Essentials of the Global Financial Industry

Overview:

Introduction:

This training program offers fundamental knowledge and practical insights into the worldwide financial sector. Led by experts with real-world case studies, the program equips professionals for success in the global financial ecosystem.

Program Objectives:

At the end of this program, participants will be able to: 

• Utilize their analytical talents effectively in the global capital markets.

• Gain a thorough understanding of contemporary financial methods.

• Display high levels of proficiency in financial regulation.

• Describe the interactions of financial instruments in contemporary markets.

• Utilize cutting-edge methods for financial risk management.

• Apply best practices in the buy-side or sell-side of financial institutions.

Targeted Audience:

• Financial professionals.

• Investors.

• Banking executives.

• Regulators.

• Economic analysts.

Program Outline:

Unit 1:

Financial Institutions and Business Models:

• Understanding the maturity transformation model, deposit insurance, resolution, and living wills in financial institutions.

• Exploring asset/liability management, risk tolerance, and economic capital in insurance companies.

• Analyzing the structure and functions of Investment Banks (IB’s) including financing, client facilitation, and mergers and acquisitions.

• Contrasting business models of buy side firms, asset managers, sell side firms, IB’s, fund management, pension funds, and defined benefit versus defined contribution.

• Evaluating investment management strategies, performance ratios, benchmarks, passive versus active management, hedge funds, and regulatory oversight.

Unit 2:

Central Banks and Monetary Policy:

• Studying the monetary policies of major economies such as the US, EU, UK, Japan, and China, including tools like Quantitative Easing (QE) and Capital controls.

• Exploring traditional and unorthodox techniques of open market operations, liquidity provisioning, and reserves management.

• Analyzing the influence of short-term rates on long rates, yield curve characteristics, and macro-prudential tools.

• Understanding the role of Emerging Market (EM) central banks in managing FX rates and implications of interest rate policy normalization.

• Investigating FX reserves management, Taylor ratio, and the impact of interest rate policies on asset markets and EM economies.

Unit 3:

Macroeconomic Drivers of Financial Markets:

• Examining macroeconomic factors such as GDP growth, productivity, employment, and interest rate differentials.

• Analyzing the role of emerging markets, FX carry trade, balance of payments, and inflation outlooks.

• Exploring productivity differentials, geopolitical events, commodity markets, and de-globalization themes.

• Assessing the implications of macroeconomic drivers on financial markets and investment strategies.

• Investigating the effects of political crises, currency wars, and trade policies on financial stability.

Unit 4:

Risk Management Overview:

• Understanding the statistical nature of financial risk and summarizing principal types of risk including market, credit, liquidity, sovereign, and systemic risks.

• Exploring methodological principles of Value at Risk (VaR), risk/reward concepts from Capital Asset Pricing Model (CAPM), and modeling risk scenarios.

• Analyzing hedging strategies, derivatives usage, corporate governance issues, and regulatory initiatives like Sarbanes-Oxley and Dodd-Frank Act.

• Assessing risk management techniques such as stress testing, Monte Carlo simulations, and backtesting.

• Investigating operational, legal, and reputational risks, internal risk control processes, and major regulatory frameworks.

Unit 5:

Financial Instability and Systemic Risk:

• Examining historical investment manias and systemic crises such as the 2007/8 financial crisis.

• Analyzing counterparty credit risk, financial contagion, joint probability of defaults, and macroeconomic theories of financial instability.

• Investigating credit cycles, boom/bust cycles, excessive leverage, inadequate capital, and liquidity.

• Exploring Minsky’s view of financial system instability and new directions in explaining non-rational economic behavior.

• Assessing episodic crashes from market microstructure, including events like the 1987 program trading and the 2010 “Flash Crash”.