Chapter 14: Financial Analysis of Banks and Insurance Companies

In this section

• Unique Financial Statement Structures of Financial Institutions
  Unique Financial Statement Structures of Financial Institutions (CFA Level 1): Why Statements Differ for Financial Institutions, Balance Sheet of a Bank, and Loans as the Primary Asset. Key definitions, formulas, and exam tips.
• Regulatory Capital and Reserve Requirements
  Regulatory Capital and Reserve Requirements (CFA Level 1): Importance of Regulatory Capital, Understanding Capital Tiers for Banks, and Reserve Requirements for Banks. Key definitions, formulas, and exam tips.
• Evaluating Liquidity, Asset Quality, and Solvency
  Evaluating Liquidity, Asset Quality, and Solvency (CFA Level 1): Liquidity Analysis, Liquidity in the Insurance Sector, and Visualizing Short-Term vs. Long-Term Mismatches. Key definitions, formulas, and exam tips.
• Risks Specific to Banking and Insurance Operations
  Risks Specific to Banking and Insurance Operations (CFA Level 1): Nature of Risk in Banking and Insurance, Credit Risk, and Identifying Credit Risk. Key definitions, formulas, and exam tips.
• Off-Balance-Sheet Exposures in Financial Institutions
  Off-Balance-Sheet Exposures in Financial Institutions (CFA Level 1): Common Off-Balance-Sheet Items in Banking, Letters of Credit (LoCs), and Loan Commitments. Key definitions, formulas, and exam tips.
• Stress Testing and Scenario Analysis for Financial Institutions
  Stress Testing and Scenario Analysis for Financial Institutions (CFA Level 1): Why We Need Stress Testing, Regulatory Requirements and Approaches, and Single-Factor vs. Multi-Factor Stress Tests. Key definitions, formulas, and exam tips.
• Basel Accords and Implications for Bank Capital
  Basel Accords and Implications for Bank Capital (CFA Level 1): Understanding the Basel Accords, Evolution of the Basel Accords, and Basel I. Key definitions, formulas, and exam tips.
• Insurance Contract Liabilities and Discount Rate Assumptions
  Insurance Contract Liabilities and Discount Rate Assumptions (CFA Level 1): Key Concepts of Insurance Contract Liabilities, Why Discount Rate Assumptions Matter, and Methodologies for Measuring Liabilities. Key definitions, formulas, and exam tips.
• Underwriting Margins and Embedded Value Analysis
  Underwriting Margins and Embedded Value Analysis (CFA Level 1): Underwriting Margin: The Core of Insurance Profitability, Definition and Calculation, and Interpreting the Margin: Why It Matters. Key definitions, formulas, and exam tips.
• IFRS 17 and Its Impact on Insurance Contract Accounting
  IFRS 17 and Its Impact on Insurance Contract Accounting (CFA Level 1): Evolution from IFRS 4 to IFRS 17, Core Concepts in IFRS 17, and IFRS 17: The General Model. Key definitions, formulas, and exam tips.