Banking, credit and debt
How banks make money and how borrowing works. These lessons start with the bank itself, its balance sheet, margin and capital, then move to the real cost of a loan, how lenders measure and price credit risk, credit cards and revolving debt, refinancing and restructuring, and finally the bank statement and the cash a business holds.
A fictional bank, loan, card and cafe carry the mechanics so every number can be checked. JPMorgan Chase and HSBC, DBS and Citigroup, Capital One and American Express, Energizer and Samsonite, and Alphabet and Meta Platforms then show the same ideas in published accounts and releases, including where their measures differ.
6 lessons, about 2 hours 30 minutes of reading in all. Start at the top and go in order.
After this module you will be able to
- describe how a bank earns from the gap between loan and deposit rates, and why capital and liquidity protect it
- work out the true yearly cost of a loan including fees, flat rates and early repayment
- calculate expected loss and the rate needed to cover credit risk
- explain how card interest, grace periods and minimum payments determine how long debt lasts
- test whether a refinance pays off and explain how restructuring differs
- reconcile a bank statement to the books and read a company's cash position
The lessons
- How banks workHow a bank makes money from the gap between loan and deposit rates, why capital matters, and how JPMorgan and HSBC compare, with a live bank calculator.
- The true cost of borrowingWhy a loan's quoted rate understates its cost: APR, fees, flat rates and early repayment, with a live loan calculator and a comparison of two offers.
- Credit risk and expected lossHow lenders measure credit risk with default probability and loss given default, price it into loan rates, and how DBS and Citigroup compare, with a calculator.
- Credit cards and revolving debtHow credit card interest, grace periods and minimum payments work, how long a balance takes to clear, and how Capital One and Amex losses compare.
- Refinancing and restructuringHow to tell whether refinancing pays off: monthly saving, break-even, term trap and costs, plus two 2025 company refinancings and how restructuring differs.
- Bank reconciliation and cashHow to reconcile a bank statement to the books, which items need entries, and how Alphabet and Meta hold cash, with a live reconciliation calculator.