Forewords xix Neal Ardley Sharon Bowles Henrique Fragelli Oldrich Masek Jason Oakley Helen Sachdev Preface xxxix Acknowledgements xlv About the Author li Part I Banking, Bank Customer Business and Regulation 1 Chapter 1 Banking, bank business and financial statements 3 Chapter 2 Ethics, conduct and customer service 75 Chapter 3 Bank regulatory capital and the “Basel Rules” 97 Part II Bank Asset and Liability Management 159 Chapter 4 The yield curve 161 Chapter 5 Asset– liability management I 201 Chapter 6 Balance sheet management: money markets, FX, trading and hedging, and securitisation 251 Chapter 7 Managing interest- rate risk in the banking book (IRRBB) 303 Chapter 8 Bank Treasury operating model 333 Chapter 9 ALCO governance framework and terms of reference 351 Chapter 10 ALM sundries: asset encumbrance, hedge accounting, IFRS 9 and EIR 383 Part III Bank Liquidity Risk Management 401 Chapter 11 Principles of bank liquidity management 403 Chapter 12 Liquidity risk metrics 445 Chapter 13 Liquidity risk reporting 461 Chapter 14 Bank funds transfer pricing 469 Part IV Bank Strategy and Governance 491 Chapter 15 Bank strategy I: inputs and setting 493 Chapter 16 Bank strategy II: capital and funding management 521 Chapter 17 Principles of corporate governance 541 Part V Principles of Risk Management and Regulation 573 Chapter 18 The risk management framework 575 Chapter 19 Credit risk assessment and reporting principles 617 Chapter 20 Stress testing, ICAAP, ILAAP and reverse stress testing 647 Chapter 21 Recovery planning and resolution planning 693 Chapter 22 Sustainable banking and climate change risk management 703 Chapter 23 Case studies: analysis, problem solving and decision making 721 Chapter 24 Everything changes, and nothing changes: excerpts from a timeless work 753 Part VI Guide to the Companion Website 761 Chapter 25 Applications software, policy templates and spreadsheet models 763 Afterword 771 List of Terms and their Abbreviations 775 Index 781

Praise for The Principles of Banking, Second Edition "This is a superb book."—Martin Barber, Director, BAE Syatems Digital Intelligence, Lancashire "The Principles of Banking is easily the most important text for anyone in banking today and should be required reading for all personal development plans. When I was a regulator at the UK Financial Services Authority, managing the change in control team, I was responsible for assessing and granting regulatory approvals for complex banking transactions, such as Virgin Money's takeover of Northern Rock. I relied heavily on Professor Choudhry's text as a reference throughout the banking license approval process."—Nihar Mehta, Chief Corporate Development Officer, Monument Bank Ltd, London "If it has kicked off between you and him, every single one of us would have run down there to help you out! And thanks for this great book."—Alex Haigh, Captain, Newdigate FC, West Sussex League "When I taught a banking course at my business school, I had a hard time finding textbooks that could explain what banking was really like from the perspective of a banker, until I came across books by Professor Choudhry. Moorad's books reflect how bankers look at and practice banking, and provide a non-theoretical and practical approach to the subject."—Ted Teo, Adjunct Assistant Professor, NUS Business School, Singapore "A magnificent, well-crafted and masterfully updated new edition of the ever popular The Principles of Banking, it remains clear, practical and well balanced. Very highly reccommended!"—Mohamoud Barre Dualeh, Head of Products and Cards Business, Alizz Islamic Bank, Muscat