The Principles of Banking

Foreword

John Cummins

I have been a colleague of Moorad Choudhry for a short time only but have known his academic work for a longer period. It is unusual for one individual to have such a mixture of practical knowledge in the field of risk and treasury management allied to such a painstaking, rigorous academic approach to the subject.

This is a very timely book. The global banking industry is going through a period of profound change, driven by the after-effects of the global financial crisis and bank failures, which were led in large part by the failure to observe sound, old-fashioned risk management principles. Liquidity management and funding mismatches are integral to the safety and soundness of the global banking system; the recent global financial crisis tested many widely held assumptions to destruction.

This volume is a serious attempt to collate, record, demonstrate and recommend best risk management practices across all the disciplines, as a real primer for students as well as experienced practitioners in the different specialist areas of banking.

Asset and liability practices form a distinct and separate field of Treasury risk management; their metrics and precepts can often be cloaked in a multivariate jargon that obfuscates the real, simple, ever-lasting precepts of banks' risks and associated metrics. Moorad's book distils many of the over-complicated explanations of ALM into plain English and simple concepts.

The global financial crisis has forced many banks ...