Financial intermediaries, financial statements and supervision
Lecturer
prof. aggr. Alberto Dreassi alberto.dreassi@uniud.it
Credits
9 CFU
Department
Department of Economics and Statistics
Aims
The course aims to provide students with a basic knowledge of financial statements and supervision of financial intermediaries, in particular banks and insurance companies.
Contents
Introduction
Evolution of business models of banks, insurance companies and financial conglomerates
Managing equilibriums of banks, insurance companies and financial conglomerates
Overview of IAS/IFRS and their relevance for financial intermediaries
Part I: banking supervision
Prudential supervision within Basel 1
Addendums to Basel 1: market risks
Basel 2: capital, solvency ratios, risk management, ICAAP/SREP and market discipline
Contents and future developments of Basel 3
Case study: mutual guarantee credit institutions in the Italian market and their prudential supervision
Part II: bank accounting
Business areas and accounting treatment
Historical evolution of banking accounting and innovations of IAS/IFRS
Structure of balance sheet, income statement, notes to the accounts and other attached documents
Main entries of banking balance sheets and income statements
Accounting for financial instruments: IAS 32, IAS 39, IFRS 7
Overview of IFRS 9: evolution of IAS 39
Overview of IAS 40: real estate investments
Consolidated accounts: methods and contents
Part III: insurance supervision
International standards and contributions of the International Association of Insurance Supervisors (IAIS)
Solvency margin and prudential supervision within Solvency 1
Supplementary supervision on insurance groups
Solvency 2: main contents, principles, expected impacts emerging from QIS, open issues
Part IV: insurance accounting
Business areas and accounting treatment
Historical evolution of insurance accounting and innovations of IAS/IFRS
Statutory accounting principles at the entity level: structure, contents and valuation issues in the Insurance Accounting Directive (IAD)
IAS/IFRS accounting and consolidated accounts: structure, contents and valuation issues
Accounting for insurance contracts: IFRS 4 Phase 1
Evolution of IFRS 4 Phase 2: main contents and open issues
Part V: financial conglomerates
Supplementary supervision on financial conglomerates
Methods of calculation of supplementary supervision on financial conglomerates
Notes
From academic year 2013/14 lectures, references and assessment will be in English. Students that attended in previous years are encouraged but not compelled to adjust to this new standard.
Pre-requisites
The contents of “Insurance and banking law” and “IFRS reporting of enterprises and groups” are assumed as pre-requisites.
Seminars and assignments
Subject to their availability, this course hosts several contributions of professionals and experts from banks and insurance companies to provide insights on specific topics met during class activities. To prepare attending students, further activities are possible on a voluntary base (individual and/or group assignments).
References
Note for non-attending students: readings should be agreed with the lecturer among those listed as suggested.
Suggested readings
- PwC, 2009, “Financial instruments under IFRS – A guide through the maze”, Third Edition, URL= http://tinyurl.com/llc7ngs
- KPMG, 2004, “Insurance accounting under IFRS”, URL= http://tinyurl.com/m3qvulr
- KPMG, 2011, “IFRS Practice issues for banks: loan acquisition accounting”, URL= http://tinyurl.com/m3tgqvy
- Sandström A., 2006, “Solvency – Models, Assessment and Regulation”, Chapman&Hall/CRC, New York
- Chofaras D.N., 2012, “Basel III, the devil and global banking”, Palgrave-MacMillan, Basingstoke
- Tarullo D.L., 2008, “Banking on Basel – the future of international financial regulation”, Peterson Institute for International Economics, Washington DC.
Regulatory references (see above for foreign students)
- BANKING SUPERVISION
- Capital Requirements Directives (CRD) – Directives 2006/48/EC, 2006/49/EC, 2009/111/EC, 2010/76/EU
- BCBS, 2006, “Basel II: International Convergence of Capital Measurement and Capital Standards: a Revised Framework – Comprehensive Version”, URL=www.bis.org/bcbs
- BCBS, 2011, “Revisions to the Basel II market risk framework – Updated as of 31 December 2010”, URL=www.bis.org/bcbs
- INSURANCE SUPERVISION
- Solvency 1 - Directives 2002/83/EC, 2002/13/EC
- Supplementary supervision on insurance groups – Directive 98/78/EC
- Solvency 2 – Directive 2009/138/EC
- Omnibus 2 – draft directive
- FINANCIAL CONGLOMERATES SUPERVISION
- Supplementary supervision on financial conglomerates – Directive 2002/87/EC
- INSURANCE AND BANK ACCOUNTING
- Insurance Accounting Directive (IAD) – Directive 91/674/EEC
- Accounting standards IAS 39, IAS 32, IFRS 7 e IFRS 9
- Accounting standards IAS 27, IAS 28 e IAS 40
- Accounting standard IFRS 4 - Phase 1 and exposure draft on Phase 2
Suggested web sites
Insurance Europe (ex-CEA) – www.insuranceeurope.eu
Basel Committee on Banking Supervision (BCBS) – www.bis.org/bcbs
International Association of Insurance Supervisors (IAIS) – www.iaisweb.org
European Banking Authority (EBA) - www.eba.europa.eu
European Insurance and Occupational and Pensions Authority (EIOPA) – eiopa.europa.eu
European Commission – EU Single Market (banking, insurance and occupational pensions, accounting) - ec.europa.eu/internal_market/index_en.htm
IFRS Foundation – www.ifrs.org