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Kong Chen, Engineer - Public Utilities Board, Singapore

This course gave me systematic knowledge which is very helpful for my profession.

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Foreign Exchange and Money Markets @ KL

Event 

Foreign Exchange and Money Markets @ KL
Title:
Foreign Exchange and Money Markets @ KL
When:
08 December 2015 - 10 December 2015
Where:
Pullman Hotel Bangsar Kuala Lumpur -
Categories:
In House Training , Finance , Corporate Training
        

Description

Your #1 Forex Guru, Master of Investments and Author!


Clive Corcoran

Investment advisor, respected foreign exchange trader, acknowledged communicator in capital markets, featured speaker at trading expos and seminars and guest analyst on CNBC's European Closing Bell. With Clive Corcoran, these superlatives are not justice enough for his impeccable stature in the finance and investment management sectors on both sides of the Atlantic.

His 25 years of industry experience, mainly as a co-founder and CEO of an investment firm providing wealth management and strategic financial advisory services to a variety of international clients, has resulted in him publishing many content-rich books, the most notable and latest being "Systemic Liquidity Risk and Bipolar Markets" which is a huge hit on Amazon.

Besides being a key columnist on multiple print and online publications, he is also blessed with the gift of performing financial miracles and imparting specific insights to institutions such as a central bank in the Eurozone, the largest bank in Russia, a sovereign wealth fund in the Gulf and China's biggest asset management company.

Currently, Clive is in such high demand because he is particularly keen on training and knowledge transfer to those employed within the financial sectors of the developing world and emerging markets.

Tutor's Recent Publications

  

Testimonials

"Plenty of great course material compared to other courses I have attended.”
 Client Relationship Manager at London-based Investment Bank

"Great training and Clive offers very clear explanations and current materials.”
 Senior Dutch Banker

“As a result of Mr Corcoran's course, I have a much better vision of financial markets.”
 Investment Banker from Saudi Arabia

“The trainer demonstrated his professional credibility regarding the subject matter.”
 Australian Pension Fund Manager

“Excellent presentation! Clive is very passionate and presents complex ideas in a very intuitive manner.”
 Quantitative Strategist at European Hedge Fund

Attend this course and you will learn how to:

Adopt best practices regarding the management of both exchange and interest rates

Discover the link between changing monetary policy and money market conditions in high income countries and the decline in capital flows to emerging markets (EM)

Relate longer term consequences of unorthodox policies such as QE and zero interest rate (ZIRP) for global economic growth

Understand if subdued growth and very low inflation (or even deflation) is the new market norm

Figure out if the decreased appetite for EM securities due to the current monetary policy transitions will affect the local economy and your institution

Craft a longer term outlook for developing markets in terms of equity, bonds and currencies with legislation such as Dodd Frank Act and Basel III playing a vital role

Navigate around the implications of increased US dollar liquidity and the "shortage" of dollars arising from weaker energy and commodity prices

Examine the attractions of short term investment and trading strategies

Apply greater discipline to funding and diversify sources of liquidity

Protect your firm from future financial crises by focusing on current market developments

Program Agenda

Day 1

Section 1: Interface of Money Markets and Foreign Exchange

• Size of the money markets - FX daily volumes
• Overview of the Euromarkets
• LIBOR rates - currencies and maturities
• Calculating yields with treasury bills
• The mechanics of the Repo market
• Eurodollar futures market
• Effective yields when risk is adjusted for FX exposures
• Current market conditions - policy rates, macro-economic background
• Arbitrage and interest rate parity
• Forward rates for interest hike and FX

Section 2: Central Bank's Role in the Financial System

• Overview of Federal Reserve, European Central Bank, People's Bank of China, Bank of Japan
• Structure of central bank balance sheet and difference in commercial bank's
• Characteristics of central bank's assets and liabilities
• Lender of last resort - moral hazard issues
• Open Market Operations
• Unorthodox monetary policy including QE - origins, recent history, mechanics
• Independence of central banks
• Financial stability and macro-prudential policy
• Management of FX reserves and exchange rate policy
• Nature of payments systems - RTGS, net settlement, Fedwire, Target2

CASE STUDY - Examination of the implications of monetary policy normalization by the US central  bank on capital flows to Asia and Middle East

Section 3: Monetary Policy and Money Supply

• Overview of FOMC, MPC of BOE, ECB Governing Council and PBOC governance
• Monetary tools and how they impact money supply
• How is money created in a modern economy - role of commercial banks
• Inflation targeting - review of Phillips Curve hypothesis
• Central bank reserves - influence on policy rates
• Explanation of the Taylor rule - discretionary policy versus rule based
• Term structure of interest rates - yield curve forecasting

CASE STUDY - Examination of the Assets and Liabilities of the US Central Bank in contrast to an Asian Central Bank

Section 4: Asset/Liability Management and the Treasury Function

• Interest rate risks - impact on Net Internet Income and gap analysis
• Market risk i.e. re-valuation of bank holdings from changes in interest rates
• Duration gap analysis - simple modelling tool with Excel to show balance sheet impact
• Interest rate forecasting - futures derived, inflation expectations from market data
• Review of inflation protected securities - TIPS, ILG's
• Estimating the Term Liquidity Premium in money markets
• Funds Transfer Pricing (FTP) mechanics
• Contingency buffers for liquidity risk management
• Funding Value Adjustment (FVA) and the importance of it
• Bank funding curves
• Applying the correct FTP charges for strategic balance sheet management

CASE STUDY - Impact of an increase in yields for AFS securities on AOCI and Tier 1 capital. Discussion with delegates regarding local issues concerning mark to market accounting

Section 5: Money Market Securities

• Treasury bills
• Commercial paper - characteristics, CP ratings
• Spreads in rates - Treasury bills versus Libor rates
• Repurchase agreements - importance for liquidity provisioning
• Banker acceptances - facilitation of trade finance, letters of credit
• Certificates of deposits - negotiable variety
• Money market mutual funds - mechanics
• Eurodollar deposits, notes and euro CP

CASE STUDY - Spreads between instruments e.g. the TED spread, LIBOR-OIS spread, Hong Kong Interbank Offered Rate (HIBOR) and Singapore Interbank Offered Rate (SIBOR)

Day 2

Section 6: Open Market Operations and Quantitative Easing

• Contrast OMO (short term repos) and QE
• ECB's use of LTRO's
• Explanation of decisions regarding policy rates and targeting rates via OMO
• Examination of impact of Central Bank's asset purchases on yield curve and short term rates
• Impact of QE on Central Bank balance sheets
• How the Federal Reserve implements OMO
• Overnight market

CASE STUDY - The federal funds rate and how it is determined, expectations and the Fed funds future market

Section 7: Foreign Exchange Market Characteristics

• Size of market, volumes, major currency pairs
• Regional breakdown of FX trading hotspots
• Key role of London market in FX trading
• Historical background to FX market - gold convertibility
• Role of International Monetary Fund and Special Drawing Rights
• Global FX reserves - composition, recent trends
• Review of key FX rates - Euro/USD, USD/Japan Yen, USD/China Renminbi
• Price of gold and relationship to USD index

CASE STUDY - The internationalization of the renminbi and overview of the Chinese money markets

Section 8: FX Forwards and Managing Exchange Rate Risk

• Rationale and motivations for using FX forwards
• Forward Rate Agreements
• Corporate treasurers can use FX forwards to manage risk
• How forward rates are determined - interest rate differentials
• Tracker Forwards, Forward Extras - pricing and cost/benefit analysis
• Structured FX products - how structuring and pricing works
• Target Redemption Forwards - mechanics and client benefits
• Non deliverable forwards

CASE STUDY - Use of an FX Forward Tracker by an Asian or Middle Eastern corporate treasurer to manage exchange rate risk between domestic currency and the Euro

Section 9: FX Options and Exotic Options

• Pricing of FX Options - Black Scholes method, Binomial tree methods
• FX Options strategies
• Sensitivities of FX Options to changes in spot market variables
• Volatility smile phenomenon in FX market - explanation of skew
• Binary options - mechanics, pay-outs
• Barrier options, Bermuda options, Asian FX options, Quanto options
• Drivers of FX volatility - tail risk, spill over from other markets
• FX clustering

CASE STUDY - Explanantion of covered FX option writing versus naked positioning

Section 10: FX Carry Trade and Emerging Market Currencies

• Explanation of the carry trade - motivations and risks
• Review of Central Bank policy rates for developing and emerging markets
• Spreads and volatility of FX carry trade pairs - liquidity issues
• Major carry trade pairs - role of funding currencies
• Minor and exotic currencies - identification of pairs and trading characteristics
• Impact on emerging market currencies of monetary policy normalization in rich countries
• Taper tantrum in 2013/14 and more declines in EM currencies
• Relationship between EM, FX and EM corporate debt markets
• Exposures of emerging markets' central banks and corporates to US dollar liabilities
• Capital control issues and CB interventions in EM currency market
• Currency wars - impact of yuan devaluation on Asian exchange rates
• Trade weighted exchange rates

CASE STUDY - The Asian currency crisis of 1997, Thai baht devaluation leading to FX crisis in Southeast Asia and parallels with currency woes in Malaysia, Indonesia, Korea and Thailand in 2015

Day 3

Section 11: Foreign Exchange and Money Market Swaps

• Principles in development of swaps
• BIS statistics on swaps outstanding
• Hedging interest rate risk
• Master Agreements & Protocols
• Interest rate swaps
• Fixed/floating interest rate swaps
• Currency swaps - commercial terms, marking to market
• Forex swaps

CASE STUDY - Excel modelling tool for Credit Default swaps, how they work and how they are quoted

Section 12: Fundamentals of Financial Risk Management

• Distinguish risk and uncertainty
• Summarize the principal types of financial risk
• Review fundamental statistical tools for measuring and analysing risk
• Increasing recognition that market risk, credit risk and liquidity risk are all interdependent
• Risk/reward concepts from Capital Asset Pricing Model (CAPM)
• Hedging strategies - use of swaps and other derivatives to manage risk
• Systemic risk - outline of key features of the global liquidity crisis of H2, 2008
• Overview of dynamic hedging topics - delta hedging, gamma risk, options strategies
• Corporate governance issues - conflicts of interest

Section 13: Liquidity, Basel III and Solvency

• Price to book ratios for the banking sector
• Why Basel III has created a brand new risk reporting obligation
• Criteria for allocation to Level 1 and Levels 2A and 2B of High Quality Liquid Assets (HQLA)
• Deposit insurance schemes
• Loss absorbency capital and bail in instruments
• Short term funding requirements versus longer term stable funding (NSFR)
• Novel capital instruments - contingent capital - bail-ins versus bail-outs

CASE STUDY - Illustration of the distinction between a liquidity problem and a solvency problem on the balance sheet of a commercial bank

Section 14: Credit Risk and Operational Risk

• The key macro and micro financial concepts and drivers of credit risk
• Assessing default probability of loan portfolios
• Key determinants for managing credit risk
• Market-based approaches, bond spreads, swap rates
• Credit scoring, credit risk modelling, risk profiling and assessing credit worthiness
• Basel compliance standards
• Classification, identification, and mitigation of different kinds of operational risks
• Loss distribution analysis - data collection, modelling tools

CASE STUDY - Examination of the operational losses that could be expected in an Asian retail bank

Section 15: The Global Regulatory Framework

• Overview of the Basel III framework
• Key provisions of Basel III related to market risk, credit risk, liquidity risk and operational risk
• The key macro and micro financial concepts and drivers of credit risk
• Contrast macro-prudential policy initiatives with traditional micro-prudential
• Dodd Frank Act and FSOC, Volcker rule
• Ongoing investigations by regulators into market abuse - money laundering etc
• Sarbanes-Oxley - risk disclosure, stringent accounting requirements, impact on IT policies

CASE STUDY - The regulatory push away from OTC towards CCP's and exchange trading and settlement of derivatives

Who should attend:

• Chief Financial Officers
• Investment Managers
• Hedge Fund Managers
• Private Bankers
• Private Wealth Managers
• Chief Investment Officers
• Forex Traders
• Head of Treasury
• Asset Managers
• Investment Bankers
• Forex Analysts
• Forex Managers
• Equity Managers
• Bank Governors
• Client Relationship Officers
• Finance Directors
• Financial Planners

Some of the clients Clive has worked with:

Central Bank in Eurozone
G-SIB European Bank
Largest Bank in Russia
G-SIB China Bank
Central Bank in North Africa
Sovereign Wealth Fund in the Middle East
Largest Asset Management Company in China
Bank in East Africa
Central Bank in South America
Bank in Saudi Arabia
European Investment Bank

Bonus Offer!

Every delegate will receive 10 Continuing Professional Education (CPE) credits by attending this course!

*******For more details, kindly download the brochure*******

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Save up to 50% from in-house courses!

You may wish to consider having an in-house course delivered locally on-site if you have a number of participants with similar training needs. This course can be customised to fit specific requirements. For more information about IHT kindly send your enquiries to This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Venue

Venue:
Pullman Hotel Bangsar Kuala Lumpur