Behavioural Financial Management For Bankers

By the end of this training course, participants will be able to:

• Define behavioral finance and its implication on financial markets
• Identify the investor psychology and analyze trading biases
• Understand cognitive biases and explore their root causes with real life examples
• List the most common emotional biases and discuss their causes with examples
• Understand loss aversion and other biases that contribute to its effect
• Study the herding bias and other social factors that distort decision-making

Content

Introduction to Behavioral Finance

• Conceptual definition of finance: Hard versus Soft Finance
• Understand the financial system operators: Arbitrageurs, Speculators and Hedgers
• What is behavioral finance?
• Traditional portfolio theory – A brief recap
• The risk profiles of investors: Risk neutral, Risk Takers and Risk Adverse
• Market sentiment & Stock market crashes

Behavioural Finance: Application of Psychology in Financial Decisions

• Heuristics or Rules of Thumb
• Neuroeconomics and Microfinance
• Emotional Finance: The Role of the Unconscious in Financial Decisions
• Experimental Finance
• The Psychology of Risk
• Psychological Influences on Financial Regulation and Policy

Asset Pricing and Behavioral Biases

• Market Inefficiency
• Belief- and Preference-Based Models
• Disposition Effect
• Overconfidence
• Familiarity Bias
• Limited Attention & other behavioral biases

Behavioural Corporate Finance

• Financing Decisions
• Capital Budgeting and Other Investment Decisions
• Dividend Policy Decisions
• Loyalty, Agency Conflicts, and Corporate Governance
• Initial Public Offerings
• Mergers and Acquisitions

Investor Behaviour

• Trust Behavior: The Essential Foundation of Financial Markets
• Individual Investor Trading
• Cognitive Abilities and Financial Decisions
• Pension Participant Behavior
• Institutional Investors
• Derivative Markets

TRAINING METHODOLOGY

The training methodology combines lectures, discussions, group exercises and illustrations. Participants will gain both theoretical and practical knowledge of the topics. The emphasis is on the practical application of the topics and as a result participant will go back to the workplace with both the ability and the confidence to apply the techniques learned to their duties.