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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:
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Utilize their analytical talents effectively in the global capital markets.
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Gain a thorough understanding of contemporary financial methods.
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Display high levels of proficiency in financial regulation.
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Describe the interactions of financial instruments in contemporary markets.
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Utilize cutting-edge methods for financial risk management.
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Apply best practices in the buy-side or sell-side of financial institutions.
Targeted Audience:
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Financial professionals.
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Investors.
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Banking executives.
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Regulators.
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Economic analysts.
Program Outline:
Unit 1:
Financial Institutions and Business Models:
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Understanding the maturity transformation model, deposit insurance, resolution, and living wills in financial institutions.
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Exploring asset/liability management, risk tolerance, and economic capital in insurance companies.
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Analyzing the structure and functions of Investment Banks (IB’s) including financing, client facilitation, and mergers and acquisitions.
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Contrasting business models of buy side firms, asset managers, sell side firms, IB’s, fund management, pension funds, and defined benefit versus defined contribution.
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Evaluating investment management strategies, performance ratios, benchmarks, passive versus active management, hedge funds, and regulatory oversight.
Unit 2:
Central Banks and Monetary Policy:
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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.
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Exploring traditional and unorthodox techniques of open market operations, liquidity provisioning, and reserves management.
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Analyzing the influence of short-term rates on long rates, yield curve characteristics, and macro-prudential tools.
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Understanding the role of Emerging Market (EM) central banks in managing FX rates and implications of interest rate policy normalization.
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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:
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Examining macroeconomic factors such as GDP growth, productivity, employment, and interest rate differentials.
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Analyzing the role of emerging markets, FX carry trade, balance of payments, and inflation outlooks.
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Exploring productivity differentials, geopolitical events, commodity markets, and de-globalization themes.
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Assessing the implications of macroeconomic drivers on financial markets and investment strategies.
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Investigating the effects of political crises, currency wars, and trade policies on financial stability.
Unit 4:
Risk Management Overview:
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Understanding the statistical nature of financial risk and summarizing principal types of risk including market, credit, liquidity, sovereign, and systemic risks.
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Exploring methodological principles of Value at Risk (VaR), risk/reward concepts from Capital Asset Pricing Model (CAPM), and modeling risk scenarios.
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Analyzing hedging strategies, derivatives usage, corporate governance issues, and regulatory initiatives like Sarbanes-Oxley and Dodd-Frank Act.
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Assessing risk management techniques such as stress testing, Monte Carlo simulations, and backtesting.
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Investigating operational, legal, and reputational risks, internal risk control processes, and major regulatory frameworks.
Unit 5:
Financial Instability and Systemic Risk:
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Examining historical investment manias and systemic crises such as the 2007/8 financial crisis.
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Analyzing counterparty credit risk, financial contagion, joint probability of defaults, and macroeconomic theories of financial instability.
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Investigating credit cycles, boom/bust cycles, excessive leverage, inadequate capital, and liquidity.
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Exploring Minsky’s view of financial system instability and new directions in explaining non-rational economic behavior.
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Assessing episodic crashes from market microstructure, including events like the 1987 program trading and the 2010 “Flash Crash”.