The ultimate guide for bank management: how to survive and thrive throughout the business cycle An essential guide for bankers and students of finance everywhere, The Principles of Banking reiterates that the primary requirement of banking―sound capital and liquidity risk management―had been forgotten in the years prior to the financial crash. Serving as a policy guide for market practitioners and regulators at all levels, the book explains the keys to success that bankers need to follow during good times in order to be prepared for the bad, providing in-depth guidance and technical analysis of exactly what constitutes good banking practice. Accessible to professionals and students alike, The Principles of Banking covers issues of practical importance to bank practitioners, including asset-liability management, liquidity risk, internal transfer pricing, capital management, stress testing, and more. With an emphasis on viewing business cycles as patterns of stable and stressful market behavior, and rich with worked examples illustrating the key principles of bank asset-liability management, the book is an essential policy guide for today and tomorrow. It also offers readers access to an accompanying website holding policy templates and teaching aids. Illustrates how unsound banking practices that were evident in previous bank crashes were repeated during the creation of the 2007-2008 financial market crisis - Provides a template that can be used to create a sound liquidity and asset-liability management framework at any bank - An essential resource for the international banking community as it seeks to re-establish its credibility, as well as for students of finance - Explains the original principles of banking, including sound lending policy and liquidity management, and why these need to be restated in order to avoid another bank crisis at the time of the next economic recession - Covers topics of particular importance to students and academia, many of which are marginally―if ever―addressed in current text books on finance - Offers readers access to a companion website featuring invaluable learning and teaching aids Written by a banking practitioner with extensive professional and teaching experience in the field, The Principles of Banking explains exactly how to get back to basics in risk management in the banking community, essential if we are to maintain a sustainable banking industry. “engaging and interesting and, more importantly, easily understood, allowing a clear picture to emerge of how the principle or concept under discussion is to be applied in the real world.” - Graeme Wolvaardt, Head of Market & Liquidity Risk Control, Europe Arab Bank Plc "Moorad Choudhry’s 'The Principles of Banking' opens up a portal into the world of sophisticated, dynamic, capital markets-based commercial banking. He gives us the big picture, the precise details and a framework for analyzing the enormous risks facing these firms. The book is an invaluable resource." -- Jean Helwege, J. Henry Fellers Professor of Business Administration, Department of Finance, University of South Carolina "This book is a ‘‘must read’’ for all senior bankers. There is no writer better than Moorad Choudhry for communicating the vital principles of liquidity, capital and asset-liability management and bank corporate governance." -- Professor Carol Alexander, Chair of Financial Risk Management, ICMA Centre, University of Reading Chair of the Board, Professional Risk Manager’s International Association "'The Principles of Banking' is ideal reading for anyone planning or developing a career in banking. Professor Choudhry’s coverage is fully integrated, clear, and authoritative. There is no better practitioner’s guide to this subject." -- Darrell Duffie, Dean Witter Distinguished Professor of Finance, Graduate School of Business, Stanford University "The failure of the US banking system in 2007–2008 can be effectively described by failing to apply the principles and strategies discussed by Moorad Choudhry. Indeed, banks should understand the dynamic interaction of the economy, credit losses and interest rates, and utilize the strategies within to balance the extremes, and prioritize strategies based upon return of capital and return on capital." -- Joe Jennings CFA, Former Managing Director, Sterne Agee &Leach, Inc., Memphis, TN "Asset and liability management (ALM) is at the heart of any bank. Among many of its functions, keeping the bank liquid and fixing the ‘‘value’’ of money (for the bank) are key to a bank’s survival and success. Moorad Choudhry has a wealth of experience in this area. The Principles of Banking is an invaluable practical guide on how banks can lift their conduct to meet the challenges of the post-crash era." -- Abhijit Patharkar, Senior Business Manager, Asset and Liability Management, Standard Chartered Bank, Singapore "Moorad continues to make a substantial contribution both to academia and the