Details

The Future of Finance

A New Model for Banking and Investment
Wiley Finance, Band 576 1. Aufl.

von: Moorad Choudhry, Gino Landuyt
51,99 €
Verlag:	Wiley
Format:	EPUB
Veröffentl.:	16.09.2010
ISBN/EAN:	9780470906460
Sprache:	englisch
Anzahl Seiten:	224

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Beschreibungen

Titelbeschreibung

New banking and investment business models to navigate the post-financial crisis environment The financial crisis of 2007-2008 has discredited business models in the banking and fund management industries. In The Future of Finance, Moorad Choudhry and Gino Landuyt argue that banks must realign their business models, implying a lower return-on-equity; diversifying their funding sources; and increasing liquidity reserves. On the investment side, the authors discuss how diversification did not reduce risk, but rather amplified it, and failed to stabilize returns. The authors conclude that the clear lesson from the crisis is to know one's risk. A lesson that is best served by concentrating on assets and sectors that you understand. <ul> <li>Examines the weaknesses in the business models of many institutions, as well as the theoretical foundation for professionals in the field of finance</li> <li>Identifies the shortcomings of Modern Portfolio Theory</li> <li>Addresses how investment managers can find new strategies for creating "alpha" and why they need to re-vamp their fee structures</li> </ul> Filled with in-depth insights and practical advice, The Future of Finance will provide bankers and investment managers with a guide to realigning their businesses in order to prosper in the post-crisis financial markets.

Inhaltsverzeichnis

Foreword xi Preface xiii Introduction xix Market Instability xx Derivatives and Mathematical Modeling xxi Senior Management and Staying in the Game xxiii Macroprudential Financial Regulation and Cycle-Proof Regulation xxiii The Way Forward xxv Conclusion xxvi Part One A Review of the Financial Crash 1 Chapter 1 Globalization, Emerging Markets, and the Savings Glut 3 Globalization 3 A Series of Emerging-Market Crises 5 Low-Yield Environment Due to New Players in the Financial Markets 8 Artificially Low Exchange Rates 15 Recommendations and Solutions for Global Imbalances 16 Chapter 2 The Rise of Derivatives and Systemic Risk 22 Systemic Risk 23 Derivative Market Systemic Risk: Solutions for Improvement 30 Chapter 3 The Too-Big-to-Fail Bank, Moral Hazard, and Macroprudential Regulation 37 Banks and Moral Hazard 37 Addressing Too-Big-to-Fail: Mitigating Moral Hazard Risk 42 Macroprudential Regulation: Regulating Bank Systemic Risk 53 Conclusion 58 Chapter 4 Corporate Governance and Remuneration in the Banking Industry 60 Bonuses and a Moral Dilemma 60 A Distorted Remuneration Model 61 Unsuitable Personal Behavior 64 Conclusion 65 Chapter 5 Bank Capital Safeguards: Additional Capital Buffers and Reverse Convertibles 67 Capital Issues in a Bear Market 67 Looking for New Capital Instruments 69 Chapter 6 Economic Theories under Attack 76 A Belief in Free and Self-Adjusting Markets 76 Modigliani and Miller 85 Markowitz and Diversification Tested 85 Minsky Once Again 88 Lessons to Be Learned by Central Banks 89 Conclusion 92 Part Two New Models for Banking and Investment 93 Chapter 7 Long-Term Sustainable Investment Guidelines 95 The Investment Landscape after the Crisis 95 Government Debt and Demographics 97 A New Economic Environment 103 The Inflation Dragon 105 Currencies and a Changing Geopolitical Landscape 115 Exchange-Traded Funds: A Flexible Asset Class 118 Conclusion 121 Chapter 8 Bank Asset-Liability and Liquidity Risk Management 123 Basic Concepts of Bank Asset-Liability Management 123 Asset and Liability Management: The ALCO 134 ALCO Reporting 137 Principles of Banking Liquidity Risk Management 142 Measuring Bank Liquidity Risk: Key Metrics 145 Internal Funding Rate Policy 151 Conclusion 157 Chapter 9 A Sustainable Bank Business Model: Capital, Liquidity, and Leverage 158 The New Bank Business Model 158 Corporate Governance 167 Liquidity Risk Management 168 The Liquid Asset Buffer 175 Conclusion 177 Notes 179 References 187 About the Authors 189 Index 191

Autorenportrait

MOORAD CHOUDHRY has over twenty-one years experience in investment banking and was latterly head of treasury at Europe Arab Bank. He was previously head of treasury at KBC Financial Products and vice president in structured finance services at JPMorgan Chase Bank. Dr. Choudhry is Visiting Professor at the Department of Economics, London Metropolitan University, and Senior Research Fellow at the ICMA Centre, University of Reading. He is a Fellow of the ifs-School of Finance and a Fellow of the Chartered Institute for Securities and Investment. He is on the Editorial Board of the Journal of Structured Finance and the Editorial Advisory Board of American Securitization.GINO LANDUYTis Head of Sales at Conduit Capital in London. Prior to that, he was head of institutional structured sales at ING Bank in Brussels, and worked with KBC Bank N.V. in their Brussels, Frankfurt, New York, and London offices. Landuyt has an MA in applied economic sciences from the State University of Antwerp and an MBA from the Catholic University of Antwerp.

Back cover copy

Financial markets have always promised, and often delivered, prosperity. But, during the last decade, the structure and behavior of financial markets themselves helped create the conditions for an economic implosion that resulted in a banking crisis, recession, and wholesale loss of investor confidence.While recent events have renewed calls on the need for a paradigm shift in both the investment and banking model, another clear lesson from the crisis is to “know one’s risk,” and that is best served by appreciating fully the nature of the markets in which finance operates. The Future of Finance looks beyond the headlines and media hype to present a full and accessible analysis of the factors leading to the crash of 2007 and the banking crisis of 2008, as well as the interaction between these factors. In Part II of the book, the authors present practical recommendations for a revised approach to banking and principles of investment, which if followed will help to produce a more sustainable level of economic prosperity.While every possible option is impossible to discuss, the measures described throughout these pages should form part of a logical, unbiased review of strategy by both banks and investors.