| an exploration of banking | | | |NATIONAL BANK OF SERBIA | |ACADEMY OF BANKING AND FINANCE | |a project supported by the European Agency for Reconstruction | INTRODUCTION
This brief covers the following:
▪ DESCRIPTION OF THE SIMULATION
▪ THE BUSINESS SITUATION
▪ DESCRIPTION OF THE DECISIONS
▪ DESCRIPTION OF THE RESULTS
▪ RECENT TRADING HISTORY
This simulation is designed to allow you to manage the development of a bank in direct competition with several like banks so that you can explore how a bank functions. It does not attempt to replicate your bank or banking environment precisely. Rather it is designed to raise key banking issues and explore basic bank operations.
A business model simulates the operation of your bank. Your decisions and those of your competitors influence the responses to this model. The results of your decisions are used to produce several reports that you must analyse to see how well you are performing and what further action is needed.
Your objective is to make your bank successful and it is up to you to agree your criteria of success.
The simulation consists of the following:
▪ DECISION MAKING
Preparation involves becoming familiar with the basic situation, defining individual responsibilities, considering objectives and deciding how to measure and control. While doing this it is important to recognise that it takes some time before you fully understand all the facets of the bank that you are managing. It is probable that you will only fully understand the bank after you have run it for several periods. Thus your understanding and the effectiveness of decision making will improve throughout the simulation.
Once the initial preparation is complete the operation of the business is simulated for several periods each representing one year. (The first period is year 1). Each period involves the following: ▪ SUBMISSION OF DECISIONS
▪ SIMULATION OF THE BUSINESS
▪ ANALYSIS OF THE RESULTS
Decision Submission - the decisions (as described later) must be submitted to the simulation control centre at or before the time set. You must keep to the decision making schedule for, if decisions are not submitted on time, the previous decisions are used in their place. The decisions must be submitted on the forms provided and should be complete and legible!
Simulation - the decisions are evaluated and their impact calculated. These calculations take some time, and you should use this time to reflect on your objectives and strategies and to update your business control systems.
Results – a series of reports are returned to you for you to analyse and consider before making your decisions for the next year.
At the end of the simulation there is a review of your results and those of your competitors. And you may be asked to make a presentation. THE BUSINESS SITUATION
The business is a bank that has been operating for some time in direct competition with several other banks. In the past these banks have not competed strongly against each other and your task, as the new senior management is to change this and turn your bank into a successful, thriving business.
THE MARKET SECTORS
Your bank operates in two market...