BFF2401 Commercial Banking and Finance Individual Assignment Semester 1 2025 | MU
Question 1 (6 marks, ~300 words):
“Banks face an important trade-off between risk and return in their decision to use stable sources of liability funding.”
Evaluate the above statement in the context of commercial banks’ liability management. Your answer must be supported with specific real-world examples of one (1) stable liability instrument and one (1) non-stable liability instrument.
Question 2 (18 marks, ~500 words):
2a. Choose one (1) type of banks’ stable liability funding and one (1) type of banks’ non-stable liability funding, and find annual (yearly) data to calculate the percentages of each liability source for each of the top four Australian banks for the 2018-2024 period. Generate two (2) line graphs for the calculated liability percentages (one for each liability source). (8 marks)
2 B. Conduct peer and trend analyses based on each of your graphs. Your analyses must be supported with specific real-life evidence related to these liability management approaches. (10 marks)
NOTE: All tables of original dollar figures, formulas/workings and calculated percentages/ratios, as well as two (2) line graphs, must be presented in Part 2a. Your graphs must be fully labelled and professionally formatted, and displayed.
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Question 3 (10 marks, ~300 words):
3a. Choose one (1) measure of credit (default) risk associated with banks’ lending activities, and find annual (yearly) data to calculate this credit risk ratio for each of the top four Australian banks for the 2018-2024 period. Generate one (1) one-line graph for the calculated credit risk ratio. (4 marks)
3 B. Conduct peer and trend analyses based on your graph. Your analyses must be supported with specific real-life evidence related to these banks’ credit risk management strategies. (6 marks)
NOTE: All tables of original dollar figures, formulas/workings and calculated percentages/ratios, as well as one (1) line graph, must be presented in Part 3a. Your graph must be fully labelled and professionally formatted, and displayed.
Question 4 (12 marks, ~600 words):
4a. Detail two (2) government or regulatory responses to assist Australian banks in their access to funding over the past five years. Assess whether these responses have been effective. (6 marks)
4 B. Detail two (2) regulatory or government support initiatives in response to potentially rising loan defaults due to the COVID-19 financial challenges and recent inflationary pressure. Evaluate whether these policies have had any effect on Australian banks’ credit risk exposure. (6 marks)
Introduction and Conclusion (4 marks):
Approximately 300 words are recommended for the introduction and conclusion together.
Suggested data source for Questions 2 and 3: Banks’ annual reports and Basel III Pillar 3 regulatory disclosure reports published on their websites.
Required format: 1.5-line spacing and 12-point font. Detailed and informative subheadings must be used to separate the four questions and different sections.
Total marks: Question 1 (6 marks) + Question 2 (18 marks) + Question 3 (10 marks) + Question 4 (12 marks) + Introduction and Conclusion (4 marks) = 50 marks.
Possible deductions: Referencing and/or formatting issues (deduction of up to 4 marks); Late penalty (deduction of 5% per calendar day late); Penalty for Turnitin percentage above 20% (depending on nature of similarity)