2-in-1 Fundamentals of Banking Masterclass

2-in-1 Fundamentals of Banking Masterclass, The essentials of the banking business (business model, compliance, others), financial risk management and compliance.


If you’re considering a banking career path, you probably know it will be profitable, regardless of the specific function within it.

But if you want to understand how banks work, there is a lot of knowledge to be consumed.

You must understand about how banks make money, what risks they manage, what regulations they comply with, and much more.

You have to really master banking knowledge.

You will find that most courses don’t cover all dimensions of banking. They focus on credit analysis only. Or on risks only.

You couldn’t really find a course that included all different areas of banking in one unified place.

… that is, until this course came along.


Unlike other courses, focusing on specific components of a bank’s business model (just digital banks, just investment banks), you’ll find this course covers the banking industry as a whole, including all of its different components.

And I mean ALL of them!

You’ll find this comprehensive course divided into seven main modules:

  • You’ll first know about the Fundamentals, where we cover what is banking, different types of banking (digital banking, retail banking, investment banking, central banking), as well as the essentials of lending, capital and reserves, and some key acts and regulations;
  • Then you’ll find the Banking Business Models module, where we will cover how banks make money, their types of income and expenses, types of capital, and accounting considerations;
  • The you’ll find the Bank Products module, where we will cover the most frequent bank debt and deposit products that are offered, as well as some considerations on how bank product marketing is done;
  • You’ll then get to know about the Loan Agreements module, where we will dissect credit agreements in terms of lending. We’ll clarify covenants, representations, definitions such as what is “debt” or what is “EBITDA”, and more;
  • You’ll later come to the Banking Risk Management module, where we will cover the most relevant types of risks for banks, both extensively (from liquidity risk to cyber risk, conduct risk, counterparty risk and many others), as well as the two key ones: credit risk and interest-rate risk;
  • Finally, you’ll find the Banking Compliance module, where we will cover the most frequent types of regulations that banks must comply with – both regulatory and industrial;


Some people – including me – love to know what they’re getting in a package.

And by this, I mean, EVERYTHING that is in the package.

So, here is a list of everything that this course covers:

Fundamentals of Banking

  • You’ll learn about the basic definitions of banks, as intermediaries between loans and deposits, making money mostly from the net interest income (NII) – the difference between interest earned and paid
  • You’ll learn about the relationship of banks with other financial institutions, such as having brokerage or asset management divisions with banks, as well as their comparison with private lenders in the lending space;
  • You’ll learn about multiple “banking” terms, including central banking, fractional banking, challenger banks, digital banks or correspondent banks, as well as what each means;
  • You’ll learn about the key acts and regulations that have affected banks historically, including Glass-Steagall, Sarbanes-Oxley, Dodd-Frank, and the Basel accords;
  • You’ll learn about the key activities in banking, from lending/debt extension for individuals or companies, cash management and treasury services, private banking and wealth management services, and capital markets activity (including both trading and brokerage/underwriting activities), as well as the split of these activities into two major dimensions: investment banking and retail/commercial banking;
  • You’ll learn about the different types of funding from depositors, including retail depositors (the most frequent and “cheaper” source), wholesale deposits, wholesale debt, and equity, as well as the consequences of each in term of both liquidity and funding costs;
  • You’ll learn about the three main types of bank revenue (interest income, fees and commission and capital market income) as well as their three main sources of expenses (operational costs, funding costs and loss reserves);
  • You’ll learn about the maturity transformation process (transforming short-term deposits into long-term loans) and its consequences on Net Interest Income (NII);
  • You’ll learn about the two tiers of capital that banks have, as well as the usually enforced ratios between Tier 1 and Tier 2 capital;
  • You’ll learn about the “trading book” and the “banking book”, two balance sheets with two different accounting philosophies due to the different nature of their assets;
  • You’ll learn about the main types of debt instruments provided by banks, including term loans versus RCFs (Revolving Credit Facilities), and the subtypes of RCFs (including overdraft facilities, liquidity facilities), Asset-Based Lending (ABL) – usually used for inventory finance or Accounts Receivable (A/R) finance, including factoring – as well as trade finance solutions (Letters of Credit or L/Cs, PO finance and forfaiting), project finance, money market facilities and leases, as well as the inner workings of syndicated loans;
  • You’ll learn about the main types of deposits provided by banks, including checking accounts (also known as MTAs or Money Transfer Accounts), savings or timed deposits, and structured deposits (with an investment component);
  • You’ll learn about the challenges of bank product marketing, due to lack of differentiation in product performance (as well as lack of clarity in product performance), the lack of attractiveness to consumers, as well as new technological changes pushed by digital banks;
  • You’ll learn about loan agreements/credit agreements in general, including specific sections such as conditions precedents, the commitment, representation and warranties, the definitions used, and, the most “famous” components – the covenants;
  • You’ll learn about the definitions used in credit agreements, such as what is “debt” and what is “EBITDA”, or what are “consistently applied” GAAP, and how small changes in these can radically change the attractiveness of such agreements. You’ll also learn about how negotiable can be secondary definitions, such as what are “dividends”, what are “investments”, and what are “material” events;
  • You’ll learn about what are representations (affirmations by the borrower), as well as the three main categories of representations they must make: financial, business and legal representations – as well as examples of each;
  • You’ll learn about the three main types of covenants – affirmative, negative and financial, as well as specific examples of affirmative covenants (actions the borrower must take, such as disclosing documents, using the proceeds for specific purposes, being insured, and more) and negative covenants (actions the borrower cannot take, such as speculating with loan money, taking on more debt or liens, changing the business fundamentally, and more);
  • You’ll learn about financial covenants in specific, including their two main types, incurrence and maintenance, and the three main subtypes of maintenance covenants (performance-based, date-based and hybrid). We’ll also cover the most frequent types of maintenance covenants – coverage ratios, including the three most common ones: the Interest Coverage ratio, the Debt Service Coverage Ratio (DSCR), and the Fixed-Charge Coverage Ratio (FCCR) – as well as other frequent covenants such as the leverage ratio or limits on leases and capital expenditures;

Financial Risk Management Course (integrated as a module):

  • You’ll learn about the essentials of credit risk (both default risk and migration risk), as well as other risks related to credit risk itself, such as concentration risk, default correlation risk, and even contagion risk;
  • You’ll learn about credit portfolio management, including the four pillars of robust credit risk management (efficient limits, robust lending processes, efficient quantitative analysis and efficient qualitative analysis), the four main techniques to mitigate credit risk (including loan sales, loan securitisation, loan syndication, and hedging with Credit Default Swaps), and the key terms in credit portfolio management (including PD or Probability of Default, LGD or Loss Given Default, EAD or Exposure at Default, and EL or Expected Loss);
  • You’ll learn about the three layers of market risk (general market risk, secondary risk for specific portfolios/groups of positions, and idiosyncratic risk unique to positions), as well as the six key categories of market risk (price movements in equities, interest rates, credit, commodities, currencies, and real estate);
  • You’ll learn about interest rate risk in specific, as well as the three main subtypes of it (basis risk, gap risk and option risk), what causes each, and how it’s usually hedged against;
  • You’ll learn about the Value at Risk (VaR) methodology to measure market risk, its limitations, variations such as Stressed VaR demanded by Basel III, and the Expected Shortfall (ES) methodology that replaces VaR under the Basel Fundamental Review of the Trading Book (FRTB), as well as the key differences between VaR and ES;
  • You’ll learn about other measures of risk that complement VaR, including simple statistical measures such as standard deviation and downside deviation, and other measures related to losses, such as the Months to Earn Back a Loss, the maximum drawdown or maximum drawdown’s months, and percentage of months with losses, among others;
  • You’ll learn about operational risk in general, as well as the five key types of operational risk under Basel II classification (internal process risk, people risk, legal and compliance risk, external risk, and systems or cyber risk);
  • You’ll learn about the specific types of internal process risk (wrong information, missing information, lack of controls, circumvention of controls);
  • You’ll learn about the specific types of systems risk (service interruptions, missing or corrupted information, model risk, and cyber risk in specific), as well as how cyber risk is usually leveraged through hacking (and the multiple approaches to it, including convenience fraud, identity theft, social engineering and phishing, or trojans and viruses);
  • You’ll learn about the specific types of people and conduct risk, and usual manifestations (risky trading, product mispricing, interbank rate fixing, sanctioned person transactions, etc), as well as some key causes (employee rotation, misaligned incentive systems, and lack of control function integration/oversight);
  • You’ll learn about legal and compliance risk, as well as the specific types of regulation that, when not complied with, can cause sanctions by the regulators, and how banks have a “compliance appetite” parallel to their risk appetite;
  • You’ll learn about modeling risk, its two main types (bad models and good models with bad data), as well as measures to hedge against model risk, including the FRB’s SR 11-7 recommendations (model documentation, model validation, and governance over all model policies and practices);
  • You’ll learn about trading leverage and liquidity risk. We’ll cover the two types of leverage (borrowing or explicit leverage vs notional or implicit leverage), the role of counterparty risk in embedded leverage for derivatives, and the types of liquidity risk (illiquid assets, large positions of assets, client concentration or position concentration);
  • You’ll learn about the different areas of Basel regulation for banks, including how the Basel Accords have evolved to include credit risk, market risk and operational risk, the three main approaches to calculate these risks, and the changes to these approaches over time;
  • You’ll learn about the approaches for credit risk regulatory capital calculation, including the Standardised Approach with weights for borrower ratings, as well as the Internal Ratings-Based (IRB) approaches, and the measures that must be calculated by banks in both the Foundation IRB approach and the Advanced IRB approach;
  • You’ll learn about the approaches for market risk regulatory capital calculation, including the Standardised Approach with weights for different risks of each asset (and including additional charges depending on the Basel version, such as the IRC or Incremental Risk Charge for credit-sensitive assets and the CRM or Comprehensive Risk Measure for securitised products), as well as the Internal Models approach, historically using Value at Risk (VaR), but with possible changes depending on the Basel iteration (Stressed VaR since Basel III, and replacement of VaR with Expected Shortfall since the Basel FRTB), as well as the requirements to use each;
  • You’ll learn about the changes that the Fundamental Review of the Trading Book (FRTB) brings to the calculation of market risk, both in terms of the Internal Models Approach (97.5% Expected Shortfall for 5 liquidity intervals and all trading desks), but also in terms of the Standardised Approach (including changing risk weights to a sensitivities approach, including a risk charge (delta + vega + curvature), a default risk charge and a residual add-on);
  • You’ll learn about the approaches to calculate operational risk regulatory capital, including the Basic Indicator approach (a percentage of total gross revenue), the Standardised Approach (specific percentages of gross revenue for 8 distinct business lines) and the Advanced Measurement Approach (by using internal models), as well as the requirements to use each;

Fundamentals of Financial Institution Compliance (integrated as a module)

  • You’ll learn about the essentials of compliance. The main goals of compliance (keeping the financial system stable, ensuring banks are safe and sound, protecting customers + investors), the distinction between regulation, supervision/monitoring and enforcement, as well as what each entails, the four key areas of bank regulation (micro-prudential, macro-prudential, consumer protection and anti-crime), the differences between rules-based and principles-based regulation, and the relationship between compliance and risk management;
  • You’ll get to know the three main conflicts between profit and compliance: How regulatory capital cushions create capital that does not yield returns, how AML/CFT regulation sets constraints on possibly suspicious (but very lucrative) private banking activity, and how consumer protection, preventing predatory practices, also makes banks less competitive and turn less profit. Also, how banks perform regulatory arbitrage, finding the most dangerous way possible to comply with regulation;
  • You’ll learn about the regulatory landscape in the US and EU. The three main bank regulators in the US (OCC, FDIC and FR), and how each bank has 1 to 3 of these as regulators, and under what conditions. Also, under what conditions the FDIC insures deposits, the moral hazard created by it (for both banks and consumers), and the 3 possible measures the FDIC takes upon conservatorship of a failing bank (paying out depositors, selling the bank, government bailout), as well as the Prompt Corrective Action or PCA program that supervises banks and enforces quality to preserve FDIC insurance. We’ll also cover the 2 main capital markets regulators in the US (SEC and CFTC). The regulatory landscape in Europe is also covered, with the Single Supervisory Mechanism (SSM) and each country’s NCA (National Competent Authority);
  • You’ll learn about the full history of the Basel Accords until December 2021 (Basel I, 1996 Amendment, Basel II, Basel II.5, Basel III, the Dodd-Frank implementation of most of Basel III, and the 2018 partial rollback of Dodd-Frank, and the 2019 Fundamental Review of the Trading Book or FRTB);
  • You’ll know more about the 3 pillars of Basel micro-prudential regulation, P1 being regulatory capital for 3 key risks (market, credit, operational), P2 being ICAAP supervision, and P3 being “market discipline”, or disclosure of capital structure to investors and clients;
  • You’ll discover micro-prudential capital adequacy measures, including regulatory capital for 3 key risks, additional buffers such as the Capital Conservation Buffer (CCB), the Countercyclical Capital Buffer (CCyB), or G-SIB surcharge, and the distinctions between the key types of capital (Tier 1 versus Tier 2 – and Tier 3 in older Basel implementations – as well as, within Tier 1, Common Equity Tier 1 or CET1 versus Additional Tier or AT1);
  • You’ll get to know additional micro-prudential restrictions, such as concentration limits on lending to specific borrowers, to other financial institutions, and limits on the assets a bank can have, such as risk-based deposit insurance premiums;
  • You’ll get to learn about micro-prudential regulation supervision and enforcement, including the 6 dimensions of the CAMELS scoring system, the types of enforcement actions (penalties, Cease and Desist Orders, forbearance, FDIC insurance suspension, conservatorship, etc), the moral hazard created by forbearance, and the 4 types of supervisory structures (institutional, functional, integrated, “twin peaks”);
  • You’ll get to know about macro-prudential systemic restrictions for the biggest banks. The Countercylical Capital Buffer (CCyB), the G-SIB surcharge, Supplementary Leverage Ratios (SLRs), and liquidity ratios (the Liquidity Coverage Ratio or LCR in the short-term, and the Net Stable Funding Ratio or NSFR in the long-term);
  • You’ll learn more about the two biggest stress testing frameworks (the Comprehensive Capital Analysis and Review or CCAR, and the Dodd-Frank Act Stress Tests or DFAST), as well as their quantitative and qualitative components, and the role of model risk management in the CCAR’s capital planning exercise;
  • You’ll find out more about the two types of macro-prudential structural reforms to either prevent banks from becoming TBTF or winding them down gracefully if they go bankrupt: Ex ante approaches (while banks are still a going concern, e.g. Volcker Rule, Vickers report “ringfencing”) and ex post approaches (when banks are a gone concern, e.g. resolution plans and orderly liquidation procedures);
  • You’ll learn more about the four key areas of consumer protection regulation (fairness in lending, transparency on deposit products, preventing Unfair/Deceptive/Abusive Acts or Practices or UDAAPs, and privacy/information protection), as well as what each entails;
  • You’ll get to know more about anti-crime regulation, including the 3 main disciplines of Know Your Customer or KYC, Anti-Money Laundering or AML, and Counter-Financing of Terrorism or CFT, as well as what each demands. You’ll also learn more about the 2 key types of reports in AML, which are Currency Transaction Reports or CTRs and Suspicious Activity Reports or SARs, and the four key pillars of robust AML compliance (internal controls, independent auditing, existence of an owner, and employee training);
  • You’ll learn more about banking payment regulation, including both legal regulation such as the Payment Services Directive 2 or PSD2, and the 3-Domain Secure or 3D Secure directives, including functionality such as “strong authentication” or sharing of information between issuer bank and acquirer bank, as well as industry regulation such as the Payment Card Industry Data Security Standards (PCI-DSS), as well as a brief overview of their 12 requirements (as of version 3.2.1.);


Remember that you always have a 30-day money-back guarantee, so there is no risk for you.

Also, I suggest you make use of the free preview videos to make sure the course really is a fit. I don’t want you to waste your money.

If you think this course is a fit and can take your knowledge of PE to the next level… it would be a pleasure to have you as a student.

See you on the other side!

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