Tag Archives: Derivatives

Trends in Risk and Margin

Any activity is associated with risk – a loss or gain. Financial risk management is not about avoiding risk. Rather, it is about understanding and communicating risk, so that risk can be taken more confidently and in a better way. (David Koenig,...

Fundamentals and basic instincts drive FX Markets

Bank for International Settlements, Basel, Switzerland conducts triennial central bank survey on foreign exchange and derivatives market activity. The last such survey was conducted in April 2010. As per the findings of this survey, Global Foreign...

Investment banking and revenue pressures – ways to go

Setting: One of the purposes of any business is to make money. And banking is no exception to this cardinal objective of any business. Normally the bank’s income portfolio comprises fund based income and fee based income. Fund based income...

Risks associated with investments

In any investment, an investor is exposed to several kinds of risks. The risks associated with investments are liquidity risk, market risk, credit risk, operational risk, prepayment risk and extension risk. If the investor decides to go in for...

Role of central counterparties and processing of OTC derivatives

This post makes an attempt to cover the role of central counter-parties and processing of OTC derivatives in four parts as under: Part I – All about Central Counterparties Part II – Best practices framework for CCPs Part III – Some loud...

Security Lending Business

Concept of Security lending Security is an asset or third party commitment accepted by the security taker to secure an obligation of the security provider. In theory, cash is the perfect security. The assets traditionally used as security, such...

Stress testing on banks

Stress testing is the topic of the day. This blog makes an attempt to demystify the topic stress testing. A banking organization holds capital to guard against uncertainty. Capital reassures an institution’s depositors, creditors and counterparties‐‐and...

What does the future hold for investment banking?

Basel Committee of Bank for International Settlements in its document on “Strengthening the resilience of the banking sector” has identified the buildup of excessive on and off balance sheet leverage in the banking system as one of the underlying...

Differentiators in FX Business

The foreign exchange market is the largest and most liquid sector of the global financial system. Bank for International Settlements’ Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity 2004, estimated foreign...

An Overview of Structured Finance

What is structured finance? Structured Finance enables efficient refinancing and hedging profitable economic activity beyond the scope of conventional form of on-balance sheet securities with a view to reduce cost of capital and to mitigate...