[Solution]Monetary Baking and Finance

This is an individual assignment and each student is assigned with one of three major European Banks. In particular students having an ID that ends…

This is an individual assignment and each student is assigned with one of three major European Banks. In particular students having an ID that ends in 1,2 or 3 will be assigned HSBC Bank (HSBA LN Equity), students having an ID that ends in 4,5 or 6will be assigned BNP Paribas Bank (BNP FP Equity) and students having an ID thatends in 7,8,9 or 0 will be assigned Deutsche Bank(DBK GR Equity).Required:Part 1 (200 words)Download the relevant data from Bloomberg required to compute the CapitalAdequacy, Profitability and Liquidity ratios for the last 12 years (2007-2018) for:a) the Bank you are assignedb) its main national competitors (preferably the 2 largest competitors); and its maincompetitors in the global market (2 global competitors).Show your findings in tables and comment briefly about these findingsPart 2 (250 words)Examine how much and why the company’s profits have been affected by:a) the 2007-2009 global crisisb) the US Quantitative Easing (QE)c) the UK QE andd) the ECB QE3 | P a g eShow your findings in tables, mention the steps taken to compute them and commentbriefly about these findingsPart 3 (200 words)Define the degree of Liquidity Risk, Capital Risk, Interest Rate Risk and Credit Risk ofthe Bank you analyse based on ratio analysis; and compare your bank to the otherinternational banks in your sample during the last five years, based on ratio analysisand the information provided in annual reports, macroeconomic data and publishednews. Please make sure that you show your findings in tables, mention the steps takento compute them and you comment briefly about these findingsPart 4 (250 words)Compute the effect of shocks over the bank you analyse. Shocks will be those asexamined in:a) EBA stress tests andb) Bank of England stress tests, regarding GDP growth change.Show your findings in tables, mention the steps taken to calculate the effect, andcritically evaluate the ability of the company to withstand a shock in GDP growth.Part 5 (200 words)Compute the additional capital the company may need in the following 4 years (2020-2023) to be able to cover regulatory needs as described in Basel Accords based on ascenario that assumes EBA stress tests and a scenario that assumes Bank of Englandstress tests regarding shocks in GDP growth. Again, show your findings in tables,mention the steps taken to compute them and briefly comment about these findingsPart 6 (400 words)Propose any suggestions regarding the bank’s management strategy so as tominimise risks and maximise profitability. Critical discussion should include referenceto both books and published papers in academic journals.
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