module specification

FE5006 - Bank Lending and the Legal Environment (2021/22)

Module specification Module approved to run in 2021/22
Module status DELETED (This module is no longer running)
Module title Bank Lending and the Legal Environment
Module level Intermediate (05)
Credit rating for module 30
School Guildhall School of Business and Law
Total study hours 300
9 hours Assessment Preparation / Delivery
210 hours Guided independent study
81 hours Scheduled learning & teaching activities
Assessment components
Type Weighting Qualifying mark Description
Group Presentation 30%   Group presentation - 10 minutes
In-Course Test 20%   In-Class Test - 1 hour
Unseen Examination 50%   Open unseen written examination - 2 hours
Running in 2021/22

(Please note that module timeslots are subject to change)
No instances running in the year

Module summary

The module enables the appreciation of the nature of the contexts in which bank lending can be seen to be operating. It enables the development of expertise in the use of Bloomberg and other sources to evaluate borrower credit-worthiness and fosters team-working and presentation skills within a group setting. It provides the theoretical and practical framework for analysing and evaluating the principles and practices of bank lending within the legal environment.  It focuses on credit granting, credit evaluation and credit monitoring and credit risk management in the Autumn semester, and on the principles of English Law as it applies to the banker-customer relationship in the Spring semester.


Bank lending
Principles of credit risk management LO1
The credit granting process: credit analysis and evaluation;
Credit scoring; credit rating agencies

Types of bank finance; 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 environment LO3
Nature and sources of the law relating to banking and finance
Elements of the law of contract
Nature and scope of the banker/customer relationship
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

Balance of independent study and scheduled teaching activity

The balance of independent study and scheduled teaching activity within the module is indicated in the section below.

The Synergy suite and Bloomberg lab are used to promote interactive learning. The virtual learning environment (WebLearn) that supports the module contains relevant learning and teaching materials such as lecture slides, seminar questions, case studies, guideline answers to case studies and seminar questions, past examination paper, assessment strategy, coursework brief, assessment and grading criteria, deadlines and feedback details.

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

Learning outcomes

On successful completion of the module, students will be able to:

1. Evaluate borrower credit-worthiness within a group context, using and analysing data available from Bloomberg and other 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 financial institutions are required to operate

Assessment strategy

Diagnostic and formative assessment will take place on a weekly basis 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.

Formative and summative assessment will take place with presentations in weeks 7-9 Students will be required to undertake a group research activity using Bloomberg as well as academic journals, culminating in a presentation on a stipulated topic in relation to any one bank.  The presentations will be 10 minutes in duration with approximately 2-4 minutes allocated for each individual student, and will be undertaken during the class hours.

Summative assessment will take place with a one-hour In-Class Test in week 15. This assessment will test students’ knowledge and understanding and ability to undertake numeric exercises to evaluate bank lending decisions.

Summative assessment will take place between weeks 29 to 30 with a 2-hour seen written examination which will be focusing on knowledge-based skills,
research skills, problem-solving skills, analytical skills and written communication.



Core Texts
De Freitas, J. D. (2011) “Business Law” 8 Ed (Castlevale), Wildy & Son (Law Booksellers), Lincoln’s Inn Archway Carey Street, EC2
Lee, N. (2008) ‘Principles of Lending’, published by the ifs (institute of financial services) School of Finance, incorporated by Royal Charter, Canterbury with ISBN:  978-1-84516-751-6, and by Global Professional Publishing, London with ISBN: 978-1-906403-20-1
Lee, N. and Lee, V.J. (2018 forthcoming) Bank Lending: Theory 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
Cranston, R. (2014) ‘Principles of Banking Law’ 3rd Ed, Oxford University Press, Oxford
Davies, H. and Green, D. (2013) ‘Global Financial Regulation: The Essential Guide’ John Wiley and Sons
Ellinger, E. P., Lomnicka, E. and Hare, C. V. M. (2011) ‘Ellinger's Modern Banking Law’ 5th Ed., Oxford University Press, Oxford.
Financial Conduct Authority (2017) ‘Consumer Credit sourcebook’ in Chapter 5 Responsible Lending Release 18 Jul 2017
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

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

Bank for International Settlements:
The Financial Conduct Authority:
Bank of England / PRA:
HM Treasury:
Financial Conduct Authority:
Bank of England; Prudential Regulation Authority:

Electronic Databases:
Science Direct
Emerald Management eJournals