How the Financial Markets Work

Course Overview

Over the last years, Financial Markets have been in turmoil.  Some of its high profile losses have led to questioning the business model and investment banking as a whole. 

This is an interactive training programme on Financial Markets, Investment Banking, its merits and downsides.  In two days it provides a bird’s eye view on how international investment banks operate in Capital Markets, Money Markets and Foreign Exchange and their derivatives.

Participants will understand how banks think, what makes them tick and how they see themselves as allocators of capital, problem solvers and risk managers through financial markets.  You will recognise how they meet investors and borrowers needs.  The section on smart money demonstrates how they anticipated the flow of capital and hence how they make money and generate wealth.

At the end of the seminar you will have the necessary building blocks to understand the different approaches leaving you with a comprehensive overview.  You will understand the spirit of Trading and Investment Banking. 

The speaker shares the concepts that have lead market participants from tears to success with great clarity and charisma.

Course Content

Day 1

Introduction:

• Setting the Frame
• Session Outline
• Introductions
• Expectations

An Overview of Financial Markets:

• The Importance of Cashflows
• Money Markets versus Capital Markets

Loans – The Macroeconomic Allocation of Capital:

• The Structure of an Investment Bank
• The Players in Investment Banking
• The Role of Banks as Intermediaries between Borrowers and Investors
• The Interplay between Origination, Sales and Trading
• Syndication of New Issues
• Asset Classes

Financial Markets Regulation:

• Capital Adequacy Requirement
• Basel I
• Basel II
• Source for New Product Development

Time Value of Money and Financial Arithmetic:

• Value of Money over Time
• Reasons for the Change of Value of Money over Time
• A Definition of Interest Rates

Financial Arithmetic and Market Conventions:

• Money Market Formulas (Simple Interest)
• Capital Market Formulas (Compound Interest)
• Interest Rate Conversions
• Market Conventions

The Money Markets:

• Discounted versus interest baring products
• Loans/Deposits, Bills, CD’s
• The History of Money Markets
• The Lender of Last Resort and Repo’s

The Money Market Forwards:

• Forward Forwards
• Forward Rate Agreements (FRA’s)
• Short-term Interest Rate Futures (STIRS)
• Repo’s

The Foreign Exchange Markets:

• Spot FX
• Forward FX
• FX Swaps

Day 2

Capital Markets:

• Equities
• Loans
• Bonds 

Bond Markets:

• Domestic versus International Bond Markets (Eurobonds)
• Bond Pricing Basics
• Bond Risk Basics 

In Search for Higher Returns:  Asset Securitisation

• Collaterised Mortgage Obligations
• Credit Card Receivables
• Credit-linked Notes

Managing Interest Rate Risk:  Interest Rate Swaps (IRS)

• The Swaps Mechanism
• The Uses of Swaps
• Risk Management

The Investment Bank giving Investors What They Want:  Options

• Futures and Options
• Participating on the Upside
• The Option Premium
• Leverage

The Investment Bank Makes Your Dreams Come True:  Structured Products

• Guaranteed Return Products
• Participation Products
• Tailored Baskets Products

The Arbitrage Triangle:

• Cash
• Futures
• Options

The Key to Investment Banking:  Listen for Your Customer’s Needs

• 5-Step Sales Process
• Listening to Your Customer
• Listening for Your Customer’s Needs
• Rapport
• Know Your Client

Smart Money:

• The market is always right
• Buy low, sell high
• The trend is your friend
• Create the idea
• Risk management:  Take only the risks you want and hedge the risks you don’t want
• Lead with your money (buy low)
• Create a trend
• Sell high, but not too high 

Course Summary:

• Putting Financial Instruments Into Context

Delivering this course in-house for you to a number of participants could be very cost effective. Please call us on 020 7387 4484 to discuss this further.

If you have any questions about this seminar please write to us at post@redcliffetraining.co.uk.