Download Lecture # 45 Recap

Lecture # 45
Recap
1) Financial Environment &
Financial Institutions
1. Role of Financial Institutions
2. Long Run Performance of
Financial Institutions for Economic
Growth
3. Capital Market
4. Stock markets
5. Bond markets
6. Commodity markets
7. Money markets
8. Derivatives markets
9. Futures markets
10.Borrowers of Financial Markets
11.Lenders Of Financial Market
2) Financial Institutions
1.Types of Financial Institutions
2.Central Bank
3.Commercial Banks
4.Investment Bank
5.Saving Bank
6.Micro Finance Bank
7. Financial Institution & THEIR
FUNCTIONS
8. Islamic Bank
9. Agriculture Bank
10.SME Banks
11.Non-Banking Financial Institutions
12.Investment Companies
13.Brokerage Houses
14.Leasing Companies
15.Insurance Companies
16.Mutual Fund
3) Central Bank
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Activities & Responsibilities
Monetary Policy
Central or National “Bankers Bank”
Interest Rate Intervention
Limits of Enforcement Power
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Policy Instruments
Interest rate Intervention
Limits of Enforcement Power
Interest Rates
Open Market Operations
Repo Market known as repurchase
operations
• Direct Operations
• Buying or selling securities ("Direct
Operations")
• Foreign exchange operations such
as forex swaps.
• Capital Requirements
• Reserve requirements
• Exchange Requirements
5) Economic Factors
Balance of Trade
Balance of Payments
Factors that can affect BOT
1. Exchange rates
2. Trade agreements or barriers
3. Other tax, tariff and trade measures
4. Business cycle at home or abroad.
– Current Account Surplus & Deficit
– Capital or Financial Account Surplus & Deficit
– Balance of Payments Equilibrium
– Challenges of a Central Bank
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Economic Growth
Poverty Reduction
Inflation
Stability in Forex Rate
5) State Bank of Pakistan
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History
Functions
Primary Function
Secondary Function
Non-Promotional Function
Regulation of Liquidity
Banking Assets & Liabilities
6 to 11) Various Departments of
State Bank of Pakistan
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Agricultural Credit
Audit
Banking Inspection
Banking Policy
Banking Supervision
Corporate Services
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Economic Policy
Exchange and Debt Management
Exchange Policy
Human Resource
Information System
Islamic Banking
• Legal Services Department
• Research Department
• Small and Medium Enterprises
11 & 12) Macro Economic
Performance of a Country
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National Income
Concepts of National Income
Difference b/w GDP & GNP
Regulating risk and the importance of
risk management
• Basel 2 Type Rules for Insurers
• GLOBAL FINANCIAL SYSTEM
• INTERNATIONAL FINANCIAL
INSTITUTIONS
• International Monetary Fund
• The World Bank
• World Trade Organization
• Role of WTO in Pakistan Trade
Environment
• Asian Development Bank
• ADB Projects in Pakistan
• Paris Club
13) Pakistan Economic
Aid & Debt
• The major causes of poverty in Pakistan
• Key challenges facing the Government of
Pakistan
• Future Prospects for Pakistan's Economy
• Macroeconomic Stability
• Strengthening Institutions
14) Increasing Foreign Direct
Investment
• Foreign Interest in Local Financial
Markets
• Enhancing and Sustaining a
Growing GDP
• How can Pakistan improve and
sustain its growth rate?
• Industrial Sector
• Inter-provincial harmony in
Pakistan
• Achieving a Favorable Balance of
Trade
• Managing the Debt
• Economic Resilience
15 to 19) Role of Commercial
Banks
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Purpose of a bank
Commercial Lending
Banking Services
A Bank’s Profit
Services Typically Offered by Banks
Types of banks
Banks in the Economy
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Role in the money supply
Size of Global Banking Industry
Bank Crisis
Challenges within the Banking
Industry
• Economic Environment
• Growth Strategies
• The Management of the Banks
– Public perceptions of banks
• Profitability
– SWIFT Society for Worldwide Interbank
Financial Transactions
– COMMERCIAL BANKING IN PAKISTAN
CAMEL
1) Capital Adequacy,
2) Asset Quality,
3) Management Soundness,
4) Earnings and Profitability,
5) Liquidity and Sensitivity to Market Risk.
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Deposit Mobilization
Credit extension
Banking spreads
Asset composition
Problem bank management
BANKING SECTOR
REFORMS in Pakistan
1. Privatization of Nationalized Commercial
Banks
2. Corporate governance.
3. Capital Strengthening.
4. Improving Asset quality.
5. Liberalization of foreign exchange regime
6. Consumer Financing
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Mortgage Financing
Legal Reforms
Prudential Regulations
Micro financing
SME Financing
Taxation
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Agriculture Credit
E-Banking
Human Resources
Credit Rating
Supervision and Regulatory
Capacity
• Payment Systems
20) Branch Banking in Pakistan
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Remittances
Demand Draft
Telegraphic Transfer
Mail Transfer
Online Fund Transfer
Types of Account
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Individual
Joint Account
Sole Proprietorship
Club & Societies
Joint Stock Companies
Agents
Operations & Status of Accounts
Nature of Accounts
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Current Account
Profit & Loss Sharing
Current foreign currency
Saving Foreign Currency
Term Deposits
BBA “Basic Banking Account”
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Types of Loan
Personal finance
Mortgage Finance
Business Finance
21) Role of Commercial Banks in
Micro Finance Sector
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Micro credit
Micro insurance
Micro finance sector in Pakistan
Micro finance banks in Pakistan
22 to 26 ) Mutual Funds
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What is mutual funds
Turnovers
Expenses
Management Fees
Non-management Expenses
Service Fees
Fees and Expenses Borne by the Investor
(not the Fund)
• Brokerage Commissions
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Types of mutual funds
Open-end fund
Exchange-traded funds
Equity funds
Capitalization
Growth vs. value
Index funds versus active management
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Bond funds
Money market funds
Funds of funds
Hedge funds
Mutual funds vs. other investments
Share classes
Load and expenses
Criticism of managed mutual funds
28) Investment Banking
• Organizational structure of an investment bank
• The main activities and units of Investment
Banks
• Size of industry
• Recent evolution of the business
• New products
• Possible conflicts of interest
• Types of Investment banks
29 & 30) Letter of Credit &
International Trade
• Terminology
• How it works
• Legal principles governing documentary
credits
• The price of LCs
• Legal Basis for Letters of Credit
• Risks in International Trade
31 & 32) Foreign Exchange &
Role of Financial Institutions
• Market size and liquidity
• Market participants
– Banks
– Commercial companies
– Central banks
– Investment management firms
– Hedge funds
– Retail forex brokers
• Trading characteristics
• Factors affecting currency trading
– Economic factors
– Political conditions
– Market psychology
• Algorithmic trading in forex
• Financial instruments
– Spot
– Forward
– Future
– Swap
– Option
– Exchange Traded Fund
• Speculation
33 & 34) Leasing Companies
• Conceptual background
– Leasing of real property
– Leasing of tangible personal property
• Real leases
– Private property rental
– Commercial leasehold
• Advantages of commercial leasing
• Disadvantages of commercial leasing
• The Leasing Sector in Pakistan and its Role in
Capital Investment
35 & 36) Insurance Companies
• Principles of insurance
• Indemnification
• When is a policy really insurance?
– Does the contract contain adequate risk
transfer?
– Is there a brightline test?
– "Safe harbor" exemptions
– Risk limiting features
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Insurer’s business model
Gambling analogy
History of insurance
Types of insurance
Types of insurance companies
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Life insurance and saving
Size of global insurance industry
Financial viability of insurance companies
Controversies
– Insurance insulates too much
– Closed community self-insurance
– Complexity of insurance policy contracts
– Redlining
– Health insurance
– Dental insurance
– Insurance patents
– The insurance industry and rent seeking
• Criticism of insurance companies
• 37) Role of Financial Institutions in
Agriculture Sector
• 39) SME sector & Financial Institutions
• SME Policy in Pakistan
• Government of Pakistan & its Role
40) Financial Crimes
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Money Laundering
Modern development
Process
Irregular funding
Captive business
Legal considerations
– Fighting money laundering
– Using information technology
– September 11, 2001 and the international
response to the underground economy
• 41) Financial Institutions & Risk
Management
• 42) Banking Crimes
• 43) Collapse of Enron
• 44) Misleading in Baring Bank, Black
Wednesday, Soloman Brothers and
Treasury Fraud.