Banking Students Run, Hop and Shout in Simulation

The floor of the New York Stock Exchange is sometimes noisy, and so is the bank management class taught by finance Professor Haluk Ünal at the University of Maryland’s Robert H. Smith School of Business. His Master of Finance students shouted, ran, waved their arms and hopped up and down during three-hour bank simulations on Sept. 30 and Oct. 1, 2014, at the school’s satellite campus in Washington, DC.

“You can teach the components of bank management in siloes,” Ünal said. “But you won't be able to teach bank management as a whole unless you go and actually start managing a bank. That is what students did today.”

Working in pairs, teams competed for top composite scores based on multiple dimensions of bank management. “Naturally you want to grow the bank and increase earnings over time,” Ünal told his students. “But while you are doing so, you need to be careful about asset quality, liquidity and capital ratio.”

He said the activity served as a reality check for many students. “You can strategize in a classroom, but executing in a marketplace is tough,” he said. “You have to make decisions quick and act quick.”

The competition, designed and led by Columbia, Md.-based Olson Research Associates, included iPads for each team loaded with simulation software. After each round of trading, students locked in their results and then checked the live standings on a screen at the front of the classroom. “This teaching technology is very attractive,” Ünal said.

Olson Research was founded in 1970 by former Smith Professor Ron Olson, a longtime champion of the school’s endowment that helped launch the Mayer and Senbet Funds. Simulation moderators, who run the same competition with bank managers around the country, said the Smith students compared well to their professional counterparts.