSTITUTIONS
Fall 2004
Session
Date
Topics and activities
Readings to prepare for class
Week 1
0
Sept 6
Labor Day (no class)
1
Sept 8
¥
¥
¥
¥
Course overview.
Introduction to the Stanford Bank
Game.
Fundamentals of bank profitability.
Team organizational meeting.
¥
Syllabus.
¥
Players’ Manual, pp. 3-18.
Managing your bank.
Period 1.4 and 2.1 positions.
Financial statements.
Team meeting: Period 2.2 inputs
due at end of class (trial period).
¥
Players’ Manual, pp. 19-46.
The decision form.
Team meeting: Period 2.3 inputs
due at end of class (trial period).
¥
Players’ Manual, pp. 49-71.
¥
Players’ Manual, pp. 75-92.
¥
Optional reading: Players’
Manual, pp. 95-112.
Week 2
2
Sept 13
¥
¥
¥
¥
3
Sept 15
¥
¥
Week 3
4
Sept 20
¥
¥
¥
5
Sept 22
¥
¥
Year 2, Quarter 1 position.
Sources and uses of funds.
Team meeting: Period 2.2 inputs
due at end of class (official game
begins).
Sources and uses of funds.
Team meeting: Period 2.3 inputs
due at end of class.
Week 4
6
Sept 27
¥
Bank strategy presentations.
3
7
Sept 29
¥
Team meeting: Period 2.4 inputs
due at end of class.
¥
Sources and uses of funds.
Review for midterm exam.
Team meeting: Period 3.1 inputs
due at end of class.
¥
¥
Week 5
8
9
Oct 4
Oct 6
¥
Midterm Exam.
¥
Team meeting: Period 3.2 inputs
due by Oct. 9.
No class.
Week 6
10
Oct 11
¥
¥
¥
11
Oct 13
¥
¥
Review midterm exam.
Profitability and balance-sheet
trends at US banks in 2003.
Team meeting: Period 3.3 inputs
due at end of class.
Recent developments at US banks in
2003.
Team meeting: Period 3.4 inputs
due at end of class.
¥
Week 7
12
Oct 18
¥
¥
¥
13
Oct 20
¥
Oct 22
¥
Recent developments at US banks in
2003.
Team meeting: Period 4.1 inputs
due at end of class.
Prepare for Annual Shareholder
Meetings.
Final Exam:
Annual Shareholder Meetings.
Annual Report due by 5:00 p.m.
4
¥
Carlson and Perli, pp. 162177.
¥
Carlson and Perli, pp. 178180.