Mastering the Essentials of the Global Financial Industry

Why Attend

Mastering the Essentials of the Global Financial Industry is designed to provide an introductory insight into and overview of the global financial industry, financial markets, and macro-economic drivers of capital flows. It is supplemented with an examination of major financial asset classes, portfolio theory, asset allocation and risk management.

The course will examine the business models and resilience of financial institutions, the activities of buy side and sell side firms with regards to financial products, securities and derivatives, the global regulatory framework and the capacity of financial activity that lead to bouts of financial instability and systemic risk. It will also cover techniques in risk management and the impact of Basel III and other regulations and legislation that have been introduced following the 2007/2008 financial crisis.

Overview

Course Outline

Schedule & Fees

Course Methodology

n/a

Course Objectives

By the end of the course, participants will be able to:

Apply global capital markets analytical skills
Develop a deep understanding of the practices of modern finance
Demonstrate advanced competence within the financial regulatory community
Explain the interrelation of financial instruments in modern markets
Apply state of the art techniques in financial risk management
Apply best practice knowledge within the buy side or sell side of financial institutions

Target Audience

This course is designed to be beneficial for the full spectrum of management personnel, including senior executives, working within the banking sector, asset management companies, sovereign wealth funds, pension funds, hedge funds, as well as those engaged in risk controls in middle and back office functions within the financial services sector. The course is also beneficial for the customers of financial services.

Target Competencies

Modern finance best practice
Global capital markets and global capital flows insight
Thought leadership
Technical proficiency across finance platforms
Best practice analytical skills

Functions and Business Models of Financial Institutions

Commercial banks and deposit takers

Maturity transformation model

Sensitivity of banking sector to market stress

Deposit insurance
Resolution
Living wills
Bail in instruments

Insurance companies

Asset/liability management
Risk tolerance
Economic capital

Structure and functions of Investment Banks (IB’s)

Financing
Client facilitation
Mergers and Acquisitions

Contrast business models of buy side firms

Asset managers and sell side firms
IB’s

Fund management

Pension funds
Defined benefit versus defined contribution

Investment management

Performance ratios
Benchmarks
Passive versus active

Hedge funds

Hedge fund size
Assets Under Management (AUM)/incentive fees business model
Regulatory oversight

Macro-Economic Drivers of Financial Markets

Growth Domestic Product (GDP) growth, productivity, employment, capacity utilization
Increasing role of emerging market (EM) economies, frontier markets and frontier currencies
Interest rate differentials

Comparison of short term rates
US, EU, UK, Japanese rates

Foreign Exchange (FX) carry trade

Traditional pairs and increasing use of dollar as funding currency

Balance of payments, trade imbalances, capital flows
Inflation outlooks for developed and developing economies

Consumer Price Index (CPI) and Producer Price Index (PPI)

Productivity differentials

Costs for labor and capital, and Return on Investment (ROI)

Geo-political events

Political crises, currency wars, trade policy

Commodity markets - supply chain challenges, de-globalization themes

Inflationary impulses, monetary policy response

Monetary Policy of Central Banks

Monetary policies of US, EU, UK, Japan and China

Quantitative Easing (QE)
Outright Monetary Transactions (OMT)
Capital controls

Traditional tools of open market operations

Liquidity provisioning, reserves

Unorthodox techniques

QE/asset purchase programs

Yield curve characteristics

Influence of short term rates on long rates

Macro-prudential tools

Scope and purpose

Status of non-discretionary policy guidelines

Taylor ratio

FX reserves management

Role of EM central banks in managing FX rates

Implications of interest rate policy normalization for asset markets, impact on EM

Overview of Risk Management

Statistical nature of risk versus absence of probabilistic dimension to uncertainty
Summarizing the principal types of financial risk
Types of risk

Market risk and capital adequacy
Credit risk
Liquidity risk
Sovereign risk
Systemic risk
Operational, legal and reputational risk

Methodological principles of Value at Risk (VaR)

Are financial returns normally distributed?

Risk/reward concepts from Capital Asset Pricing Model (CAPM)
Modeling risk scenarios

Stress testing
Regressions based on outlier values
Monte Carlo simulations
Back testing

Hedging strategies

Use of swaps and other derivatives to manage risk

Corporate governance issues

Conflicts of interest
Internal risk control processes
Non-executive directors (NED’s)

Major regulatory initiatives

Sarbanes-Oxley
Dodd-Frank Act
BCBS and Basel II and III
Revamped UK regulatory structure
Financial Stability Board

Root Causes of Financial Instability and Systemic Risk

Historical illustrations of investment manias (e.g. South Sea Bubble, 1929 Crash, 1987 Crash, Asian Crisis, Japanese asset markets crash 1990, Nasdaq Collapse 2000/1)
Special characteristics of the systemic crisis of 2007/8

Counter party credit risk
American International Group (AIG)

Financial contagion
Joint probability of defaults, left tail dependencies, heightened asset movement correlations, tail risk
Macro-economic theory

How satisfactory are mainstream explanations for crashes?

Credit cycles

Boom/bust
Excessive leverage
Inadequate capital and liquidity

Minsky’s view of the inherent instability of financial systems
New directions in explaining “non-rationality” in economic behavior, over-confidence, cognitive and emotional dissonance, “herding behavior”
Episodic crashes from market micro-structure

1987 program trading
2010 “Flash Crash”

Ottawa

Ottawa (Canada)2025-08-18$6975

Washington DC

Washington DC (USA)2026-06-15$6975