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EC3028: Money and Banking

Written Assignment

2022

Questions

PART A (60 points)

(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) Familiarise yourself with the bank’s balance sheet. 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 that discuss risk management. This is sometimes referred as the “Pillar 3 Report”. What does the report say about the types of risk the bank is facing? How is it managing those risks? Who in the bank is responsible for managing those risks?

(e) Explain your findings in an essay. Incorporate in your analysis the material we have studied in the module so far, and critically appraise the bank’s risk management practices. Discuss what you think the bank is doing well and what could be improved. Again, your discussion should be informed by the content of module EC3028, for example topics such as financial structure, asset-liability management, liquidity management, risk management, capital adequacy, compliance with Basel regulations, etc.

PART B (40 points)

(a) Compute the price of the following bonds: