Introduction: Banking and the management of financial institutions
· The bank balance sheet
· Basic banking
· General principles of bank management
Introduction: Banking and the management of financial institutions
● Liquidity management and role of reserves
● Asset management
● Liability management
● Capital adequacy management
The World of Investment and Merchant Banking
· Evaluation
· Players
· Structure
· Culture
- 74 -
The Customer and Investment Banking
● The role of the IB financial advisor/advisory business—a journey to the top of Maslow’s
pyramid
● How to present value to the client—and get paid for it
● Understanding client needs—an IB diagnostic approach
The Customer and Investment Banking
● Investment banking product and solutions as a spectrum of risk/return and/ or
flexibility/cost alternatives—an IB prescriptive approach
● Tools for aligning client needs with IB financial solutions
● Developing an IB “pitch” book/framework
The banking Business of Equities
· The investment banker’s perspective of the equity business
· Equity underwriting—key players and what they do to remain so
· IPO’s and follow-on issues
The banking Business of Equities
· Secondary trading and business synergies
· The role of venture capital and private equity firms—their evolution, structure,
· participants and investment objectives
· Private equity exit strategies
Economic analysis of financial regulation
· Asymmetric information
· Moral hazard and government safety net
· Too big to fail
· Capital requirements
· Financial supervision
Regulation, Basel II, Solvency II
· Reasons for regulating banks
· The Cooke ratio
· Netting
· Credit risk capital under Basel II
The IB Business of Trading/Derivatives
· The evolution of trading
· The structure of the business—brokers, traders and the sales (advisory) desks
· Market-makers, hedge funds and speculators
· Types of trading—customer and proprietary trading
- 75 -
The IB Business of Trading/Derivatives
· The role of hedge funds—trading styles
· Liquidity and the secondary markets
· How traders make money—spreads, positions, speculation, arbitrage and market
manipulation
· Risk-monitoring and control
Raising Capital:
· Early stage financing and venture capital
· The announcement of new equity and value of the firm
· The rights and its puzzle
· Dilution
· Shelf registration
Options, Futures and Corporate Finance:
● Options
● Call options
● Put options
● An option pricing formula
● Option and corporation decision
Options, Futures and Corporate Finance:
● Derivatives and hedging
● Forward contracts
● Future contracts
● Duration hedging
● Swaps
Mergers, Acquisitions and Divestitures:
· The basic forms of acquisitions
· Synergy
· Side effects of acquisition
· The NPV of a merger
· Friendly versus hostile takeover
· Defensive tactics