BANKGAME Developments In Business Simulation & Experiential Exercises, Volume 17, 1990 180 BANKGAME Achara Chandrachai, Chulalongkorn University ABSTRACT Bankgame is a comprehensive interactive multiperiod banking management business game. It provides a simulated banking environment in which a small group will become the banking management team and operate within banking industry composed of several banking firms. All bankgame companies start the game with the same asset mix, financial structure, and potential for success. Each firm has to make decisions each period concerning interests on deposits, interests on customers loan, amount of customer’s loan, amount of banks’ loans, promotion budget, research and development expense, dividend per share. This decision- making cycle will continue over several periods of simulated business operation until the administrator stop the game and evaluate each firms operations. INTRODUCTION The main functions of management team are investment decisions, financial decisions, and dividend decision. The group participants have to manage their banks in such a way to achieve their objectives. BANK DEPOSITS Three types of deposits are demand deposits, saving deposits and time deposits. At the beginning of the game, the proportion of deposits is 11:14:28. No interest is paid to customers on demand deposits. The manager of each bank has to set the interest rates on time deposits and saving deposits. The amount of deposits each bank will receive depends on interest rates, competitors interest rates promotion budget, R&D expenditures and economic conditions. BANK’S LOAN Three types of bank’s loans are domestic loans, overseas loans and call loans. The manager can raise funds by borrowing from domestic sources. The interest rates on domestic loan is 6 % annually. The bank has to pay back the principal together with interest expenses in equal installments quarterly. besides domestic loins, bankers can raise funds from overseas loans with a 5 % interest rate, but will bear the risk of exchange rate fluctuation. An overseas loan has to be paid back equally within 4 quarters. A call loan is an emergency loan whenever there is a shortage of cash. The interest rate is 10% annually. There is service charge for all types of bank loans. CUSTOMERS’ LOANS The main sources of income for the bank are interests received from overdraft, short-term loans, and long -term loans. The interest rate for any types of loans must be set by the management team. Short-term loans plus interest charges have to be paid back equally within 2 quarters. Long-term loans with interest charges have to be paid back in equal installments within 4 quarters. Each bank has to set the ceiling of each type of customer loans. The actual amount of customer loans will depend on interest rate, promotion expenses, R&D, competition and economic conditions. Each bank receives revenue in form of interest charges plus a 1- % service charge on customer loans. SECURITY INVESTMENT Banks can Buy or sell their securities whenever they have cash surpluses or shortages. The interest will be received from security investments at 7 % annually. ASSUMPTIONS It is almost impossible to simulate the real situation and operations of a bank. Otherwise, the game will become too complicated. So the following assumptions must be made in order to play Bankgame. 1. Cash basis accounting procedures are employed. 2. The legal reserve requirement is 15 % of total deposits. 3. Administrative expenses consist of fixed expenses and variable expenses. 4. Deposit withdrawals are approximately 10-30 % of total deposits. HOW TO MANAGE YOUR BANK To manage your bank successfully the management team has to make the following decisions during each period. 1. The maximum amount of customer loans. * Overdrafts * Short-term loans * Long-term loans 2. Interest rates on three types of customer loans. * interest rate on overdraft accounts * interest rate on short-term loans * interest rate on long-term loans 3. How much to borrow on bank loans. * domestic loans * overseas loans 4. Security investment decisions. * amount of security purchased * amount of security sold 5. Interest rates on bank deposits. * interest rates on saving accounts * interest rates on time deposits 6. Promotion expenditures. 7. R&D expenditures. 8. Dividends per share. To be successful each the management team should assign specific duties and responsibilities to each member of his team. Each team should analyze the situation from financial statements and then make strategic plans carefully. Table of Contents Volume 17, 1990 The Impact of Decision Support Systems on the Effectiveness of Small Group Decisions - Revisited The Relationship Between Financial Performance and Other Measures of Learning on a Simulation Exercise Use and Effectiveness of an Analogy-Based Expert System Suggestions for Computerized Business Authors Dealing with Power: An Experiential Exercise Using Movie and Personal Diary Analysis Techniques A Model for Developing Student Skills and Assessing Outcomes Through Outdoor Training Computer-Aided Exercises Versus Workbook Exercises as Learning Facilitator in the Principles of Marketing Course An Exposition of Guilford's Si Model as a Means of Diagnosing and Generating Pedagogical Strategies in Collegiate Business Education Formal Planning and Simulation Team Performance: A Cross Sectional Approach Cases: Real Organizations in Real Time in the Classroom An Empirical Investigation of the Internal Validity of Marketing Simulation Game An Empirical Evaluation of the Pedagogical Value of Playing a Simulation Game in a Principles of Marketing Course Factors Affecting Effective Teaching of Strategic Planning: Some Preliminary Evidence An Experiential Exercise for Learning About the Relationship Between Organizational Form & the Project Management Process Accounting Communication Skills can be Taught in the Auditing Course Modeling Cost Functions in Computerized Business Simulation: An Application of Duality Theory and Sheppard's Lemma A Life Cycle Analysis of Decision Making for a Strategic Management Team What's the Problem? A Dynamic Model for Teaching Problem Solving Skills Experientially International Currency Fluctuations: Money$im, A Simulation Superstores: A Specialized Retailing Simulation Within a Specialized Marketing Curriculum Factors Affecting Student Perceptions of Learning in a Business Policy Game VC + EL = VL The Name Game: An Experiential Exercise in Intergroup Relations The Effects of Experiential Accounting Work Experience on Student Performance in Intermediate Accounting Courses The Results of Using the Experiential Activity Group Performance Evaluation in a Business Policy Setting Using a Legal Database to Describe the Legal Environment of Marketing (and Business) Matching Environmental Uncertainty and Organizational Configuration An Instructional Computer Simulation of Tampering in QC Executive Evaluation of Student Learning in the Looking Glass Simulation Group Personality Composition and Total Enterprise Simulation Performance An Expert System for Selecting Analytical Techniques for Analyzing Marketing Research Data Effects of Cognitive Styles on Responses in an In-Basket Simulation A Psychometric Analysis of Kolb's Revised Learning Style-Inventory Selecting and Developing Experiential Exercises Using Movies Application of a Real-World Strategic Management Model in the Classroom Demand Equations which Include Product Attributes Consumption as the Objective in Computer-Scored Total Enterprise Simulations The Effects of Decision Format and Evaluation on Simulation Performance, Decision Time, and Team Cohesion The Effects of Computer Related Assignments on Student Performance in Business Administration The Money Game: A Dynamic Simulation Including Random Shocks for Money and Banking Courses Methods for Evaluating Performance on Business Simulations: A Survey The Effects of Synergogy on the Policy Course: Significant Improvements in Student Learning and Teacher Evaluation Conditions and Outcomes of Trust in a Two-Person Bargaining Exercise Bankgame Enhancing Computer Business Simulation with the Use of VGA Graphics An Experiential Approach to Entrepreneurship An Advanced Simulation Method (ASM) for Multiple Objective Problems The Influence of Experiential learning Techniques on Student Recognition of Non-Primary Learning Styles Negotiating Mergers and Acquisitions: A Cocktail Napkin Approach Identification of Unintended Effects in Experiential Laboratory Exercises An Experimental Comparison of Paper and Pencil and Computer Aided Decision Support Tools Porting a Simulation from the IBM World to the Macintosh World A Transaction Cost Analysis of Experiential Learning The Development of Experiential Exercises for Courses in Entrepreneurship and Small Business Management The Assessment Center as and Experiential Classroom Exercise Pricing Strategy Algorithms for Playing Business Simulations Organizational Structures for International Operations: An Experiential Activity Simulation Emphasis in the Business School Capstone Course An Integrated Approach to Computerizing the Business Curriculum Cross-Cultural Business Negotiations Exercise Organizational Socialization and Gender Differences in Students at Work Understanding Student Work Experience: A Content-Analytic Approach Introducing Executive MBA Programs with Management Games An Analysis of Improvement in Business Decision Outcome with Sequential Use of Two Simulation Games Teaching Business Policy Utilizing Mass Lecture and Individual Case Labs Potholes Along the Road to Evaluating Learning Outcomes: The Case of Outdoor Management Training Experiential Learning for Interior Design Students: Using CADD, Lotus 1-2-3, and Wordperfect Cognitive Learning Using a Computer-Based, Qualitative Interactive Business Simulation Sex Discrimination: Does the Woman get the Job or Does the Best Man Win? A Search for Visual Aids to Support Experiential Learning Through the 1990's An Experimental Analysis fo the Effectiveness of Student Role-Playing in Sales Training How to Have Students Learn from their Term Projects Self-Evaluation Exercise (SEE): An Assessment of Class Contribution A Study of the Influence of Team Formation on Attitudes and Performance in Management Games A Hardware Based CIM Simulation Laboratory Model Test Substance Abuse in Organizations Micro Computer Training Models Teaching Forecasting, Cash Budgeting and Inventory Model Building Using SBTools A Comparison of the Effects of Experiential Learning Activities and Traditional Lecture Classes An Adjunct Writing Instruction Assistant, The Computer; With an Illustration Classroom Software for ABC Analysis Utilizing Information Processing Technology to Enhance the Business Policy Simulation Experience Progressive Cases Realistic Job Previews Vs. Traditional Job Previews: Experiencing the Differences and Understanding the Consequences Investment Analysis Using the Pragmatic Multiplier Approach A Computer Simulation Interface for Competitive and Firm Analysis Self-Assessment of Ethical Decision Making Predispositions Preparing Managers for Overseas Assignments An Inquiry into Japanese Marketing: Workshop on Teaching Japanese Marketing The Performance Appraisal Feedback Interview: A Role Play for Human Resources Management Teaching Counselor Selling techniques Using Experiential Techniques to Teach International Topics International Management Simulation Gaming: Current Status and Future Developments A Realism Comparison of Simulation Technologies/Methodologies A Time-Efficient Game to Illustrate Concepts Taught in Management Courses and Management Development Programs Teaching the Management of Technology The Concept of Face and the Applicability of Experiential Exercises in an Oriental Culture's