Reference no: EM131157743

Assignment 1

This is an assignment to be written by each student registered on this module. The allowed word count is 3000 (excluding table of contents and references). The report will carry 50 percent of the overall course mark.Submission'sdeadline ispublished on OnlineCampus. All completed assignments must be submitted through ONLINECAMPUSon or before the published deadline. University rules on late submission apply.

In order to successfully complete this assignment, you need to make extensive use of the relevant literature, both from an academic and practitioner perspective. It is also important to be able to offer an informative and facts based personal view on the issues discussed. Avoid unreliable sources (such as Wikipedia) and base your answers on academic and policy papers, as well as articles from well-respected press (like Financial Times and The Economist). Be concise, succinct but, at the same time, provide well developed arguments.

Your task is to analyse a bank's financial and income statements, before and after the Global Financial Crisis. You need to pick the statements from a bank of your choice (preferably from a British bank or a bank from your country of preference, as long as the statements are available in English), for the years 2007 and 2013 (i.e. the statements before and after the global financial meltdown). Then, using the relevant material from the lectures, try to provide answers to the following questions (please, do not forget to attach the statements as an appendix to your assignment; this appendix will not count to your word limit):

(i) Discuss the purpose of financial reporting and the potential problems that might emerge due to mishandling/misreporting financial data.

(ii) Present and analyze the composition of assets and liabilities of the bank, before and after the global financial crisis of 2007/8. Can you identify any differences, especially in terms of the use of capital and the potential exposures to credit and default risks?

(iii) Using some of the key profitability ratios discussed in the class, provide a comparative discussion of the income statements before and after the financial crisis periods.

(iv) Based on your previous analysis, you are requested to provide some recommendations to the bank's board, on how to improve their performance in the following years. Focus on issues related to profitability, risk exposures, sources of income for the bank, as well as the use of the bank's funds.