Financial Instruments and Markets

Agenda Program
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Prague, NH Hotel Prague
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Recent Developments in Global Financial Markets
Regulatory Changes and the New Market Infrastructure
Equity Markets and Instruments
Fixed Income Markets and Instruments
Money and FX Markets
Repos and Securities Lending
Listed and OTC Derivatives
Hedging Equity, Interest Rate, FX and Commodity Risk
The Shadow Banking System
The purpose of this seminar is to give you a comprehensive overview global financial markets and of their instruments.

We start with a general overview and discussion of recent developments in the global financial markets, including important regulatory developments, such as Basel III, the Trading Book Review, MiFID II, EMIR etc.

We then take a closer look at equity markets. We present and describe different types of equity instruments, we explain how they are traded in the primary and secondary markets, and we discuss their risk and return characteristics.

After this, we turn to look at fixed-income markets. We give examples of instruments traded in these markets, and we describe their investment characteristics and risks.

Further, we explain developments in the global money and FX markets and explain the importance of these markets in international financial intermediation. During his session, we will also focus on "repos" and "securities lending" markets, which play a crucial role in the financing of securities transactions. We also look at commodities markets and discuss how volatility in these markets can affect the financial health of corporations, banks and countries.

We give a thorough introduction to derivatives markets. We explain the main characteristics of derivative instruments, and we discuss the differences between listed and OTC instruments. We also discuss the proposed regulatory changes, including move to centralized trading and clearing, and we discuss possible consequences of this regulation. We present and describe instruments such as futures, options, swaps, credit derivatives, and we explain their uses in trading and risk management.

Finally, we look at developments in the so-called shadow banking system. We explain shadow banks' role in the financial system and their modus operandi, and we discuss the risks associated with this type of banking. We also discuss recent attempts to regulate the shadow banking system.

Program of the seminar: Financial Instruments and Markets

The seminar timetable follows Central European Time (CET).

09.00 - 09.15 Welcome and Introduction

09.15 - 12.00 Recent Developments in Global Financial Markets

  • Brief History of Market Developments
  • The Global Financial Crisis and the European Debt Crisis
  • Overview of Types of Financial Instruments and Markets
  • Regulatory and Political Developments
    • Basel III, Solvency II, MiFID II, EMIR, Banking Union etc.

Equity Markets and Instruments

  • Main Characteristics of Equity Instruments
  • World Equity Markets - from Crash to New Record Levels
  • The Role of Equity Instruments in Corporate Financing
  • How Equities are Traded
    • Primary and secondary markets
    • Case study: "High Frequency Trading" and its market impact
  • Mutual Funds and ETF's
  • Risk and Return Characteristics of Equity Investments
    • Historical performance
    • P/E, P/BV and other important ratios
    • Measuring equity risk in a portfolio context
  • Practical Case Studies and Exercises

12.00 - 13.00 Lunch

13.00 - 16.30 Fixed Income Markets and Instruments

  • Main Characteristics of Fixed Income Instruments
  • Overview of Global Fixed Income Markets
    • Treasury bills and government bonds
    • Corporate and High-Yield bonds
    • Agency securities
    • Convertibles, CoCo's and Linkers
  • How Fixed-Income Instruments Are Traded
    • Primary and secondary markets
  • Risk and Return Characteristics of Fixed-Income Instruments
    • Historical performance
    • Interest rate risk, inflation risk
    • Credit risk, sovereign risk, prepayment risk and liquidity risk
    • Measuring risks in a portfolio context
  • Case Studies and Exercises

09.00 - 09.15 Recap

09.15 - 12.00 Money, FX and Commodity Markets and Instruments

  • Global Money and FX Markets
  • Types of Instruments
    • Deposits, T-Bills, CP's, CD's
    • Spot, forward and forward-forward transactions
  • How the Crisis has Impacted the Money and FX markets
  • Special Focus: REPOs, Reverses and other SFT's
  • Commodity Markets and Commodity Price Volatility

Derivative Markets and Instruments

  • General Introduction to Derivatives and their Characteristics
  • Types of Derivates Instruments and Markets
  • Forwards vs. Options
  • Listed vs. OTC Markets
  • Futures and Options Markets
    • Mechanics of futures and options
    • Practical examples of equity, currency and bond futures and options
    • How futures and options are traded
    • Hedging equity, interest rate and FX risk with futures and options
    • Hedging commodity risk

12.00 - 13.00 Lunch

13.00 - 16.30 Derivative Markets and Instruments (continued)

  • OTC Markets
    • FRAs, swaps, caps, floors and swaptions
    • Credit derivatives
    • ISDA "Big Bang" protocol
    • EMIR The move to standardization and centralized clearing
    • Using OTC derivatives in risk management and financial engineering
  • Case Studies and Exercises

The Shadow Banking Market

  • What is Shadow Banking?
  • The Role of Shadow Banks in Financial Intermediation
  • The Modus Operandi of Shadow Banks
  • Risks and Regulatory Initiatives

Evaluation and Termination of the Seminar

Training catalogue in PDF
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