This Course Guide has been taken from the most recent presentation of the course. It would be useful for reference purposes but please note that there may be updates for the following presentation.
FIN B388
Banking Systems
FIN B388 Banking Systems is a one-term five-credit Higher Level course. You are advised to have taken the prerequisite course, ECON A232 Introduction to Macroeconomics, before enrolling in this course. The course has been developed with you, the Hong Kong learner in mind, and as such emphasizes both theoretical and practical aspects of the local banking environment.
FIN B388 Banking Systems provides you as a learner with a firm foundation for understanding banking activities and practices in Hong Kong, as well as Hong Kong’s monetary system. The course also describes the major economic concepts, theories and statistics that you will need in order to have a basic understanding of Hong Kong’s banking environment. Since the Hong Kong SAR is an international financial centre, the course also covers important aspects of international banking.
The major aims of this course focus on providing learners with a framework and relevant materials to expand their knowledge and understanding of banking systems — to know their purpose and learn how they work. Since Hong Kong is a major international financial centre it is appropriate to emphasize Hong Kong's financial institutions.
Aims
The course aims to provide learners with essential knowledge of banking and monetary systems. It analyses and interprets monetary policies and problems relating to the development and stability of the banking system in Hong Kong.
Course learning outcomes
Once you have completed this course you should be able to achieve the following course learning outcomes:
Materials
In addition to this Course Guide, the course has the following important components. Please ensure that you have all these materials available.
Study units
The five study units in this course are:
Unit 1 explains the concepts of money, debt, credit, assets, wealth and money supply, as well as the evolution and structure of the banking industry in Hong Kong. The roles of financial intermediation and the business of banking are discussed, as is the money creation process and the relationship between money, banking and the economy.
Unit 2 describes the functions of central banks and the Hong Kong Monetary Authority (HKMA), after which there is a discussion of the management of bank reserves. An explanation of the concept of money base is provided, with the aim of enabling you to analyse the tools of control over monetary supply. In addition, this unit will describe the regulatory framework and bodies of the Hong Kong banking industry.
Unit 3 focuses on illustrating the concept of monetary theory and the theories of interest rate determination and risk structure of interest rates. There is also description of the yield curve and the term structure of interest rates. In keeping with our focus on the local banking system, the structure of interest rates in Hong Kong is explained, with a special look at interest rates under the US dollar link and the HKMA's operations.
Unit 4 first introduces you to the targets and tools of monetary policy in the United States, as well as the monetary system and the currency link in Hong Kong. The second half of the unit discusses the monetary policy of the HKMA and aims to provide you with the ability to appraise the tools of monetary management in Hong Kong.
Unit 5 looks at the functions of international banking and Hong Kong's role as an international financial centre. We discuss international banking risks and explain the procedures used in import/export financing.
Set textbook
There is one compulsory textbook required for FIN B388 Banking Systems:
Mishkin, F S (2021) The Economics of Money, Banking, and Financial Markets, 13th edn, global edn, Pearson.
Audiovisual materials/software
You will need access to a computer with Microsoft Windows/XP/Vista and an Internet browser.
Assignment File
The Assignment File (available on the Online Learning Environment, OLE) provides you guidelines for working on your assignments. You can refer to the Course Guide section on assessment that follows, and to the Assignment File itself for more information.
Presentation Schedule
The Presentation Schedule is available on the OLE. This schedule provides you with the dates for completing assignments, attending live online tutorials and supplementary lectures (pre-recorded videos) and so on.
Assessment
This course is designed to assist you in moving easily from the subject material to the assignments and a two-hour written examination. You are expected to apply concepts and techniques introduced during the course in attempting the assignments. Most problems require qualitative and narrative responses.
There is informal and formal assessment in this course. The informal assessment includes self-assessed activities and self-tests stipulated in each unit. The formal assessment includes two assignments and a two-hour written examination. Assignments must be submitted to your tutor for formal assessment according to the stated deadlines. The non-assessed activities are not part of your formal assessment, but it is very important that you complete all these activities as you work through the units.
Assignments
There are two assignments for this course. Assignment 1 covers topics in Units 1 and 2 (due at the end of Unit 2) and Assignment 2 covers topics in Units 3 to 5 (due at the end of Unit 5). You can find the assignments in your Assignment File (available on the OLE) along with detailed instructions on how to complete them. You are required to complete the two assignments and submit them to your tutor for evaluation and grading. The two assignments together account for 50% of the total grade for the course.
The assignments will help you to develop a better understanding of the banking systems in Hong Kong and will improve your understanding of the subject area in which each assignment is set.
How to submit assignments
You must use word processing software (such as Microsoft Word) to prepare the assignments, and submit the assignments via the Online Learning Environment (OLE). All assignments must be uploaded to the OLE by the due date.
Failure to upload an assignment in the required format to the OLE may result in the score of the assignment being adjusted to zero.
Assignment submission extension policy
The assignment policy of the University as stated in the Student Handbook should be observed. You are required to submit assignments for this course in accordance with the dates communicated by your Course Coordinator. You may apply for a submission extension on the grounds of illness, accident, disability, bereavement or other compassionate circumstances.
Applications for extensions must be submitted online via the OLE. Please note the following:
After an assignment is submitted via the OLE, it is your responsibility to check that the assignment has been successfully submitted. Extension applications due to any problem with uploading will not be accepted. The University cannot accept any responsibility for assignments that are not received by your tutor due to any problem with submission via the OLE. As a precaution, you are advised to keep a copy of each assignment you submit.
According to the University's policy, no extension of the due date will be allowed for the final assignment. This policy will be strictly enforced. Any late submission of the final assignment will result in the score of the assignment being adjusted to zero.
Two-hour written examination
The two-hour written examination is compulsory and conducted on an individual basis. It accounts for 50% of the total course mark. During the two-hour written examination, you will be asked questions about your assignments and/or self-tests in the course materials. You are required to undertake the two-hour written examination according and you will fail the course automatically regardless how you have performed in your assignments should you do not attempt the two-hour written examination.
Course marking scheme
The structure of the course marking scheme is summarized in the following table. Assignments account for 50% of the total course mark and the two-hour written examination accounts for the remaining 50%. To be assured of achieving a pass result, you must obtain a pass for both the total course mark and the two-hour written examination mark.
For more information on the University's policies on assignments, refer to HKMU's Student Handbook.
| Assessment type | Units covered | Marks |
| Assignment 1 | Units 1-2 | 25% |
| Assignment 2 | Units 3-5 | 25% |
| Final examination | Units 1-5 | 50% |
| Total | 100% | |
The following table gives a general overview of the course structure. It suggests the amount of time you should allow for completing units and provides a broad schedule for you to plan your work. These times are intended as a guide only and should be adjusted to fit your personal needs more closely. You will need about 10 hours per week to work through the course. This estimation includes time for reading the units, completing activities, self-tests and assignments, attending tutorials, surgeries and supplementary lectures, and preparing for your two-hour written examination.
| Unit | Title | Study time (weeks) | Assessment item |
| 1 | Introduction to money and banking | 3 | Assignment 1 |
| 2 | Banks, central banks and banking regulations | 3 | |
| 3 | The monetary theory and interest rates | 3 | Assignment 2 |
| 4 | Formulating and implementing monetary policy | 3 | |
| 5 | International banking | 3 | |
| Revision | 1 | Two-hour written examination | |
| Total | 16 |
Your assignments will be marked and commented on by your tutor, who will keep an eye on your progress and assist you if you encounter problems during the course. Marked assignments will be returned to you as soon as possible.
There are a total of five units in this course. Each of the five units consists of between three to four weeks of work and includes specific objectives, directions for study, commentary on the activities, and summaries of key concepts and techniques. The units direct you to work on exercises and activities related to the material covered. They can both help you gauge your progress and reinforce your understanding of the material covered in the unit. More importantly, they give examples to help you fully understand the concepts presented in the text, and can assist you in applying these concepts and techniques in your working environment. Together with the assignments, these activities will assist you in achieving the learning objectives of the individual units of the course. Also, you can read quality journals, websites and newspapers on related issues and events in banking to keep pace with the latest developments.
Please note that the biggest temptation that students face, when they are short of time, is just to read the course materials. When they get to a learning activity or self-test, they flip straight to the back of the study unit to see the suggested answer. This saves time and students still know the correct answer, right? Wrong! Terribly wrong! Many contemporary educationists believe that learning is not a process that happens when people listen to a lecture or read a book passively. They think that learning takes place as people actively construct knowledge. Do not take a shortcut that compromises your learning. Attempt the learning activities and self-tests presented in the study units.
When done properly, working with fellow students on difficult learning activities or assignments can be beneficial. However doing so without acknowledging the contributions of other students in your own work is plagiarism. It has happened that after enough cosmetic changes have been made, the act of cheating may not be caught by the tutor who is marking the assignment. But in this case, the student's learning will suffer. Be an honest student.
Tutors, live online tutorials and supplementary lectures (pre-recorded videos)
Your assignments will be marked and commented on by your tutor, who will keep an eye on your progress and assist you if you encounter problems during the course. Marked assignments will be returned to you as soon as possible.
It is a good practice to keep a copy of each assignment submitted for marking, so that you can always refer to queries with the tutor during discussion. Please contact you tutor should the following arise:
Apart from self-study, live online tutorials, live online surgeries and supplementary lectures (pre-recorded videos) will also be organized to assist you in your learning process. Details of these learning sessions as well as the name, email address and phone number of your tutor will be sent to you in due course.
It is strongly recommended that you attend all the live online tutorials and surgeries, and watch all the supplementary lectures (pre-recorded videos), which will provide considerable assistance in your study of this course. Moreover, you will have the chance to meet fellow students and be with other distance learners who are studying at HKMU.
While you may think you are studying on your own, it doesn't need to be that way. You can be in regular contact with your tutor and, once you've met for the first tutorial, you can be in contact with your fellow students. Make a point, when you meet fellow students, to exchange phone numbers or email addresses. In this way, you will be well on the way to developing a learning network of your own.
Live online tutorials, live online surgeries and supplementary lectures (pre-recorded videos) will be held throughout the course. They will be based on the major course units and tutors may also introduce further explanation, examples and readings. Full details are given in the Presentation Schedule.
Compared to the mega classes attended by hundreds of students in a typical university, the live online tutorials with 30 students or so at HKMU provide a good opportunity for you to meet your classmates and to get to know your tutor. You will find that support and encouragement from classmates and tutors are very helpful.
Attendance in live online tutorials is optional but you are urged to take advantage of them. You can get the most from the tutorials by pre-studying the relevant materials, making comments and asking questions. Remember that learning does not happen passively. Your active participation in the tutorials is crucial.
FIN B388 Banking Systems is designed to provide you with a firm foundation for understanding banking activities and practices in Hong Kong, as well as Hong Kong's monetary system. There is also a focus on describing the major banking and economic concepts, theories and statistics that you will need in order to have a basic understanding of Hong Kong's banking environment, as well as a discussion of the Hong Kong SAR as an international financial centre and important aspects of international banking.
To understand the content of this course you will need to analyse the course materials and apply the concepts and techniques you are learning. I hope you will find FIN B388 Banking Systems interesting and engaging, and more importantly, that you will be able to use the knowledge and skills acquired from this course throughout your career or even your daily life. I wish you every success in your study and hope you enjoy the course.
Bob Leung Wai-ho has worked with major international banks in Hong Kong and Australia for many years. Besides retail banking where he started his banking career, he also worked in private banking, private trust and wealth management departments in various banks. Before returning to his family business, he was an investment manager of a USD120M private portfolio. Currently, Mr Leung is a senior lecturer of the University.
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