syllabus guide economics

8/6/2019 Syllabus Guide Economics

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ISQ Syllabus Guide

Economics

Stage 2

The Institute of Bankers Pakistan


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Economics | Stage 2 33

Table of Contents

5

7

8

11

12

13

14

17

21

22

23

26

Preface

1 Aims/ObjectivesoftheISQ

2 ISQSchemeofStudy

3 RationaleoftheISQProgram

4 JAIBPProgramFormat

5 Aims/ObjectivesoftheEconomicsCourse

6 Syllabus

7 SpecicLearningObjectives(SLOs)

8 SchemeofAssessment

9 RecommendedTextsandReferenceMaterials

10 DenitionofCognitiveLevelsandCommandWordsoftheSLOs

Annexure1TransitionProcessforMid-streamCandidates


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ISQ Syllabus Guide4

For queries and feedback

TheInstituteofBankersPakistan,M.T.KhanRoad,Karachi74200,Pakistan

UAN

111-IBP-ISQ(111427477)

Phone

+92(21)35680783,35689718,35694244,35694247

Fax

+92(21)35683805,35222416

Email

[email protected]

Website

www.ibp.org.pk


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Preface

IBPSuperiorQualication(ISQ)providesauniqueopportunitytothosewhowishtopursue

aprofessionalqualicationinbanking.

TheISQhasbeendesignedsuchthatitnotonlyencourageslearninginatraditionalmannerbut

alsoencouragestheunderstandingandapplicationofconceptsandbankingpractices.Developed

usingcontemporarycurriculumdesignmethodology,webelievethattheISQwillenhancetheskills

andknowledgeofcurrentandpotentialbankers,providingtheindustrywithahealthypool

ofqualiedprofessionals.

Sinceourbankingprofessionalsaregeographicallymobile,investmentinaqualicationwhich

iswidelyrecognizedintheregionandgloballyistheneedofthehour.TheInstituteisproudto

introducefromJuly2011thenewJuniorAssociateshipleveloftheISQqualication(JAIBP)whichisaccreditedbyUKsCharteredBankerInstituteandcandidatescompletingtheJAIBPlevelwiththe

newcurriculumwillbeeligibletoattaintheAssociateCharteredBankertitleawardedbyChartered

BankerInstitute.

TheInstituteofBankersPakistancontinuestoendeavortofulllitsmandateofprovidingquality

professionaltrainingandtechnicalexpertiseforthebankingindustryandthenewISQisastep

inthatdirection.

ThisbookcontainsdetailsabouttheEconomicscourseoftheJAIBPprogram.Weencourageyouto

studythisindetailandwishyouthebestofluckinyourknowledgeendeavors.

Shahnoor Meghani

HeadofStrategicInitiatives

TheInstituteofBankersPakistan

July2011


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ISQ Syllabus Guide6


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1 Aims/ Objectives of the ISQ

IBPSuperiorQualication(ISQ)istheonlyrecognizedprofessionalqualicationforbankersin

Pakistan,whichisrecognizedbyboth,theStateBankofPakistanaswellasthebankingandnancialservicesindustry.

ISQisaprofessionalqualicationprogramwhichisaimedatempoweringthepresentandaspiring

prospectivemanagement-levelbankerswithpracticalknowledgeaboutthebankingindustryandits

functions.TheprimaryobjectiveoftheISQprogramistoequipentrantsofthebankingindustryand

existingmid-levelbankerswithnecessaryskillsandknowledgetobecomewell-roundedbanking

professionals.

TheJuniorAssociateshipofIBP(JAIBP)portionoftheISQprogramhasundergoneacomplete

updation,intermsofstructureandcurriculum,tomakeitrelevanttothecurrentbankingindustryneedsaswellasinternationalmarketpractices.

ThenewJAIBPprogramiseffectivefromtheWinter2011examination.Candidateswhoenroll

fortheISQprograminJuly2011willstarttheircourseofstudywiththenewsyllabusofferings.

CandidateswhoenrollfortheISQprograminJuly2011willstarttheircourseofstudywiththenew

syllabusofferings.CandidateswhohadenrolledandappearedfortheJAIBPexampriortoJuly2011

(mid-streamcandidates)willbetransitionedtothenewprogram.Mid-streamJAIBPcandidates

needtothoroughlyreviewtheTransitionProcessprovidedinAnnexureI.Kindlyreadtheprocess

andfamiliarizeyourselfwiththestepsandprocedurestobeundertakentoequateyourselftothe

newandupdatedISQprogram.


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ISQ Syllabus Guide8

TheISQprogramisa3-LevelSelf-StudyProgram:

Junior Associateship of IBP (JAIBP) Associateship of IBP (AIBP) Fellowship of IBP (FIBP)

Stage1FourSubjects

Stage2FourSubjects

Stage3ThreeSubjects

PlusoneSpecializationSubject

JAIBP

3yearsofTotalBankingExperience

60HoursCPD

FourSubjects

PlusoneSpecializationSubject

AIBP

5yearsPostAIBPBankingExperience

TwoSubjects

Specialization

DissertationplusVivaandtwopublishedarticlesinareputedjournal

FortheWinter2011examinationsession,theInstitutehasrevampedonlytheJunior

AssociateshipofIBP(JAIBP).

TheJAIBPisathreestage,selfstudyprogram,designedspecicallytocreatewell-rounded

bankingprofessionals.TheupdatedJAIBPstructureisasfollows:

Stage 1

1 BusinessCommunicationforFinancialServices

2 IntroductiontoFinancialSystemsandBankingRegulations

3 InformationTechnologyinFinancialServices

4 BranchBanking

Stage 2

5 AccountingforFinancialServices

6 Lending:Products,OperationsandRiskManagement

7 HumanResourceManagementandOrganizationalBehavior

8 Economics

Stage 3

9 MarketingofFinancialServices

10 FinanceofInternationalTrade&relatedTreasuryOperations

11 ManagementAccountingforFinancialServices

AtStage3,candidateswillhavetosuccessfullycompleteoneSpecializationSubjectfromthe

following:

Leasing and Micro Finance

SMEs and Agriculture Finance

Islamic Banking and Finance

Retail and Consumer Banking Operations

StudentsenrollingintheJAIBPprogramhaveamaximumperiodof5yearstocompletetheJAIBP.

The5yearperiodcommencesfromthedateofappearanceintherstexam.Furtherdetailsare

availableintheISQHandbook.

2 ISQ Scheme of Study


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The Chartered Banker Institute Accreditation of ISQs JAIBP

TheUKsCharteredBankerInstitutehasaccreditedtheJuniorAssociateshipofIBP(JAIBP)portionof

theIBPSuperiorQualication(ISQ)program.

TheUKsCharteredBankerInstituteistheoldestbankinginstituteintheworld.Itdevelopsand

promotesprofessionalstandardsforbankersandprovidesworldclassprofessionalqualicationsfor

thenancialservicesindustryintheUKandoverseas.

TheCharteredBankerInstituteisalsotheonlyorganizationworldwidethatcanconferChartered

BankerstatusonitsMembersandFellows.MembershipoftheCharteredBankerInstitutemeans

thatonemeetstheprofessionalstandardsofexcellence,whicharerecognizedandrespectedall

overtheworld.BeingamemberoftheCharteredBankerInstituteisavaluableassetinones

professionalcareerasitprovidestheworldwiderecognitionthattheydeserveandalsohelpskeep

themaheadoftheirpeersinthebankingandnancialservicesindustry.

Inaddition,membershipoftheCharteredBankerInstituteformsasolidbaseforasuccessfulcareer

inbankingandnancialservices.MemberswillbenetfromtheCharteredBankerInstitutesstatus,

condenceandprofessionalstandingandinturnbemoreemployableandhavebettercareer

prospectsinthefuture.

What does the Chartered Banker Institutes accreditation of the JAIBP mean for me?

ThisaccreditationoftheJAIBPmeansthatallindividualswhosuccessfullycompletetheJAIBPhave

theopportunitytoreceiveaportablecerticationthatisinternationallyrecognizedthroughthe

accreditationbyarenownedinstitution.

1 Candidates who enroll for the JAIBP program in July 2011

AllJAIBPqualiedindividualswhoenrolledintheISQprograminJuly2011,whichisaccredited

byCharteredBankerInstitute,uponcompletionwillreceiveajointcerticationbyIBPandthe

CharteredBankerInstitute,andwillalsobeeligibletousethetitleoftheAssociateChartered

Banker(throughon-goingpaymentofthesubscribedfee).

2 Mid-stream ISQ Candidates

Mid-streamJAIBPcandidateswillhavetopassacomprehensiveexaminationtofulllthe

requirementsoftheCharteredBankerInstitutesaccreditationoftheJAIBPprogram,inadditionto

paymentofsubscriptionfee.

ThescheduleandfeeforthecomprehensiveexaminationwillbeannouncedontheIBPwebsite

(www.ibp.org.pk).


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ISQ Syllabus Guide10

Eligibility Criteria for the JAIBP Program

TheentrycriterionfortheJAIBPprogramhasbeenrevisedforcandidatesenrollingfromJuly2011

onwards.JAIBPisopenforthefollowing:

1 Graduatesinanydisciplinewithaminimum2ndDivision

AND

2 Studentswhoarepursuingtheirdegreeina4-yearundergraduateprogram(post

Intermediate/Alevelsorequivalent)areeligibletoenrollfortheISQprogramduringtheir3rd

or4thyearofstudy.Studentswhoarepursuingtheirdegreeina2-yearundergraduate

program(postIntermediate/Alevelsorequivalent)areeligibletoenrollfortheISQprogram

duringtheirnalyearofstudy.

DocumentationrequiredforstudentsregisteringintheISQprogramwillbeattestedmarksheet

forIntermediateorAlevelswithapassgradeof45%andaletterfromtheiracademicinstitution

conrmingtheirenrollmentinthespeciedundergraduateprogram.Theawardofthecompleted

JAIBPqualicationwouldbesubjecttothecandidatehavingagraduatedegree.

Note: More details about the program can be found in the ISQ Handbook or on the IBP website:

www.ibp.org.pk


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Thegeneralrationalebehindtheprogramrevampissimple.Withtherapidgrowthand

developmentofthenancialsectoranditschangingdynamics,theneedsofthebankingindustryintermsoftheknowledgerequiredfromyoungentrantshaveincreased.TheInstitute,inorderto

providethebankingindustrywiththemostrelevantandup-to-dateprogramandtohelpequip

thebankingindustryrecruitswithessentialindustryexpertise;hasupdateditsprogramtoalign

itwiththeneedsoftheindustryinPakistanaswellasglobalindustrytrends.IBPhasdeveloped

theISQprograminamannerthatiscontemporaryandinlinewithinternationalstandardsbothin

termsofthecourseofstudyi.e.creatingacomprehensive,standardizedprogramanddesignwhich

incorporatesinternationalrenownedmethodologiesforcurriculumdevelopmentandassessment

andtesting.Furthermore,theISQprogramprovidesworkingprofessionalswiththeexibilityto

pursuetheircareerwhileenhancingtheirprofessionalqualications.Moreover,theISQprogramisalsobenecialforfull-timestudentsasthisqualicationwillassisttheminpavingthewaytoenter

intothebankingandnancialservicesindustry.

3 Rationale of the ISQ Program


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ThesyllabusforeachofthecompulsoryJAIBPcoursehasbeenupdatedtoreectthecurrent

bankingindustryrequirements.

IBPisnowprovidingallcandidatesoftheJAIBPprogramwithSpecicLearningObjectives(SLOs).

TheSLOsarebasicallyalearningresourceoratool,aidingcandidatesinstudyingthemosttestable

coursematerial.TheSLOplanprovidedinsection7isindicativeandismeantasastudyguide.

Cognitivelevelsmentionedarealsoindicativeandstudentsareencouragedtostudythesubject

deeplyandbeyondthestatedcognitiveleveltoenhancetheirlearning.Thisbookisspecicallya

SyllabusGuidefortheEconomicscourse.MoreinformationabouttheISQprogramcanbefound

intheISQ Handbookoronourwebsite.

TheSLOsinSection6ofthisbookcorrespondwiththesyllabusofaspeciccourse.Eachlearning

objectiveorSLObeginswithacommandword,suchas,list,dene,describe,explainetc.Each

commandwordisassociatedwithacognitivelevel.Thecommandwordshelpthecandidates

inidentifyingthelevelofdetailexpectedfromthemintheircourseofstudy.Theexamination

questionsarealsoframedusingthesametypeofcommandwords.PleaseseeSection10toobtain

thedenitionsofthecommandwords.

The SLOs are classied under three cognitive levels:

1 Knowledge(K)

2 Understanding(U)3 Applicationofknowledgeandskills(A)

DenitionsareprovidedinSection10

Candidates must thoroughly review the following sections while preparing

for their examination:

Section6:Syllabus

Section7:SpecicLearningObjectives(SLOs)

Section8:SchemeofAssessment

Section9:RecommendedTextsandReferenceMaterials Section10:DenitionofCognitiveLevelsandCommandWordsoftheSLOs

This book contains information specic to the Economics.

Disclaimer:

The Institute reserves the right to revise its policies, procedures and program structure at any point.

Please refer to the Institutes website for latest information.

4 JAIBP Program Format


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Economicsasasubjectisaboutchoosingthebestoptionfromdifferentalternativesandthe

impactthesechoiceshave,bothatanindividualaswellasatthemacroeconomiclevel.Economicsnotonlydenestherelationshipbetweenscarcemeansandunlimitedwantsbutitalsohelpsin

understandinghowsimplepurchasingdecisionscouldinuencethedemandandsupplyofgoods

andservices.Economicsforbankersisimportantasithelpsinunderstandingtheimportanceof

money,therationalizationofcreditdecisionsandtheroleofbanksintheentireeconomicsystem.

Bankersmustalsounderstandtherationaleformacroeconomicpoliciesandbeabletoanalyzethe

impactofGovernmentandCentralBankpolicychangesonbusinessesaswellasthebankingsector.

Thiscoursebroadlycoversthevariousareasofeconomicsasrelevanttoabankersuchas

microeconomics,macroeconomicsandmonetaryeconomics.

Specic Objectives

Afterthesuccessfulcompletionofthiscourse,participantswillhave:

Knowledge and understanding of:

BasicsofMicroeconomicsi.e.resourcesandallocation,demand,supply,opportunitycostand

themarketplace

BasicframeworkofMacroeconomics,i.e.nationalincome,ination,unemployment,

exchangeratesandtradebalances

Moneyanditsfunctions

Thedemandandsupplyofmoney To understand the role of monetary authority of a country in pursuing the monetary

targets/mandates and the methods it employs to pursue the mandate.

To identify and interpret the channels through which the monetary policy affects the

economy

To demonstrate the ability to understand the objectives of monetary policy and scal policy

and how the Central Bank applies this concept

To understand the coordination of monetary policy with the scal policy and the exchange

rate policy

The capacity to understand the objectives of International Monetary Institutions

5 Aims/ Objectives of the Economics Course


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Economic

1 Introduction

a) Whystudyeconomics

b) Basicconceptsofmicroeconomics

c) BasicFrameworkofMacroeconomics

d) Macroeconomic-issues,goalsandpolicies

e) Macroeconomicmethods

f) Controversiesinmodernmacroeconomics

2 National Income and Demography

a) EconomicModels

b) MeasuringNationalProduct

c) Expendituresapproach

d) Incomeapproach

e) ProbleminusingGNPasameasureofwelfare

f) Povertyreductionstrategy

g) Socialsafetynets

h) Lorentzcurveandinequitabledistributionofincome

3 Inationa) Varioustypesofination

b) Causesofination

c) Negativeandpositiveimpactsofination

d) PriceIndexes

e) MeasurementofinationinPakistan

4 Unemployment

a) Varioustypesofunemployment

b) Causesofunemployment

c) Okunslaw

d) ShortrunPhillipscurve

e) MacroeconomicpolicyandPhillipscurve

f) ThelongrunPhillipscurve

5 Exchange Rate and Trade Balance

a) Balanceofpaymentandforeigntrade

b) Currentandcapitalaccounts

c) Pakistanscase:BalanceofPayment

d) Exchangeratesystems

e) Typesofexchangerates

f) Monetarypolicyandexchangerate

6 Syllabus


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g) Determinationofexchangerate.

h) Crucialroleofinterestratepolicyinthecoordinationofmonetaryandexchangeratepolicies.

i) Realexchangerate

j) Interestrate

k) Closedeconomyandopeneconomy

l) Monetaryandscalpolicyinxedandexibleexchangerateregimes

m)Pakistanscase:ExchangeRatePolicies

6 Money

a) Denitionandbasicfunctionsofmoney

b) EvolutionofvariousformsofmoneyinPakistanMonetary Theories

a) Quantitytheoryofmoney

b) Themonetaristapproach-liquiditypreferencetheoryandportfoliomanagementtheory

7 Demand and Supply of Money

a) Demandformoneyinaneconomy

b) Creationofmoney/creditexpansionthroughbankingsystem

c) CompositionofM0,M1,M2andM3

d)ComponentsofReserveMoney(M0)andmoneymultiplier

e) Thebehaviorofmoneymultiplieranditspolicyimplications

8 Objectives of Monetary Policy

a) PricestabilitythroughprudentMonetaryPolicy

i)Ination

ii)Variouspriceindices

iii)Demandpull

iv)Costpushination

b) Economicgrowthandpricestability

c) Soundnessandstabilityofnancialmarkets

9 Objectives of Fiscal Policy

a) Fiscaltoolstostabilizetheeconomy

b) Crowdingouteffect

c) Discretionaryscalpolicy

d)Automaticstabilizers

e) Fiscalpolicyinstrumentsthatimpacttheeconomy


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10 Transmission Mechanism of Monetary Policy and the impact on Banking Sector Credit

Channels through which monetary policy affects the economy:a) Creditchannels

b) Moneyorinterestratechannel

c) Exchangeratechannel

d)Assetpricechannel

e) Experienceofdevelopedanddevelopingcountries

11 Central Banking and Monetary Policy Regimes

a) Monetarytargeting

b) Inationtargetingc) Choiceofpolicyanchor

i)Volumeofmoney

ii)Interestrate

iii)Exchangerate

d)AbriefoverviewofmonetarypolicyandcentralbankinPakistan

12 Impact of Fiscal and Monetary Policy and Equilibrium

a) Fiscalandmonetarypolicymix

b) ImpactofscalandmonetarypolicyonAD-ASequilibriumc) Shortrunvs.longrunanalysis

d) AbriefonscalandmonetarypolicyrelationshipinPakistanEconomy

13 The World Economy: International Monetary Institutions

a) AbriefhistoryofInternationalMonetaryInstitutions

b) ObjectivesofIMF,WorldBank,AsianDevelopmentBankandBankforInternationalSettlement

c) The2008worlddebtcrisis

d)TheroleofinternationallendersindebtmanagementandpovertyreductionofPakistan


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7 Specic Learning Objectives (SLOs)

e) PerformancecriteriaoftheIMFprogram

Economics Specic Learning Objectives

Chapter Candidates Learning OutcomeCognitiveLevels

1 Introduction Candidates should be able to: K U A

1.1 Microeconomics a. Statetheimportanceofstudyingeconomics *

b. Differentiatebetweenmicroeconomicsandmacroeconomics *

c. Identifyandexplainthebasicconceptsofmicroeconomics,i.e.supply/demand,elasticityand

inelasticity,consumerpreferences,supplydemandcurveandequilibrium*

d. Discusstheproductionfunction *

e. Discussthetermsopportunitycost,sunkcost,marginalcost,averagecost,productioncost *

1.2 Macroeconomics a. Discussthebasicframeworkofmacroeconomics,i.e.NationalIncome,Ination,

Unemployment,ExchangerateandTradeImbalances*

b. Discussthemacroeconomicgoalsofachievingfullemployment,economicgrowthandstability *

c. Discussmarginalbenetandmarginalcostandtherelationshipbetweenthetwo *

d. Discussconsumerandproducersurplus *

e. Explaindeadweightloss,overproduction,underproduction *

f. Explaintheconceptoftradeoffs *

g. Describethecharacteristicsofperfectcompetition,oligopoly,monopoly,monopolistic

competition*

h. Recalltheprinciplesofmacroeconomicpoliciesforasustainableeconomy *

1.3 Macroeconomicmethods a. Identifytheimportanceoftheory,dataandforecasting *

1.4 Modernmacroeconomics a. Recallthecontroversiesinmodernmacroeconomics *

2. National Income and

Demography Candidates should be able to: K U A

2.1 Conceptsofnational

income

a. Explaineconomicmodels *

b. Listthedifferentmeasuresofnationalinputandoutput *

c. DeneNationalIncomeandexplainwhythisisimportantwhenaimingtoachieveeconomic

growth*

d. DeneandexplainGrossNationalProduct *

e. DeneandexplainGrossDomesticProduct *

f. Recalltheformulaofexpenditure-approachmethodforcalculatingGDP *

g. ExplaintheExpenditureapproach *

h. RecalltheformulaforIncomeapproachmethodofcalculatingGDP *

i. ExplaintheIncomeapproach *

j. ExplaintheoutputmethodofcalculatingGDPandhowdoesthisapproachavoidtheproblems

ofdoublecounting*

k. ListtheproblemsinusingGNPasameasureofwelfare *

l. Denepovertyreductionstrategypapers(PRSPs) *

m. Denesocialsafetynetsorsocialeconomicsafetynets *

n. Listthetypeoftransfersthatsafetynetsusuallyinclude *


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o. InterprettheLorentzcurveandexplainhowitportraysinequitabledistributionofincome *

3. Ination Candidates should be able to: K U A

3.1 Conceptsofination a. Listandexplainthetypesofination(costpush,demandpullwage,pricingpower,sectoral

ination)*

c. Recalltheconceptofhyperinationandscalination *

d. Deneanddiscusstheimpactofstagation,deation,disination,reation,depression *

e. Interpretthenegativeimpactsofination *

f. Interpretthepositiveimpactsofination *

g. Differentiatebetweeninationrateandthepricelevel *

h. DeneGDPdeator *

i. DeneConsumerPriceIndex(CPI)orheadlineination *

j. RecalltheformulaforcalculatingCPIforsingleandmultiplegoods *

k. ListthedifferentpriceindicesusedinPakistanoverthescalyear *

l. DiscusshowinationismeasuredinPakistan *

m. IdentifythereasonswhyinationinPakistanhasreacheddoubledigitsintherecentyears *

4. Unemployment Candidates should be able to: K U A

4.1 Conceptsofunemployment a. Listandexplainthedifferenttypesofunemployment *

b. Recalltheformulatocalculatetheunemploymentrate *

c. Discusthecausesofunemployment *

d. DeneOkunsLaw *

e. DenetheconceptofPhillipscurve *

f. Recalltheshortrun/longrunPhillipscurve *

g. ExplainthePhillipsCurveconceptusingaggregatesupply/aggregatedemandandtheoutput

gap*

h. Explainthefactorsthatinuenceshortrun/longrunaggregatesupplyandrealGDP *

i. Explainmovementalongthelong-runandshort-runaggregatesupplycurves *

5. Trade Balance and

Exchange Rate Candidates should be able to:K U A

5.1 Trad eBalance a. Expla inthep urpo seofbalanceofp aym ent(BoP)acco unt *

b. ListthepaymentsincludedintheBoP *

c. RecallthereportingformatforcalculatingtheBoP *

d. Deneandexplaintheconceptofcurrentaccountandcapitalaccountanddiscussthe

relationshipbetweenthetwo*

e. Deneandexplainbalanceoftrade,tradedecit,tradesurplus *

f. DiscusstheBoPaccountsofPakistan *

5.2 Exchangerate a . De nee xc hang eratesystem *

b. Listanddenethetypesofexchangerates *


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c. Differentiatebetweennominalandrealexchangerates *

d. Discussthecrucialroleofinterestratepolicyinthecoordinationofmonetaryandexchange

ratepolicies*

e. Comparerealinterestratestonominalinterestrates *

f. Discusstheimpactofchangeininterestratestoexchangerates *

g. Deneclosedeconomyandopeneconomy *

h. DiscusstheexchangeratepoliciesinPakistan *

6. Money Candidates should be able to: K U A

6.1 Evolutionofmoney a. Deneandexplainthebasicfunctionsofmoneyanddiscusswhychequesandcreditcardsare

notcountedasmoney*

b. DiscusstheevolutionofthevariousformsofmoneyinPakistan *6.2 MonetaryTheories a. Recal lthequantitytheoryofmoney *

b. Denetheliquiditypreferencetheory *

c. Denetheportfoliomanagementtheory *

7 Demand and

Supply of Money Candidates should be able to: K U A

a. Explainthedemandformoneyinaneconomy *

b. Illustratethefourmainfactorsthatinuencethedemandformoney *

c. Interpretthecreationofmoney *

d. Illustratetheexpansionofcreditthroughthebankingsystem *

e. ExplainthecompositionofM1,M2andM3measuresofmoney *

f. DescribethecomponentsofReserveMoney(M0)andMoneyMultiplier *

g Interpretthebehaviorofthemoneymultiplieranditspolicyimplications *

8. Objectives of Monetary

Policy Candidates should be able to: K U A

a. SummarizetheobjectivesofaMonetaryPolicy *

b. DiscussthemonetarypolicytoolsundertakenbytheCentralBanktostabilizeination *

c. Discusstheconceptofcontractionarymonetarypolicy *

d. Discusstheconceptofexpansionarymonetarypolicy *

9. Objective of Fiscal Policy Candidates should be able to: K U A

a. Discussthescalpolicytoolsundertakenbythegovernmenttostabilizetheeconomy *

b. Explaintheconceptofcrowdingouteffect *

c. Explaindiscretionaryscalpolicyanditslimitation *

d. Explainautomaticstabilizers *

e. Differentiatebetweendiscretionaryscalpolicyandautomaticstabilizers *


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10. Transmission Mechanism

of Monetary Policy andthe impact of Banking

Sector Credit Candidates should be able to: K U A

10.1 Channelsthroughwhich

monetarypolicyaffects

theeconomy

a. Deneacreditchannelandexplaintheimplicationsthatanincrease/decreaseinthepolicy

rateshasoneconomicgrowth,inationandlending*

b. Explaintheimpactofanincrease/decreaseinthepolicyratesunderthemoneyorinterestrate

channelonconsumption,investmentinationandeconomicgrowth*

c. Explaintheimpactofanincrease/decreaseinthepolicyratesundertheexchangeratechannel

oncurrency,imports,exports,economicgrowthandination*

d. Demonstratetheimpactoftheincrease/decreaseinthepolicyratesundertheassetprice

channelonwealth,assets,economicgrowthandination*

11. Central Banks and

Monetary PolicyRegimes Candidates should be able to: K U A

a. DeneMonetarytargeting *

b. DeneInationtargeting *

c. DiscussthevariouschoicesofpolicyanchorVolumeofmoneyInterestrateExchangerate

*

d. Illustratetherelationshipbetweenexchangerateandmonetarypolicy *

e. Comparetheeffectsofthemonetarypolicyunderaxedandaexibleexchangerateregime *

f. ProvidebriefoverviewofthemonetarypolicyandtheroleoftheStateBankofPakistan *

12. ImpactofFiscaland

MonetaryPolicyand

Equilibr ium C andidate sshouldbeabl eto: K U A

a. Denepolicymix *

b. Explainwhataspectsoftheeconomythemixofscalandmonetarypolicyaimstoinuence *

c. IllustratetheimpactofscalpolicyonAD-ASequilibrium *

d. IllustratetheimpactofmonetarypolicyonAD-ASequilibrium *

e. Analyzetheimpactofscalandmonetaryintheshortrunvsthelongrun *

f. Comparetheeffectsofthescalpolicyunderaxedandaexibleexchangerateregime *

g. InterpretthescalandmonetarypolicyrelationshipasappliedtoPakistanseconomy *

13. The World Economy:

International Monetary

Institutions Candidates should be able to: K U A

13.1 Historyandoverview a. ProvideabriefhistoryoftheInternationalMonetaryInstitutions *

b. DiscusstheobjectivesofIMF,WorldBank,AsianDevelopmentBankandBankofInternational

Settlement*

c. Recalltheworldcrisisof2008anditsimpactonthebankingindustry *

d. ExplaintheroleofinternationallendersindebtmanagementandpovertyreductionofPakistan *

e. IdentifytheperformancecriteriaoftheIMFprogram *


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8 Scheme of Assessment

a) Thepatternoftheexaminationpaperalongwithmarksdistributionisasfollows:

Type of Question No. of Questions Marks / Question Total Marks

MCQs 30 1.5 45

CRQs 7 5 35

ERQs 2 10 20

Total 39 100

b) Therewillbeoneexaminationforthecourse.

c) Thedurationoftheexaminationwillbe3hours.

d) AllConstructedandExtendedResponseQuestionswillbeinabookletwhichwill

alsoserveasananswerscript.

Key Denitions

i) Multiple-Choice Questions (MCQs)

Multiple-choicequestionisaformofassessmentinwhichrespondentsareaskedtoselectthe

bestpossibleanswer(oranswers)outofalistofchoices.Onlyoneanswercanbekeyed

ascorrect.

ii) Constructed Response Questions (CRQs)

ConstructedResponsequestionsareopen-ended,shortanswerquestionsthatmeasure

application-levelcognitiveskillsaswellascontentknowledge.Thesequestionsprovide

candidateswiththeopportunitytogenerateandweaveideasintoashortresponse.The

candidatesuppliesaresponseintheformofafewsentences,agraphicorganizer,orasimple

drawing/diagramwithexplanation.

iii) Extended Response Questions (ERQs)

Extendedconstructed-responsequestionsarelengthierandmorecomplexexercisesthatallow

foranerlevelofdiscriminationinscoringtheresponses.Extended-responsequestionsrequire candidatestoconsiderasituationthatdemandsmorethananumericalresponseorashort

verbalcommunication.Candidatesarerequiredtomodel,asmuchaspossible,realproblem

solvinginalarge-scaleassessmentcontext.


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Recommended Readings

1. Pakistan,InstituteofBankers Economics2011

2. Pak istan,Insti tuteofBankers MacroEconomicsandF inanc ialSy stemofPak is tan

3. CharteredBanker EconomicEnvironment,4thEdition

4. CharteredBanker FinancialEconomicsBook1&2,5thEdition

Supplementary Readings:

1. Samuelson&Nordhaus(latesteditionavailable) Economics

2. Lipsey&Chrystal( latesteditionavailable) Economics

3. Miller&Pulsinelli(latesteditionavailable) ModernMoney&Banking

4. StateBankofPakistan MonitoryPolicy

9 Recommended Texts& Reference Materials


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10 Denition of Cognitive Levels& Command Words of the SLOs

i) Cognitive Levels (Knowledge, Understanding and Application)

Knowledge (K)

Thisrequiresknowingandrememberingfactsandgures,vocabularyandcontexts,andtheability

torecallkeyideas,concepts,trends,sequences,categories,etc.Itcanbetaughtandevaluated

throughquestionsbasedon:who,when,where,what,list,dene,identify,label,quote,name,

state,etc.

Understanding (U)

Thisrequiresunderstandinginformation,graspingmeaning,interpretingfacts,comparing,

contrasting,grouping,inferringcauses/reasons,seeingpatterns,organizingparts,makinglinks,

summarizing,solving,identifyingmotives,ndingevidence,etc.itcanbetaughtandevaluatedthroughquestionsstartingwith:why,how,show,demonstrate,paraphrase,interpret,summarize,

explain,prove,identifythemainidea/theme,predict,compare,differentiate,discuss,chartthe

course/direction,report,solve,etc.

Application (A)

Thisrequiresusinginformationorconceptsinnewsituations,solvingproblems,organizing

informationandideas,usingoldideastocreatenewones,generalizingfromgivenfacts,analyzing

relationships,relatingknowledgefromseveralareas,drawingconclusions,evaluationworth,

etc.Itcanbetaughtandevaluatedthroughquestionsstartingwith:distinguish,analyze,show

relationship,proposeanalternative,prioritize,givereasonsfor,categorize,illustrate,corroborate,compareandcontrast,create,design,formulate,integrate,re-arrange,reconstruct/recreate,

reorganize,predictconsequencesetc.

ii) Denition of Command Words

Knowledge

Arrange: Toputsomethinginaparticularorder

Dene(theterm

orterms):

Onlyaformalstatementorequivalentparaphraseisrequired.Noexamplesneedtobegiven.Specifymeaning.

Find: Ageneraltermthatmayvariouslybeinterpretedascalculate,measure,determineetc.

Give: Providemeaningorquantityorafactaboutsomething

Identify: Describewithspecicexamplesofhowagiventermorconceptisappliedindailylife

List: Nameitem-by-item,usuallyinoneortwowords,preciseinformationsuchasdates,characteristics,places,names.

Measure: Todetermineextent,quantity,amountordegreeofsomethingasdeterminedbymeasurementorcalculation

Name: Mentionthecommonlyusedmeaningsofthings,objects,people,books,etc

Outline: Impliesbrevity,i.e.restrictingtheanswertogivingessentials

Recal l: Tobringbacktomindandwritedown,asitisgiveninthetextyouhavealreadymemorized

Recognize: Involveslookingatagivenexampleandstatingwhatitis

Skim: Toreadquicklytosearchforkeyinformation


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State: Impliesaconciseanswerwithlittleornosuppor tingargument

Use: Todeploytherequiredattributeinaconstructedresponse

Write: Toconstructfullsentencesofcontinuousprose,notabbreviatedtext

Understanding

Acknowledge: Toacceptthat istrue

Appreciate: Tojudgewithheightenedperceptionorunderstanding

Arrange: Toputsomethinginparticularorder

Clarify: Impliesfurtherexplanationofanygiveninformationthatelaboratesthekeycomponents

Comment: Presentaninformedopinion

Compare: Listthemaincharacteristicsoftwoentitiesclearlyidentifyingsimilarities(anddifferences).Identifysimilaritiesanddifferences.

Comprehend: Tounderstandsomethingthatiscomplicated/difcult

Conceptualize: Makeanunderstandingonagiventopicwiththehelpofexamples,graphsanddata,etc

Convey: Useorapplyappropriatelyincontext

Deduce: Gobeyondtheinformationgiventodrawaconclusionwhichisnotexplicitlystatedinthestimulusmaterial

Describe: RequiresCandidatestostateinwords(usingdiagramswhereappropriate)themainpointsofthetopic.Itisoftenusedwithreferenceeithertoparticularphenomenaortoparticularexperiments.Intheformerinstance,thetermusually

impliesthattheanswershouldincludereferenceto(visual)observationsassociatedwiththephenomena.

Develop: Tomakeanargumentorideasclearerbystudyingitinmoredetail.Tobuildastatement

Differentiate: Identifythosecharacteristicswhichalwaysorsometimesdistinguishtwocategories

Discuss: Presentadvantagesanddisadvantagesorstrengthsandweaknessandgiveaconclusion

Distinguish: Toidentifythosecharacteristicswhichalwaysorsometimesdistinguishbetweentwocategories

Draw: Impliesasimplefreehandsketchordiagram.Careshouldbetakenwithproportionsandtheclearlabelingofparts.

Elaborate: Clarifyorenrichgivenstatementsordenitions,byprovidingrelevantdetailsorexamples

Eliminate: Toremoveavariablefromtwoormoresimultaneousequations

Establish: Toprovecorrectortrueonthebasisoffacts,argumentorotherevidencetocometoconclusion

Explain: Mayimplyreasoningorsomereferencetotheory,dependingonthecontext

Explore: Toexamineordiscusssomethingcarefullyinordertondoutmoreaboutit

Express: Useappropriatevocabulary,languagestructureandintonationtocommunicatethoughtsandfeelings

Followinstruction: Demonstrateanunderstandingoftheinformationgivenespeciallytherequiredsequenceofevents

Highlight: Tobringtofront,makeevident,bringtolight,withemphasis

Identify: Selectthemostappropriatefrommanypossibilitiesonthebasisofrelevantcharacteristics.ItwillnotnormallybeexpectedthattheCandidatejustiesthechoiceunlessspecicallyaskedtodoso.

Illustrate: Togiveclearexamplestostate,clarifyorsynthesizeapointofview

Infer: Gobeyondtheinformationgiventoidentifywhatisimpliedbutnotstated

Interpret: Clarifyboththeexplicitmeaningandtheimplicationsofgiveninformation

Investigate: Thoroughlyandsystematicallyconsideragivenproblemorastatementinordertondouttheresultorruleapplied


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Makearelationship: Putdifferentitemstogethertodevelopasetofrelateddata

Outline: Setoutthemaincharacteristics

Paraphrase: Repeatatextusingdifferentwords

Pointout: Pickoutandrecognizespecicinformationfromagivencontentand/orsituation

Practice: Doinganactivityortrainingregularlysothatyoucanimproveyourskills

Predict/anticipate: Makeinferencesaboutprobable/possibleturnsofeventfromtheinformationgivensofar

Present: Towritedowninalogicalandsystematicwayinordertomakeaconclusionorstatement

Prove: Prop oseab asetosup po rttheo utco me

Rec ti fy: Toco rrec tsom ethingthatiswro ng

State: Impliesaconciseanswerwithlittleornosupportingargument

Suggest: Toputforwardanideaoraplan

Summarize: Writeashorterversionofagiventextcapturingthemainpointsandeliminatingdetail.Thewritingmustbegrammaticalandthereferentofeachstatementmustbeclear.

Verify: Toprove,checkordeterminethecorrectnessandaccuracyoflaws,rulesorreferencegiveninthesettask

Application

Analyze: Useinformationtorelatedifferentfeaturesofthecomponentsofspeciedmaterialsoastodrawconclusionsaboutcommoncharacteristics.Breakinformationintocomponentpartsandidentifycharacteristics.

Advise: Suggestsolutions,withjustication,toproblems

Apply: Tousetheavailableinformationindifferentcontextstorelateanddrawconclusions

Assess: Makeaninformedjudgment

Calculate: Showworkingstoarriveatanumericalanswer

Clarify: Impliesfurtherexplanationofanygiveninformationthatelaboratesthekeycomponents

Classify: Stateabasisforcategorizationofasetofrelatedentitiesandassignexamplestocategories

CompareandContrast: Involves(a)listingthemainpointsorcharacteristicsoftwodistinctand(b)clearlyidentifyingsimilaritiesanddifferencesbetweencharacteristics

Compose: Formapieceofwritingwithanumberofparts

Comprehend: Tounderstandsomethingthatiscomplicated/difcult

Construct: Tobringtogethergivenelementsinaconnectedorcoherentwhole

Convey: Useorapplyappropriatelyincontext

Demonstrate: Toshowbyargument,factsorotherevidencesthevalidityofastatementorphenomenon

Derive: Toarr iveatagener alfor mulabycalculatingstepbystep

Elaborate: Clarifyorenrichagivenstatementordenition,byprovidingrelevantdetailsorexamples

Evaluate: Makeajudgmentbasedonevidence

Formulate: Todevelopaplanorproposalanddecideallthedetailsofhowitwillbedone

Portray: Todescribeorrepresentsomethingorsomeone.Todescribeorshowsomeoneorsomethinginaparticularwayaccordingtoyouropinionofthem

Predict/anticipate: Makeinferencesaboutprobable/possibleturnsofeventfromtheinformationgivensofar

Summarize: Toexpressthemostimportantfactsandideasinashortandclearform


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Thissectionpertainstomid-streamJAIBPcandidates(i.e.thoseISQcandidateswhoenrolledand

appearedfortheJAIBPexamspriortoJuly2011andhavenotcompletedtheirJAIBPasofJuly2011).Mid-streamJAIBPcandidatesarerequestedtoreviewthissectionthoroughly.Thissectionprovides

mid-streamcandidateswiththedetailsofthetransitionprocess,theimpactthatthestructural

changesintheJAIBPprogramwillhaveonthemandhowtheywillbefacilitatedtocompletetheir

JAIBPprogramunderthenewstructure.

Old Structure New Structure

Stage 1

BusinessCommunicationforFinancialServices* BusinessCommunicationforFinancialServices*

LawsRelatingtoFinancialServices ** IntroductiontoFinancialSystemsandBankingRegulations **

AccountingforFinancialServices *** InformationTechnologyinFinancialServices ***

MacroEconomicsandFinancialSystemofPakistan **** BranchBanking****

Stage 2

InformationTechnologyinFinancialServices *** AccountingforFinancialServices ***

LendingOperationsandRiskManagement** Lending:Products,OperationsandRiskManagement**

HumanResourceManagementBasicPractices** HumanResourceManagementandOrganizationalBehavior **

MarketingofFinancialServices *** Economics**

Stage 3

MonetaryEconomics** MarketingofFinancialServices ***

InternationalTradeFinance&ForexOperations * FinanceofInternationalTrade&relatedTreasuryOperations **

ManagementAccountingforFinancialServices * ManagementAccountingforFinancialServices *

* Same as before in terms of sequence

** Expansion in contents

*** Changed the sequence of appearance

**** New or changed course

ThestructuralchangesmadetotheISQprogramarediscussedindetailbelow:

Stage shifts

AccountingforFinancialServiceshasbeenmovedfromStage1toStage2

InformationTechnologyinFinancialServiceshasbeenmovedfromStage2toStage1

MarketingofFinancialServiceshasbeenmovedfromStage2toStage3

Course merger/ restructuring

MacroEconomicsandFinancialSystemsofPakistanhasbeenbrokenintotwocomponents:

i) Therstcomponent,namelyMacroEconomicshasbeenmergedwithMonetary EconomicsandtheresultantcoursehasbeennamedEconomics

Annexure 1 Transition Processfor Mid-stream Candidates


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ii)Thesecondcomponent,namelyFinancialSystemofPakistanhasbeenmergedwithLaws

RelatingtoFinancialServicesandtheresultantcoursehasbeennamedIntroductionto FinancialSystems&BankingRegulations.

ThismeansthattheEconomicssyllabuswillnowcoverbothmacroandmonetaryeconomics,

whereasLawsrelatingtoFinancialServicesandFinancialsystemofPakistanwillbecovered

inthesubjectnamely,IntroductiontoFinancialSystems&BankingRegulations.

WehavealsointroducedanewcourseBranchBankingasitisacrucialpillarofthebanking

sectorandrequiresadedicatedsubjectforitspeculiaritiestobeaddressedindetail.

Impact of Structural Changes on Mid-stream Candidates

Theabove-mentionedstructuralchangesoftheJAIBPprogramwillimpactthemid-stream

candidatesinseveralways.Hence,thereisaneedtocreateabridgetohelpmid-stream

candidateswhoareintheprocessofcompletingtheircourserequirementsconverttothe

newJAIBPstructure.

ThesixdifferentwaysinwhichMid-streamcandidateswillbeaffectedareasfollows:

1 Course Equivalence

Thetablebelowdetailshowequivalencesfor8courses(withnoneoronlyminorchanges)

intheexistingstructurewillbehandled:

Straight Equivalence

Subjects based onOld JAIBP Syllabus

Corresponding Equivalent SubjectsIn The New JAIBP Syllabus

Subjects with no structural changes:

If the mid-stream candidate has passed: s/he will be exempted from:

BusinessCommunicationforFinancial Services BusinessCommunicationforFinancialServices

AccountingforFinancialServices AccountingforFinancialServices

InformationTechnologyinFinancialServices InformationTechnologyinFinancialServices

MarketingofFinancialServices MarketingofFinancialServices

ManagementAccountingforFinancialServices ManagementAccountingforFinancialServices

Subjects with minor course enhancements:

If the mid-stream candidate has passed: s/he will be exempted from:

LendingOperati onsandRiskManagement Lending:Produc ts,OperationsandRiskManagement

HumanResourceManagementBasicPractices HumanResourceManagementandOrganizationalBehavior

InternationalTradeFinance&FOREXOperations FinanceofInternationalTrade&relatedTreasuryOperations

If the mid-stream candidate is yet to pass any of the above subjects, now they will have to passthe equivalent subjects as per the new structure


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ISQ Syllabus Guide28 ISQ Syllabus Guide28

Equivalence for Restructured/ Merged Courses

Fortheremaining3coursesintheJAIBP,namelyLawsRelatingtoFinancialServices,MacroEconomicsandFinancialSystemofPakistanandMonetaryEconomics,majorstructuralchanges

havebeenmade.Allpossiblescenariosformid-streamcandidateshavebeencapturedinthe6

casesgivenbelow.

Case 1

IntheoldJAIBPstructure,ifthemid-streamcandidatehasNOTpassedbothLawsRelatingto

FinancialServicesandMacroEconomicsandFinancialSystemofPakistan,s/hewillhaveto

appearinIntroductiontoFinancialSystems&BankingRegulations.

Case 2IntheoldJAIBPstructure,ifthemid-streamcandidatehaspassedbothLawsRelatingtoFinancial

ServicesandMacroEconomicsandFinancialSystemofPakistan,s/hewillbegivenanexemption

inIntroductiontoFinancialSystems&BankingRegulationsinthenewstructure.

Case 3

IntheoldJAIBPstructure,ifthemid-streamcandidatehasonlypassedLawsRelatingtoFinancial

Services,orhasonlypassedMacroEconomicsandFinancialSystemofPakistan,s/hewillhaveto

appearinIntroductiontoFinancialSystems&BankingRegulationsasperthenewISQstructure.

Case 4

IntheoldJAIBPstructure,ifthemid-streamcandidatehasonlypassedMacroEconomicsand

FinancialSystemofPakistanandhasnotpassedMonetaryEconomics,s/hewillhavetoappear

inEconomicsasperthenewISQstructure.

Case 5

IntheoldJAIBPstructure,ifthemid-streamcandidatehaspassedbothMacroEconomicsand

FinancialSystemofPakistanandMonetaryEconomics,s/hewillbegivenanexemptionin

Economicsinthenewstructure.

Case 6

IntheoldJAIBPstructure,ifthemid-streamcandidatehaspassedLawsRelatingtoFinancial

Services,MacroEconomicsandFinancialSystemofPakistanandMonetaryEconomics,

s/hewillbegivenanexemptioninIntroductiontoFinancialSystems&BankingRegulations

andEconomicsinthenewstructure.

NOTE: All mid-stream candidates who have more than 4 courses remaining to complete their JAIBP

will have to pass an additional Branch Banking course.

2 Stage Completion

ThreecourseshavebeenmovedtoaligntheJAIBPcoursesbetterwiththerequirementsinthe

careersofPakistanibankers.Detailsaregiveninthetablebelow:


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Course Name Stage shift

Acco unt ingfo rF inancialS ervice s Movedd ownf ro mStag e1toStag e2

InformationTechnologyinFinancialServices MovedupfromStage2toStage1

MarketingofF inancialS ervice s Movedd ownf ro mStag e2toStag e3

Detailsofhowdifferentscenarioswillbehandledaregivenbelow:

Astagecompletedbyacandidateaspertheearliercoursestructurewillremaincompleteafter

thesechangestakeeffect.However,suchmid-streamcandidateswillberequiredtofulllthe

stagecompletionrequirementsasperthenewcoursestructureandpasstheremainingcourses

inthenexttwoattempts(i.e.inWinter2011andSummer2012).

Mid-streamcandidateswhohavestartedastagebutnotyetcompleteditwillnowhavetofulll

therequirementsofstagecompletionasperthenewcoursestructure.

3 Stage Commencement Eligibility

Allmid-streamcandidateswillhavetocomplywiththerequirementstostartthenextstage

asperthenewcoursestructure.Speciccasesforeachstagearegivenbelow:

TostartStage2,mid-streamcandidateswillhavetopassatleasttwocoursesofStage1asper

thenewstructureandappearfortheremainingcoursesinStage1inthesamesession.

TostartStage3,candidateswillhavetopassallcoursesofStage1andatleasttwocourses

ofStage2asperthenewcoursestructureandappearfortheremainingcoursesinStage2inthe

samesession.

4 ISQ Completion for Mid-stream Candidates who have 4 or Less Courses Remaining

Allmid-streamcandidateswhohave4orlesscoursesremainingforcompletionoftheirJAIBPwill

nothavetoappearfortheadditionalBranchBankingcoursetocompletetheirJAIBP,provided

thattheypasstheremainingsubjectsbySummer2012.However,suchcandidatescanopttotake

theBranchBankingcourseiftheysowish.

5 Additional Time Period and Chances Allowed for Mid-stream Candidatesi) Mid-stream candidates who have to take the additional Branch Banking Course

Allmid-streamcandidateswith5ormorecoursesremainingwillhavetotaketheadditional

BranchBankingCourseunderthenewstructureandwillbeallowed12chancesoratime

periodof6yearstofullltheircourserequirementsfortheISQprogram.

ii) Mid-stream candidates who DO NOT take the additional Branch Banking Course

Allmid-streamcandidateswhocompletetheISQprogramaccordingtotheoldstructureand

have4orlesscoursesremainingwillbeallowed10chancesoratimeperiodof5years

tofullltheircourserequirementsfortheISQprogram.


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ISQ Syllabus Guide30 ISQ Syllabus Guide30

6 Award of Associate Chartered Banker title by UKs Chartered Banker Institute

Allmid-streamcandidateswhowishtoacquiretheAssociateCharteredBankertitlebyUKs

CharteredBankerInstitutewillberequiredtoappearforaComprehensiveTest.

Test schedule and details will be available at a later date.


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