module specification

The module enables the appreciation of the nature of the contexts in which lending can be seen to be operating. It enables the development of expertise in the use of software that may include Excel and Bloomberg to evaluate borrower creditworthiness. It provides the theoretical and practical framework for analysing and evaluating the principles and practices of lending.  It focuses on credit granting, credit evaluation, credit monitoring and ensuring adequate controls over credit risk.

Lending and the evaluation of borrower creditworthiness, using and analysing data available from a range of sources  - LO1

Principles and processes of credit risk management
The credit granting process: credit analysis and evaluation;
Credit scoring; credit rating agencies

Types of bank finance - LO1 & LO2
Types of security; evaluation of security
Personal lending: overdrafts; loans and mortgages; credit cards
Small business lending: approach, appraisal and control
Corporate lending: Working capital finance: cash operating cycle; cash forecasts and budgets; Long-term finance: capital gearing and operating gearing
Monitoring, control and follow-up: loan review procedures; overtrading and overcapitalisation
Controlling loan losses; loan securitisation; debt restructuring; debt write-off 
Alternative forms of financing: leasing and hire purchase, invoice discounting and factoring,
Ethical issues in bank lending: fraud, misrepresentation, misselling, money laundering, monopoly power

The legal and regulatory environment within which lending takes place - LO3
The regulation of consumer credit
The law on data protection
The role of financial regulators such as the Prudential Regulation Authority and the Financial Conduct Authority

Scheduled learning and teaching for this module comprise face-to-face contact hours consisting of weekly 2-hour lectures and 1-hour seminar. The virtual learning environment (Weblearn) supports the relevant module learning and teaching materials such as lecture slides, seminar questions, case studies, guideline answers to case studies / seminar questions, past examination paper, assessment and grading criteria, deadlines and feedback details.  The Barco suite and Bloomberg lab may be used for specified seminar sessions to promote interactive learning.

Students are encouraged to reflect on their learning development through seminar participation, feed-forward and feedback sessions.

On successful completion of the module students will be able to:
1. Evaluate borrower creditworthiness, using and analysing data available from a range of sources
2. Demonstrate a critical appreciation of the processes of credit granting, credit monitoring, credit risk management and credit control in relation to the personal, SME and large corporate sectors.
3. Demonstrate a critical awareness of the legal and regulatory environment within which lending takes place

Diagnostic and formative assessment will take place in seminars to develop understanding as well as theoretical, analytical, interpersonal and communication skills.

By Week 2, students will be given a formative assessment task to be submitted in Week 4.
In Week 4, students will be required to submit the formative assignment that they received in Week 2.
In Week 5, students will receive feedback on their formative assignment and they will be asked to reflect on their feedback. This will support and develop their learning and will help them in preparing for the summative assignment.
In Week 6, students will have the opportunity to discuss the formative assessment feedback in class.

Summative assessment will take place in weeks 13-15 with a 2-hour unseen written examination.

Books

Core Texts
Lee, N. and Lee, V.J. (2018) Bank Lending: Principles and Practice, Gosbrook Professional Publishing, Reading
Roberts, G. and Keller, A. (2015) ‘Law Relating to Financial Services’ Global Professional Publishing, Cranbrook, Kent

Other Texts
Buckley, A. (2011) ‘Financial Crisis: Causes, Context and Consequences’ Pearson Education, Harlowe
Davies, H. and Green, D. (2013) ‘Global Financial Regulation: The Essential Guide’ John Wiley and Sons
De Freitas, J. D. (2011) “Business Law” 8 Ed (Castlevale), Wiley & Son (Law Booksellers), Lincoln’s Inn Archway Carey Street, London
Financial Conduct Authority (2020) COVID-19 Credit Cards and Personal Loans Instrument 2020/16
Financial Conduct Authority (2017) ‘Consumer Credit sourcebook’ in Chapter 5 Responsible Lending Release 18 Jul 2017 www.handbook.fca.org.uk
Lee, N. (2008) ‘Principles of Lending’, published by the ifs (institute of financial services) School of Finance, incorporated by Royal Charter, Canterbury, and by Global Professional Publishing, London
Onyiriuba, L. and Ikpefan, O. A. (2018) ‘Principles and practice of bank lending’ NFS Data Bureau Ltd Lagos, Nigeria, and the USA
Rouse, N. and Watson, C. (2017) ‘Applied Lending Techniques', Global Professional Publishing, Cranbrook, Kent
Saunders, A & Allen, L (2010) ‘Credit Risk Management: In and Out of the Financial Crisis’, 3rd Ed., John Wiley & Sons Inc. New Jersey

Journals:
Financial Services Review
Journal of Banking and Finance
The Journal of Commercial Lending
Journal of Credit management
Journal of Financial Economics
Journal of Financial Intermediation
Journal of Financial Regulation and Compliance
Journal of Financial Research
Journal of Financial Services Research
Journal of International Banking Law
Journal of Money, Credit and Banking
The Journal of Finance
The Journal of Lending and Credit Risk Management

Professional Journals/Newspapers:
Financial Times
Financial World
The Banker

Policy Paper:
Bank for International Settlements (2000) Principles for the Management of Credit Risk, Basel Committee on Banking Supervision, Basel http://www.bis.org/publ/bcbs75.htm

Websites:
Bank for International Settlements: www.bis.org
The Financial Conduct Authority: www.fca.org.uk
Bank of England / PRA: www.bankofengland.co.uk/PRA/
HM Treasury: www.gov.uk/government/organisations/hm-treasury
Bloomberg: www.bloomberg.com/
Financial Conduct Authority: https://www.handbook.fca.org.uk/
Bank of England; Prudential Regulation Authority: https://www.bankofengland.co.uk/prudential-regulation/policy

Electronic Databases:
Science Direct
Emerald Management eJournals
IngentaConnect