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Investment Banking: Industry Overview and Careers in Investment Banking
 
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Investment banks are notorious for their highly competitive working environment and long working hours for junior employees. Nevertheless, they continue to be seen as one of the prime destinations for talented Business and Finance graduates, given the excitement of working on large deals and the high pay scale that comes with this job. Investment banking operations tend to be more sophisticated than traditional “deposit taking, credit giving” retail banking services. Investment banks work closely with corporate clients, pension funds, financial sponsors and governments to structure and execute some of the largest transactions that we see in the news. On Facebook: https://www.facebook.com/365careers/ On the web: http://www.365careers.com/ On Twitter: https://twitter.com/365careers Subscribe to our channel: https://www.youtube.com/365careers
Views: 87115 365 Careers
19. Investment Banks
 
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Financial Markets (2011) (ECON 252) Professor Shiller characterizes investment banking by contrasting it to consulting, commercial banking, and securities trading. Then, in order to see the essence of investment banking, he reviews some of the principles that John Whitehead, the former chairman of Goldman Sachs, has formulated. These principles are the basis for a discussion of the substantial power that investment bankers have, and their role in society. Government regulation of these powerful investment banks has been a thorny issue for many years, and especially so now since they played a significant role in world financial crisis of the 2000s. 00:00 - Chapter 1. Key Elements of Investment Banking 09:50 - Chapter 2. Principles and Culture of Investment Banking 16:54 - Chapter 3. Regulation of Investment Banking 27:21 - Chapter 4. Shadow Banking and the Repo Market 33:04 - Chapter 5. Founger: From ECON 252 to Wall Street 46:24 - Chapter 6. Fougner: Steps to Take Today to Work on Wall Street 53:49 - Chapter 7. Fougner: From Wall Street to Silicon Valley, Experiences at Facebook 57:56 - Chapter 8. Fougner: Question and Answer Session Complete course materials are available at the Yale Online website: online.yale.edu This course was recorded in Spring 2011.
Views: 303146 YaleCourses
Investment Banking Areas Explained: Capital Markets
 
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Capital markets are one of the most fascinating areas of investment banking. Companies need these services when they are about to go public or want to issue debt sold to the public. When a company wants to raise equity, we talk about ECM, standing for Equity Capital Markets, and when it wants to raise debt, we talk about DCM, standing for Debt Capital Markets. On Facebook: https://www.facebook.com/365careers/ On the web: http://www.365careers.com/ On Twitter: https://twitter.com/365careers Subscribe to our channel: https://www.youtube.com/365careers
Views: 96216 365 Careers
Dividend Discount Model - Commercial Bank Valuation (FIG)
 
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Why the Dividend Discount Model (DDM) is used to value commercial banks instead of the traditional Discounted Cash Flow (DCF) analysis. By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" There are 3 main reasons why the DCF and the concept of Free Cash Flow (FCF) do not apply to commercial banks: 1. You can't separate operating vs. investing vs. financing activities - the lines are very blurry for a bank, since items like debt are more operationally-related and fund the bank's lending activities. 2. CapEx doesn't represent re-investment in the business, as it does for a normal company - for a bank,"re-investment" means hiring people, doing more lending, etc. 3. Working Capital represents something much different for a bank - the standard definition of Current Assets Excl. Cash Minus Current Liabilities Excl. Debt makes no sense, because for banks that includes tons of investments, securities, other borrowings, etc. so you could see massive swings... What You Do Instead - Use Dividends as a Proxy for Free Cash Flow Why? Because banks are CONSTRAINED by capital requirements - according to the Basel accords (I, II, III), they must maintain a certain "buffer" at all times to cover unexpected losses on their loans... So just like CapEx requirements, Net Income growth, and Working Capital constrain FCF for normal companies, the Tier 1 Capital / Tangible Common Equity / Total Capital requirements constrain dividends for banks. So we'll project a bank's regulatory capital, its asset growth, and its net income, and use those to project its dividends - then, discount, and sum up the dividends and discount and add the NPV of its terminal value. How to Set Up a Dividend Discount Model (DDM) 1. Make assumptions for Total Assets, Asset Growth, targeted Tier 1 (or other) Ratios, Risk-Weighted Assets, Return on Assets (ROA) or Return on Equity (ROE), and Cost of Equity. 2. Next, project Assets and Risk-Weighted Assets. 3. Then, project Net Income based on ROA or ROE. 4. Then, project Shareholders' Equity (AKA Tier 1 Capital) based on targeted capital ratio... 5. And BACK INTO dividends! Different from a normal company's DDM! Set dividends such that the minimum capital ratio is maintained, based on starting Shareholders' Equity and Net Income that year. 6. Flesh out the rest of the model - stats, growth rates, other metrics. 7. Discount and sum up dividends. 8. Calculate, discount, and add Terminal Value so that NPV = NPV of Terminal Value + NPV of All Dividends. 9. Calculate the Implied Share Price and compare to actual Share Price. Is the bank undervalued? Overvalued? What are the clues so far? What Next? Try it with a real company, using its historical financial information. Add more complex / realistic assumptions, based on industry research, channel checks, the bank's own strengths/weaknesses, etc. Add more advanced features - other ways to calculate Terminal Value, more accurate regulatory capital, mid-year discount and/or stub periods, stock issuances / repurchases, multiple growth stages, and so on.
Money and Banking - Lecture 01
 
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Money. Banking. Finance. Financial System. Financial Markets. Financial Institutions. Financial Instruments. Monetary Theory. Monetary Policy. Inflation.Commercial Banks. Investment Banks. Central Banks. Macroeconomy. Interest Rates. Booms. Bubbles. Financial Crisis. Real Estate Bubbles. Currency Substitution; Dollarization. Risk. Textbook: "The Mystery of Banking" by Murray N. Rothbard.
Views: 29949 Krassimir Petrov
Banking 1 | Money, banking and central banks  | Finance & Capital Markets | Khan Academy
 
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Introduction to how banks make money and the value they (potentially) add to society. Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/money-and-banking/banking-and-money/v/banking-2-a-bank-s-income-statement?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: We all use money and most of us use banks. Despite this, the actual working of the banking system is a bit of a mystery to most (especially fractional reserve banking). This older tutorial (bad handwriting and resolution) starts from a basic society looking to do more than barter and incrementally builds to a modern society with fraction reserve banking. Through this process, you will hopefully gain a deep understanding of how money and banking works in our modern world. About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content. For free. For everyone. Forever. #YouCanLearnAnything Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1 Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy
Views: 831413 Khan Academy
How FinTech is Shaping the Future of Banking | Henri Arslanian | TEDxWanChai
 
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While FinTech is revolutionizing the banking industry and giving millions of people access to financial services for the first time, new banking models are emerging with FinTech start-ups and tech firms potentially disrupting the status quo. But business schools and universities are not preparing future bankers for these changes, says FinTech thought leader Henri Arslanian. How can designers, programmers and creative thinkers help? Henri Arslanian started his career as a financial markets and funds lawyer in Canada and Hong Kong, after which he spent many years with UBS Investment Bank in Hong Kong. In recent years, he has been teaching graduate courses on Entrepreneurship in Finance at Hong Kong University as an Adjunct Associate Professor, and currently leads the first FinTech course in Asia. His latest book on Entrepreneurship in Finance will be published in late 2016 by Palgrave Macmillan. A member of the Milken Institute’s Young Leaders Circle, Henri is a regular keynote speaker globally on the topic of FinTech and hedge funds and currently sits on a number of finance, academic, civil society and FinTech related boards and advisory boards. Henri is fluent in English, French, Armenian, Spanish and conversational in Mandarin Chinese and has been awarded many academic and industry awards over the years, including the Governor General of Canada Gold Medal for Academic Excellence. This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at http://ted.com/tedx
Views: 256000 TEDx Talks
6.1 Investing - Financial Institutions and Markets
 
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We all participate in this financial system one way or another. If we have savings in a bank our money is active in the financial system. If we borrow money to buy a house, car, or through credit cards, we're making use of this system. This segment examines financial intermediaries and markets.
Financial Institutions, Lecture 01
 
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This is the first lecture in a course on Financial Institutions at Prince Sultan University in front of an MBA class in 2009. The first lecture discusses the basics of commercial banking. Commercial Banking, Sources of Funds, Uses of funds, Transaction Deposits, Demand Deposits, Time Deposits, Checking Account, NOW Account, Interest-Bearing Account, Savings Deposit, Passbook Savings, Reg Q, ATS Account, Retail CD, Negotiable CD, Exotic CD, MMDA, Fed Funds, Doscount Loans, Discount Window, Discount Rate, REPOs, Eurodollars, Bank Capital, Capital ratio, Capital Adequacy, Basel II, Regulatory Arbitrage, WACC,
Views: 40525 Krassimir Petrov
What do investment banks do? - Quarterly Bulletin article
 
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Investment banks help large companies and other institutions to issue bonds and shares and trade various financial instruments. But their size and complexity can pose risks to the stability of the financial system. http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2015/q1prerelease_2.pdf
Views: 12581 Bank of England
Investment banking and structured finance
 
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Investment Banking and Structured Finance II Prof. Stefano Gatti The course focuses on the business of structured finance from the financial intermediaries' standpoint. Request your welcome kit at http://www.unibocconi.eu/welcomekit
Views: 68420 UniBocconi
Regulatory Onboarding for Investment Banks / Capital Markets
 
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James Monaghan, Head of Pre-Sales for Fenergo, explains what Regulatory Onboarding means for investment banks and capital market firms and describes how Fenergo’s Regulatory Onboarding solution works and how it can help financial institutions to reap four core benefits.
Views: 2930 Fenergo
Investment Banking Institutions
 
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CFA Level I Training Videos: Video talks about financial institutions functioning in capital markets. These organizations are future employers for cfa candidates. Various Buy side i.e. investment management and Sell side i.e. investment banking institutions are mentioned. Mutual funds and hedge funds are talked about in some detail. More videos at www.profitshastra.com
The Future of Banking And Finance Careers
 
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http://bit.ly/obTzlr Simon Dixon presents on the future of banking and finance careers in the entrepreneurial unemployment economy ahead. Simon shares the different types of banks and financial institutions, what they do and the 7 major trends that will effect your career decisions over the next 5 years. Simon Dixon is the founder of Bank Talk Show and author of 'Student To CEO: 97 Ways To Influence Your Way To The Top In Banking & Finance' after a career in stock brooking, market making and investment banking. Prepare your banking and finance career now recorded live from University of Liverpool. http://bit.ly/obTzlr
Views: 150626 StudentFinanceJobs
Careers in Debt Capital Markets (DCM) @ BNP Paribas CIB
 
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Careers in Debt Capital Markets (DCM) @ BNP Paribas CIB BNP Paribas Corporate & Investment Banking At BNP Paribas CIB, the DCM division includes : * energy & commodity financing * export & trade finance * media & telecom finance * real estate finance * leveraged finance * loan syndication & trading (securitized loans) * shipping finance * optimization & structured leasing * project finance. The bank of choice for issuers Corporate, financial and public-sector issuers worldwide have chosen BNP Paribas as their partner in the international capital markets. Our broad-based strength includes: - Investment Grade & High Yield - Financial Institutions - Sovereigns, Supranationals & Agencies - Hybrid Capital BNP Paribas is quite new in securitization and fixed income but has the potential to become a market leader on its way.
Views: 15874 QUANT GEN
Investment Banks
 
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An investment bank is a financial institution that assists individuals, corporations, and governments in raising capital by underwriting or acting as the client's agent in the issuance of securities (or both). An investment bank may also assist companies involved in mergers and acquisitions and provide ancillary services such as market making, trading of derivatives and equity securities, and FICC services (fixed income instruments, currencies, and commodities). There are two main lines of business in investment banking. Trading securities for cash or for other securities (e.g. facilitating transactions, market-making), or the promotion of securities (e.g. underwriting, research, etc.) is the "sell side", while buy side is a term used to refer to advising institutions concerned with buying investment services. Private equity funds, mutual funds, life insurance companies, unit trusts, and hedge funds are the most common types of buy side entities.
Views: 97 Mind Trader
How Banks Work Documentary
 
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CLICK HERE - http://activeterium.com/1DCR - FOR MORE FREE DOCUMENTARIES How Banks Work Documentary The very first banks were probably the religious temples of the ancient world. In them were stored gold in the form of easy to carry compressed plates. Their owners justly felt that temples were the safest places to store their gold as they were constantly attended, well built and were sacred, thus deterring would-be thieves. There are extant records of loans from the 18th Century BC in Babylon that were made by temple priests to merchants. Ancient Greece holds further evidence of banking. Greek temples as well as private and civic entities conducted financial transactions such as loans, deposits, currency exchange, and validation of coinage. Interestingly, there is evidence too of credit, whereby in return for a payment from a client, a Money Lender in one Greek port would write a credit note for the client who could "cash" the note in another city, saving the client the danger of carting coinage with him on his journey. Ancient Rome perfected the administrative aspect of banking and saw greater regulation of financial institutions and financial practices. Charging interest on loans and paying interest on deposits became more highly developed and competitive. The ascent of Christianity in Rome and its influence restricted banking, as the charging of interest and usury were seen as immoral. Jewish entrepreneurs, free of Christian taboos about money, established themselves in the provision of financial services increasingly demanded by the expansion of European trade and commerce. The modern Western economic and financial heritage begins as early as the establishment of Jonathan's Coffee-House, which later became the London Stock Exchange. This became a base for stock traders expelled from the Royal Exchange. In 1698 John Casting, began publishing a twice weekly newsletter of share and commodity prices, which he sold at Jonathan's. One of the oldest London Banking institutions still operating today is Barclay Bank, which was founded by John Frame and Thomas Gould in 1690. The bank was renamed to Barclay by Frame's son-in-law, James Barclay, in 1736. With the coming of democratic capitalism, around the time of Adam Smith (1776) there was a massive growth in the banking industry. Within the new system of ownership and investment, moneyholders were able to reduce the State's intervention in economic affairs, remove barriers to competition, and, in general, allow anyone willing to work hard enough-and who also has access to capital-to become a capitalist. It wasn't until over 100 years after Adam Smith, however, that companies began to apply his policies in large scale and shift the financial power from England to America. By the early 1900s New York was beginning to emerge as the world's leading financial center. Companies and individuals acquired large investments in (other) companies in the US and Europe, resulting in the first true market integration. This comparatively high level of market integration proved especially beneficial when World War I came-both sides in the conflict sought funds from the United States, by issuing new securities and selling existing holdings, though the Allied Powers raised by far the larger amounts. Being a lender to the world resulted in the largest growth of a financial economy to that point. Global banking and capital market services proliferated during the 1980s and 1990s as a result of a great increase in demand from companies, governments, and financial institutions, but also because financial market conditions were on the whole, bullish. Nevertheless, in recent years, the dominance of U.S. financial markets has been disappearing and there has been an increasing interest in foreign stocks. The extraordinary growth of foreign financial markets results from both large increases in the pool of savings in foreign countries, such as Japan, and, especially, the deregulation of foreign financial markets, which has enabled them to expand their activities. Thus, corporations and bank have started seeking investment opportunity abroad. Such growing internationalization and opportunity in financial services has entirely changed the competitive landscape, as now many banks have demonstrated a preference for the "universal banking" model so prevalent in Europe. Universal banks are free to engage in all forms of financial services, make investments in client companies, and function as much as possible as a "one-stop" supplier of both retail and wholesale financial services.
Views: 6465 Documentary Films
4.3 Financial Institutions - Banks
 
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Retail banks, savings banks, credit unions, commercial banks, central banks...
11 Difference Between Merchant Banking And Investment Banking
 
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1. Traditional merchant banks often expand into the field of securities underwriting, while many investment banks participate in trade financing activities.  2. Investment banks facilitate mergers and acquisitions through share sales and provide research and financial consulting to companies. 3. Based on: MERCHANT BANK:Fee based INVESTMENT BANK:Fee based and fund based 4. Example: Investment Banking: J.P. Morgan & Co. Bank of America Merrill Lynch Goldman Sachs Merchant Banking: J. S. Morgan & Co. Brown Brothers Harriman & Co. Samuel Montagu & Co. 5. Investment Bank is a financial institution that helps to government, corporate, HNI (High Net Worth) individual in raising capital. The merchant bank is a private financial institution that deals with international financial activities such as foreign corporate investment, foreign real estate investment and trade finance. 6. Investment banks focus on initial public offerings (IPOs) and large public and private share offerings. Merchant banks tend to operate on small-scale companies and offer creative equity financing, bridge financing and a number of corporate credit products. 7. Trade financing MERCHANT BANK:Offered to the clients INVESTMENT BANK:Rarely provided 8. Deals with: MERCHANT BANK: Small companies INVESTMENT BANK: Large companies 9. Functions of Investment Bank: Public Offerings of Debt and Equity Securities Private Placements of Debt and Equity Securities Raising Capital & Security Underwriting Mergers and Acquisitions Financial Advisory / Sponsor Group Finance Structured Finance / Securitization 10. Functions of Merchant Bank: To facilitate a client transaction To purchase securities in an operating company for the firm’s own account Facilitating Letter of Credit. corporate Financing 11. Investment banks often facilitate mergers and acquisitions activities. Merchant banks are not involved in M & A.
Views: 997 Patel Vidhu
What is an Investment Bank?
 
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Welcome to the Investors Trading Academy talking glossary of financial terms and events. Our word of the day is “Investment Bank” An individual or institution which acts as an underwriter or agent for corporations and municipalities issuing securities. Most also maintain broker/dealer operations, maintain markets for previously issued securities, and offer advisory services to investors. Investment banks also have a large role in facilitating mergers and acquisitions, private equity placements and corporate restructuring. Unlike traditional banks, investment banks do not accept deposits from and provide loans to individuals. The advisory divisions of investment banks are paid a fee for their services, while the trading divisions experience profit or loss based on their market performance. Professionals who work for investment banks may have careers as financial advisers, traders or salespeople. An investment banker career can be very lucrative, but it typically comes with long hours and significant stress. Because investment banks have external clients but also trade their own accounts, a conflict of interest can occur if the advisory and trading divisions don’t maintain their independence. Investment banks’ clients include corporations, pension funds, other financial institutions, governments and hedge funds. Size is an asset for investment banks. The more connections the bank has within the market, the more likely it is to profit by matching buyers and sellers, especially for unique transactions. The largest investment banks have clients around the globe. By Barry Norman, Investors Trading Academy - ITA
Brexit: Banking and Financial Services
 
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On Thursday 10th November, Brick Court hosted the latest in its series of panel discussions on the legal implications of Brexit. The event was moderated by Mark Hapgood QC, who opened by observing that one of the most important issues arising from Brexit is the impact it will have on banking and financial services in the UK. He posed two questions: what degree of risk is posed to the banking and financial services industries by leaving the EU, and what is the best way to mitigate that risk? Andrew Henshaw QC spoke about the existing passporting arrangements and the position the UK will find itself in if it neither joins the EEA nor negotiates full access to the single market. He considered investment and retail business, banking and insurance and reinsurance, identifying the existence of equivalence decision regimes and the opportunities for third country branches to operate within the EU. He noted that there are many gaps in these systems, and equivalence decisions may be hard to obtain for political reasons. In addition, no equivalence decisions are likely to be taken before the UK leaves the EU, and therefore financial institutions must plan for the worst. Caroline Binham (Financial Times) considered the risk to the pre-eminent position of London with regard to banking and financial services posed by Brexit. She noted that the risk depends on the form that Brexit ultimately takes, but observed that the mood in the City is increasingly sombre. The threats to jobs and GDP are severe, and the contagion effect means that the impact of Brexit will be felt well beyond the banking and finance industries. She also highlighted the fact that EU stands to lose as a result of Brexit, and doubted the attractiveness of relocating financial business to New York following the election of Donald Trump. Damien Bisseker (Credit Suisse) provided an in-house banking perspective. He observed that banks are in a difficult situation. They are under pressure from regulators to have plans in place for the worst case scenario, while it remains unclear what the post-Brexit regulatory framework will look like. Banks are also under time pressure to act. Factors banks must consider include the significance of their business with EEA counterparties, the attractiveness of different jurisdictions and the different models that could be adopted. He also noted the importance both of lobbying by banks and the lobbying of banks by foreign jurisdictions. Finally, he made the practical suggestion that banks should ensure that process agents are available throughout Europe. Jasbir Dhillon QC addressed the likely role for English law in international banking and finance transactions after Brexit. Considering choice of law, he observed that market counterparties are unlikely to move away from English law given its certainty, stability, familiarity and commerciality. Similarly, he expressed the view that market counterparties are likely to continue to prefer English jurisdiction. The knowledgeable judiciary, adherence to the freedom of contract and fidelity to the rule of law all make England an attractive place to litigate. There may even be a shift towards exclusive jurisdiction clauses if the UK ratifies the Hague Convention on Choice of Court Agreements as judgments obtained pursuant to such clauses will be enforceable throughout the EU. Finally, he observed that international arbitration will not be adversely affected by the UK’s departure from the EU. Simon Firth (Linklaters) spoke about the effect of Brexit on derivatives and the future of the ISDA Master Agreement. He also considered that English law will remain the favoured law in the context of derivatives for two key reasons. First, the characteristic series of transactions designed to hedge each other require a consistent choice of law to prevent exposure on any one transaction. In the absence of an obvious alternative to English law, it is unlikely the choice of law will shift. Second, the derivatives market has historically suffered from a lack of predictability as a result of the paucity of case law. However, this has been markedly improved by a series of good judgments from the English courts. A shift to a different choice of law would require his process to be restarted from scratch. The presentations were followed by a lively Q&A session, and comments were invited from the floor. Topics addressed included whether any positives could be seen as resulting from Brexit, the extent to which the UK could or would retain EU standards and legislation after leaving the EU, the market’s view on the model of Brexit likely to be adopted and the relevance of economic difficulties already facing Europe.
Views: 2275 Brick Court
International Financial Institution | WORLD BANK, IMF, European Investment Bank and other IFI
 
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An International Financial Institution (IFI) is a financial institution that has been established (or chartered) by more than one country, and hence are subjects of international law. The best known IFIs were established after World War II to assist in the reconstruction of Europe and provide mechanisms for international cooperation in managing the global financial system.
Views: 108 Abhijeet Gondane
Banking: "Banks and Credits" 1948 Coronet Instructional Films; Financial Institutions
 
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Financial Classic Films playlist: https://www.youtube.com/playlist?list=PLE7527E1C9F0B138B more at http://money.quickfound.net/ "Coronet Instructional Films (a division of Esquire Inc.) presents Banks and Credit. Educational collaborator James Harvey Dodd, PhD., Professor of Economics and Business Administration, Mary Washington College at University of Virginia." Reupload of a previously uploaded film with improved video & sound. Public domain film from the Library of Congress Prelinger Archives, slightly cropped to remove uneven edges, with the aspect ratio corrected, and one-pass brightness-contrast-color correction & mild video noise reduction applied. The soundtrack was also processed with volume normalization, noise reduction, clipping reduction, and/or equalization (the resulting sound, though not perfect, is far less noisy than the original). http://creativecommons.org/licenses/by-sa/3.0/ http://en.wikipedia.org/wiki/Bank A bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets. A bank is the connection between customers that have capital deficits and customers with capital surpluses. Due to their influence within a financial system and the economy, banks are highly regulated in most countries. Most banks operate under a system known as fractional reserve banking where they hold only a small reserve of the funds deposited and lend out the rest for profit. They are generally subject to minimum capital requirements which are based on an international set of capital standards, known as the Basel Accords. Banking in its modern sense evolved in the 14th century in the rich cities of Renaissance Italy but in many ways was a continuation of ideas and concepts of credit and lending that had its roots in the ancient world. In the history of banking, a number of banking dynasties have played a central role over many centuries... Banking in the modern sense of the word can be traced to medieval and early Renaissance Italy, to the rich cities in the north like Florence, Lucca, Siena, Venice and Genoa. The Bardi and Peruzzi families dominated banking in 14th century Florence, establishing branches in many other parts of Europe. One of the most famous Italian banks was the Medici Bank, set up by Giovanni di Bicci de' Medici in 1397. The earliest known state deposit bank, Banco di San Giorgio (Bank of St. George), was founded in 1407 at Genoa, Italy. The oldest bank still in existence is Monte dei Paschi di Siena, headquartered in Siena, Italy, which has been operating continuously since 1472. It is followed by Berenberg Bank of Hamburg (1590) and Sveriges Riksbank of Sweden (1668)...
Views: 841 Jeff Quitney
Investment Banking Crash Course Full AudioBook
 
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Please order ebook/audiobook of this video to support our channel https://www.smashwords.com/books/view/799142, https://www.amazon.co.uk/Investment-Banking-Crash-Course/dp/B078GS1QJH/ref=sr_1_1?ie=UTF8&qid=1540641035&sr=1-1&keywords=Investment+Banking+introbooks or https://www.audible.com/pd/Investment-Banking-Crash-Course-Audiobook/B078GS4DYL?qid=1540641049&sr=sr_1_1&ref=a_search_c3_lProduct_1_1&pf_rd_p=e81b7c27-6880-467a-b5a7-13cef5d729fe&pf_rd_r=22BQPGTWMFX48HWCGN9R& Mankind learned to invest a long time ago, but investment banking has a relatively short history. It wasn’t until the Dutch East India Company, VOC, started issuing bonds and shares of stock to the general public that investment banking saw the light of the day. But since then, the services provided by investment banks has grown exponentially and it is today considered to be one of the most lucrative segments of financial institutions. - video upload powered by https://www.TunesToTube.com
Views: 829 Education Channel
How to Pitch a Bank Stock (Shawbrook)
 
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In this tutorial, you’ll learn how to think about a bank stock pitch for a financial institutions group (FIG), including the valuation, operational scenarios, catalysts, risk factors, and the story behind the company and industry. You’ll also get a full 32-page example of a hedge fund/asset management stock pitch for a commercial bank (Shawbrook in the U.K.). Please see this link for all the files, the textual explanation, and more: http://www.mergersandinquisitions.com/bank-stock-pitch/ Table of Contents: 2:42 Part 1: The “Story” of the Company and the Industry 7:46 Part 2: The Structure and Scenarios 14:42 Part 3: Financial Modeling Challenges 18:14 Part 4: How to Make an Investment Decision 22:56 Part 5: Why This Recommendation Was Correct 24:23 Recap and Summary Please see this link for all the files, the textual explanation, and more: http://www.mergersandinquisitions.com/bank-stock-pitch/
Banking Explained – Money and Credit
 
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Banks are a riddle wrapped up in an enigma. We all kind of know that they do stuff with money we don’t understand, while the last crisis left a feeling of deep mistrust and confusion. We try to shed a bit of light onto the banking system. Why were banks invented, why did they cause the last crisis and are there alternatives? The music from the video is available here! http://epicmountainmusic.bandcamp.com/track/banking http://soundcloud.com/epicmountain/banking http://www.epic-mountain.com Visit us on our Website, Twitter, Facebook, Patreon or Behance to say hi! http://kurzgesagt.org https://www.facebook.com/Kurzgesagt https://twitter.com/Kurz_Gesagt http://www.patreon.com/Kurzgesagt http://www.behance.net/Kurzgesagt Banking Explained – Money and Credit Help us caption & translate this video! http://www.youtube.com/timedtext_cs_panel?c=UCsXVk37bltHxD1rDPwtNM8Q&tab=2
Careers in Investment Banking (Goldman Sachs Group)
 
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See how a career in Investment Banking offers early exposure to world-class clients and a platform to make a difference. Goldman Sachs (IBD) Investment Banking Division : We aspire to be the leading trusted advisor and financier to our clients, which include corporations, financial institutions, financial sponsors, governments and public authorities and boards of directors and special committees. The Investment Banking Division (IBD) is at the front end of Goldman Sachs' client franchise. We strive to provide best-in-class advice and execution excellence on the most complex transactions across products in order to help our clients grow. We are focused on being a significant financier and provider of capital-raising services, which, in turn, enables our clients to achieve their strategic goals. We remain committed to a strategy of co-investing with clients. HOW WE ARE ORGANIZED Our global structure allows us to better serve the strategic and financing needs of our clients across all geographies and industries. IBD encompasses two areas: IBD Classic and our Financing group. This dual structure enables us to offer the broadest range of products and advisory services, furthering our ability to deliver best-in-class solutions to our clients. Careers in (IBD) : Our Investment Banking teams deliver high-quality strategic advice and creative financing solutions to our clients, including mergers, acquisitions, financing, and risk management transactions. We pride ourselves in our resourcefulness and work on a variety of initiatives. On any given day, our work could include advising a company on a cross-border merger, structuring the initial public offering of a subsidiary, refinancing an outstanding bond and more. The Investment Banking division encompasses two groups: Investment Banking and the Financing Group. WHO WE LOOK FOR Working in the Investment Banking division, you will be helping clients solve some of their most critical financial and strategic challenges. We're looking for candidates who will thrive in a dynamic environment where multitasking, time management and stamina are essential. You should be comfortable working with numbers and be an analytical thinker. Strong communication and interpersonal skills are needed in order to work successfully with clients and team members. HOW WE'RE ORGANIZED The Investment Banking division's dual structure allows us to bring our expertise to a broad range of products and services. Teams across both groups work closely with clients to deliver creative financing solutions.
Views: 4093 QUANT GEN
Money and Finance: Crash Course Economics #11
 
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So, we've been putting off a kind of basic question here. What is money? What is currency? How are the two different. Well, not to give away too much, but money has a few basic functions. It acts as a store of value, a medium of exchange, and as a unit of account. Money isn't just bills and coins. It can be anything that meets these three criteria. In US prisons, apparently, pouches of Mackerel are currency. Yes, mackerel the fish. Paper and coins work as money because they're backed by the government, which is an advantage over mackerel. So, once you've got money, you need finance. We'll talk about borrowing, lending, interest, and stocks and bonds. Also, this episode features a giant zucchini, which Adriene grew in her garden. So that's cool. Special thanks to Dave Hunt for permission to use his PiPhone video. this guy really did make an artisanal smartphone! https://www.youtube.com/watch?v=8eaiNsFhtI8 Crash Course is on Patreon! You can support us directly by signing up at http://www.patreon.com/crashcourse Thanks to the following Patrons for their generous monthly contributions that help keep Crash Course free for everyone forever: Fatima Iqbal, Penelope Flagg, Eugenia Karlson, Alex S, Jirat, Tim Curwick, Christy Huddleston, Eric Kitchen, Moritz Schmidt, Today I Found Out, Avi Yashchin, Chris Peters, Eric Knight, Jacob Ash, Simun Niclasen, Jan Schmid, Elliot Beter, Sandra Aft, SR Foxley, Ian Dundore, Daniel Baulig, Jason A Saslow, Robert Kunz, Jessica Wode, Steve Marshall, Anna-Ester Volozh, Christian, Caleb Weeks, Jeffrey Thompson, James Craver, and Markus Persson -- Want to find Crash Course elsewhere on the internet? Facebook - http://www.facebook.com/YouTubeCrashCourse Twitter - http://www.twitter.com/TheCrashCourse Tumblr - http://thecrashcourse.tumblr.com Support Crash Course on Patreon: http://patreon.com/crashcourse CC Kids: http://www.youtube.com/crashcoursekids
Views: 670447 CrashCourse
How to analyze Banks and Financial Institutions
 
08:48
Please subscribe to the channel and leave a comment below. http://www.businessarin.com
What is Investment Banking in HINDI || Investment Banker ?| Highest Paying Jobs in India | World
 
07:26
What is Investment Banking in HINDI || Investment Banker ?| Highest Paid Jobs in India | World. If you want to know about Investment Banking then this video is for you in this video we have explained what is Investment Banking and Why it is called the Highest Paid Career in India as well as in the World. So If you want to know how you can become Investment Banker then You Must see Part 2 of this Video where we have explained How you can become Investment Banker. Links to the Part 2 Video is here - https://www.youtube.com/watch?v=qAKODfJZV9M&t=3s Do Like and Share it as much as you can in all your Facebook and Whatssap Groups for other people help too. Dont Forget to Subscribe If you haven't yet. YOU MAY INTERESTED IN OUR MBA AND OTHER COURSES RELATED VIDEO PLAYLIST's IN HINDI:- ►Everything About MBA in India - https://goo.gl/wGD8NM ✔ ►Top College Rankings - https://goo.gl/LEFzun ✔ ►All about Investment Banking - https://goo.gl/Hk1rix ✔ ►Financial Certification in Hindi - https://goo.gl/sKPqod ✔ ►Internship and Apprenticeship Video in Hindi - https://goo.gl/RCBqBY ✔ ►MCA Course Detail Hindi - https://goo.gl/bxntn3 ✔ ►After 12th Best Courses for Science, Commerce and Arts - https://goo.gl/rVMcTR ✔ ►BCA Course Related Video in Hindi - https://goo.gl/wsCM2G ✔ ►BTech Course Related Video in Hindi - https://goo.gl/DqvfGF ✔ ►Fastest and Easiest Way to Learn English - https://www.youtube.com/watch?v=GF5OHAZcW0k ✔ ► How to Get Education LOAN in INDIA - https://www.youtube.com/watch?v=DoluUHBZ1zw ✔ ► MBA INDIA VS MBA ABROAD - WHICH IS BEST ? - https://www.youtube.com/watch?v=ufgd8pkvtjE ✔ ► Highest Paying Careers in India - https://www.youtube.com/watch?v=GF5OHAZcW0k ✔ WATCH OUR BEST VIDEOS RELATED TO INTERESTING FACTS & OPINIONS [HINDI] ►Padmavati controversy in 5 minutes :- https://www.youtube.com/watch?v=ar_orIiwQqU&t=2s ✔ ►North Korea vs USA Nuclear War :- https://www.youtube.com/watch?v=HrJkIqc3lB8&t=1s ✔ ►Kamlesh Viral Video Truth :- https://www.youtube.com/watch?v=J-t0u81Tpt0&t=2s ✔ ►Dangal Girl Zaira Wasim Issue :- https://www.youtube.com/watch?v=j9z7MHSKG14&t=28s ✔ ►Countries where Education is free for Indians - https://www.youtube.com/watch?v=qDNG6H5qRA0&t=2s ✔ BUY OUR RECORDING GEAR AT DISCOUNTED PRICES:- External Recording Blue Mic -http://amzn.to/2ynJOSn My Nikon Dslr d5600 - http://amzn.to/2ynN7sV My Collar Mic- http://amzn.to/2x3LAEf ABOUT US :- Praveen Dilliwala is a youth oriented Review Channel Where you will get Videos related to Education,Opinions, Jobs, Motivational, Interesting Facts and also I will share my experience about these things. Our Motto is to provide unbiased and right information so that you make informed decision. Follow us Facebook - https://www.facebook.com/PraveenDilliwala Twitter - https://twitter.com/praveendiliwala Instagram - https://www.instagram.com/praveendilliwala Subscribe Here- https://www.youtube.com/PraveenDilliwala
Views: 124271 Praveen Dilliwala
Future Bank Today | Episode 1:  Machine Learning
 
16:54
Future Bank Today: Innovations in our Financial Institutions
Views: 21936 Future Bank Today
Choosing Your Financial Institution
 
03:05
Discover the benefits of credit unions and how they differ from big banks.
Investment bank Meaning
 
00:24
Video shows what investment bank means. A financial institution that deals with raising capital, trading in securities and managing corporate mergers and acquisitions.. Investment bank Meaning. How to pronounce, definition audio dictionary. How to say investment bank. Powered by MaryTTS, Wiktionary
Views: 1127 ADictionary
@MaxKeiser supports CrowdFunded Investment Bank @BankToTheFuture
 
01:06
http://bit.ly/121sJCW In order to launch a transparent Crowd-Investment Bank, BankToTheFuture.com will raise all it's funds from people rather than institutions, the driving principle behind the company. BankToTheFuture.com will take the CrowdFunding concept made famous by sites like Kickstarter and Indigogo, where the crowd decide what gets funded by viewing online pitches and contributing money to them in exchange for rewards, and do the same, but this time the crowd get shares in the company, rather than rewards. Max Keiser and CEO Simon Dixon have been discussing the potential of what can be achieved when BankToTheFuture.com applies for a full investment banking license, allowing them to get involved in turning every financial product into a crowd-funded product, shifting the power away from financial institutions and over to the people. "I believe in a Scorched Earth policy when it comes to bank reform. There is no reforming them actually, given how deeply they have embedded themselves into the host, the UK and US economy. so we must essentially euthanize them with a fully transparent investment bank like Simon Dixon's BankToTheFuture.com." Max Keiser BankToTheFuture.com are currently seeking funding via a £2m crowdfunding bid so they can apply for the investment banking license and create the first Crowd-Investment Bank. In their pitch video, CEO, Simon Dixon states he recently turned down the opportunity of funding from venture capital firms and instead decided to put their destiny in the hands of the crowd, where the crowd can become shareholders in BankToTheFuture.com by investing online. There are two ways you can get involved, you can back them in exchange for the rewards on offer, just like a Kickstarter campaign, or you can view their investment pitch and buy shares in the company after completing their very fast compliance check. In order to make this happen they need to raise £2m from the crowd and show that it is no longer financial institutions determining who gets funded, but in fact, people who can control the purse strings and determine what gets funded. "We are witnessing a shift from financial institutions deciding who gets the money, to you deciding who gets the money." Simon Dixon, CEO BankToTheFuture.com You can back them, invest in them or just see how the bid is getting on here. http://bit.ly/121sJCW
Views: 1646 BnkToTheFuture.com
The Fed Explains Bank Supervision and Regulation
 
04:52
Healthy banks and healthy economies go hand in hand. The latest in the Atlanta Fed’s animated video series explains how the Federal Reserve ensures banks are doing business safely and providing fair and equitable services to their communities.
Views: 24238 AtlantaFed
Interview with David Scola, global head of banks, FIG, corporate banking, Barclays - View from Sibos
 
05:29
Barclays' global head of banks, financial institutions group, corporate banking, David Scola, provides insight into the main themes at Sibos in Singapore and looks at how the industry is collaborating on financial crime compliance utilities.
Views: 414 The Banker
Should Commercial Banks Have Investment Bank Powers? Financial Services Restructuring
 
02:41:52
In the United States the term "commercial bank" was often used to distinguish it from an investment bank due to differences in bank regulation. After the Great Depression, through the Glass–Steagall Act, the U.S. Congress required that commercial banks only engage in banking activities, whereas investment banks were limited to capital market activities. This separation was mostly repealed in 1999 by the Gramm–Leach–Bliley Act but was restored by the Volcker Rule, implemented in January 2014 as part of the Dodd-Frank Act of 2010. Core products and services: Accepting money on various types of Deposit accounts Lending money in the form of Cash: by overdraft, instalment loan etc. Lending money in Documentary form: Letters of Credit, Guarantees, Performance bonds, securities, underwriting commitments and other forms of off-balance sheet exposure. Inter- Financial Institutions relationship Cash management Treasury management Private Equity financing Issuing Bank drafts and Bank cheques Processing payments via telegraphic transfer, EFTPOS, internet banking, or other Traditionally, large commercial banks also underwrite bonds, and make markets in currency, interest rates, and credit-related securities, but today large commercial banks usually have an investment bank arm that is involved in the aforementioned activities. https://en.wikipedia.org/wiki/Commercial_bank An investment bank is a financial institution that assists individuals, corporations, and governments in raising financial capital by underwriting or acting as the client's agent in the issuance of securities (or both). An investment bank may also assist companies involved in mergers and acquisitions (M&A) and provide ancillary services such as market making, trading of derivatives and equity securities, and FICC services (fixed income instruments, currencies, and commodities). Unlike commercial banks and retail banks, investment banks do not take deposits. From 1933 (Glass–Steagall Act) until 1999 (Gramm–Leach–Bliley Act), the United States maintained a separation between investment banking and commercial banks. Other industrialized countries, including G7 countries, have historically not maintained such a separation. As part of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act of 2010), the Volcker Rule asserts full institutional separation of investment banking services from commercial banking. The two main lines of business in investment banking are called the sell side and the buy side. The "sell side" involves trading securities for cash or for other securities (e.g. facilitating transactions, market-making), or the promotion of securities (e.g. underwriting, research, etc.). The "buy side" involves the provision of advice to institutions concerned with buying investment services. Private equity funds, mutual funds, life insurance companies, unit trusts, and hedge funds are the most common types of buy side entities. An investment bank can also be split into private and public functions with an information barrier which separates the two to prevent information from crossing. The private areas of the bank deal with private insider information that may not be publicly disclosed, while the public areas such as stock analysis deal with public information. An advisor who provides investment banking services in the United States must be a licensed broker-dealer and subject to U.S. Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) regulation. https://en.wikipedia.org/wiki/Investment_banking
Views: 232 Way Back
The Perfect Storm in Investment Banking / Capital Markets
 
03:36
Marc Murphy, CEO of Fenergo, discusses the perfect storm of challenges that’s taking place in investment banking and capital markets and how Fenergo can help these financial institutions to weather this storm by solving four critical challenges – regulatory compliance, operational efficiencies, time to revenue and client experience.
Views: 2761 Fenergo
Investment banking
 
31:59
An investment bank is a financial institution that assists individuals, corporations, and governments in raising capital by underwriting or acting as the client's agent in the issuance of securities (or both). An investment bank may also assist companies involved in mergers and acquisitions and provide ancillary services such as market making, trading of derivatives and equity securities, and FICC services (fixed income instruments, currencies, and commodities). Unlike commercial banks and retail banks, investment banks do not take deposits. From 1933 (Glass--Steagall Act) until 1999 (Gramm--Leach--Bliley Act), the United States maintained a separation between investment banking and commercial banks. Other industrialized countries, including G8 countries, have historically not maintained such a separation. As part of the Dodd--Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act of 2010), Volcker Rule asserts full institutional separation of investment banking services from commercial banking. This video is targeted to blind users. Attribution: Article text available under CC-BY-SA Creative Commons image source in video
Views: 168 Audiopedia
Financial Institutions, Lecture 10
 
01:31:12
Introduction to Investment Banking, Issues, Underwriting, Origination, Equity Financing, Debt Financing, Registration Statement, Prospectus,Shelf Registration, Syndication, Risk Sharing, Best Efforts Agreement, Fully Underwritten Issue, Overcollateralization, block-trading, LBOs, Leveraged Loans, Bridge Loans, Arbitrage, Private Placements, Valuations, Junk Bonds, Takeovers & Hostile LBOs, Mergers, Asset Stripping, Divestitures, Synergy, Greenmail,
Views: 3848 Krassimir Petrov
Financial Market & its Types | Primary & Secondary Market | Exams
 
09:14
Exam Kabila is providing latest Content in English and hindi. Important Lectures and Notes for Banking, bank, IBPS PO and Clerk, MBA, BBA, Other Finance Exams, Management Papers, SBI, Railways, SSC, LIC AAO, , IAS, UPSC, CDS, Railways, NDA, State PCS, CLAT and all other similar government competitive examinations. A financial market is a broad term describing any marketplace where buyers and sellers participate in the trade of assets such as equities, bonds, currencies and derivatives. e.g., a stock exchange or commodity exchange. # Types of Financial Market #Capital markets # Stock markets, #Bond markets, #OTC #Commodity markets #Money markets, #Derivatives markets, #Futures markets, #Foreign exchange markets, #Spot market #Interbanks market #Credit market #Cash market 1. capital markets: Capital markets are markets for buying and selling equity and debt instruments. Capital markets channel savings and investment between suppliers of capital such as retail investors and institutional investors, and users of capital like businesses, government and individuals. The capital markets may also be divided into primary markets and secondary markets. A. primary markets: Newly formed (issued) securities are bought or sold in primary markets, such as during initial public offerings. The transactions in primary markets exist between issuers and investors B. secondary markets. : Secondary markets allow investors to buy and sell existing securities. secondary market transactions exist among investors. a. Stock Market Stock markets allow investors to buy and sell shares in publicly traded companies. Any subsequent trading of stock securities occurs in the secondary market. b. Over-The-Counter Market An OTC market handles the exchanging of public stocks not listed on the NASDAQ, New York Stock Exchange etc. c. Bond Markets A bond is a security in which an investor loans money for a defined period of time at a pre-established rate of interest. Bond markets, which provide financing through the issuance of bonds, and enable the subsequent trading thereof. Money Market A money market is a portion of the financial market that trades highly liquid and short-term maturities. Derivatives Market The derivatives market is a financial market that trades securities that derive its value from its underlying asset. Forex Market The forex market is a financial market where currencies are traded. This financial market is the most liquid market in the world as cash is the most liquid of assets. Spot/Cash Market A cash market is a marketplace for the immediate settlement of transactions involving commodities and securities. Interbank Market The interbank market is the financial system and trading of currencies among banks and financial institutions Equity Market The market in which shares are issued and traded, either through exchanges or over-the-counter markets. It is Also known as the stock market Commodity Market' A commodity market is a physical or virtual marketplace for buying, selling and trading raw or primary products,
Views: 118474 ExamKabila
Dmitri Senchenko BlockShow Americas 2018 Interview
 
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Dmitri Senchenko Founder of Feron Stablecoin, Ex Goldman Sachs' Financial Institutions Group Dmitri is a former investment banker turned serial entrepreneur. Previously with the Goldman Sachs' Financial Institutions Group, he has taken part in a number of landmark transactions, including advising the UK Government on nationalisation of Northern Rock - the British bank that became insolvent in the aftermath of the subprime financial crisis, Merger of Emirates Bank International and National Bank of Dubai as well as Sale of Absolut Bank to KBC Group. Dmitri's first-hand experience with bank failure has given rise to an enduring motivation to contribute towards a truly robust and fair financial system. Apart from that, Dmitry previously acted as a Consultant at Monitor Group, now Monitor Deloitte. SUBSCRIBE here: https://www.youtube.com/channel/UC2xsavNLSzXNA1H89ZGgQuw?view_as=subscriber Follow us on social media: Twitter: https://twitter.com/BlockShowcom Instagram: https://www.instagram.com/blockshowcom Facebook: https://www.facebook.com/blockshowcom Telegram: https://t.me/blockshow Reddit: https://www.reddit.com/user/BlockShow Powered by Cointelegraph
Views: 78 BlockShow
Did You Know? Asian Development Bank
 
03:24
Have you ever stopped to think about how a development bank works? The Asian Development Bank has been around around for more than 50 years now, but how does it go about reducing poverty and promoting prosperity in the Asia Pacific region?
Views: 12118 Asian Development Bank
Asset Management: Industry Overview and Careers in Asset Management
 
04:45
Asset Management: Industry overview and Careers in Asset Management Asset Management is about managing clients’ investments and providing them with the strategies and expertise that would allow them to achieve their goals and secure their financial future. This video is part of our series dedicated to the different sub-industries in the world of Business & Finance.Our goal is to understand how it functions, what type of services it offers its clients, which are the major players in the field and what it is like to do this for a living. An individual or an institution is likely to approach an asset management firm when their investment income is substantial. In such cases, asset managers are able to offer expertise across a wide spectrum of asset classes (such as stocks, bonds, commodities, real estate, private equity, etc). Moreover, large firms have branches all over the world and are therefore able to offer geographical expertise as well. Given that asset managers closely follow all of these markets, they are able to offer high-quality advice and superior risk-return investments. The large players in the asset management industry are indeed very large. There are several companies whose assets under management exceed $1 trillion. Some of them are pure investment funds (BlackRock, Vanguard, StateStreet, Fidelity), while others are arms of the large banking conglomerates (Goldman Sachs, Deutsche Bank, UBS, BNP). The largest firm in the world in terms of assets under management in 2015 was BlackRock. On Facebook: https://www.facebook.com/365careers/ On the web: http://www.365careers.com/ On Twitter: https://twitter.com/365careers Subscribe to our channel: https://www.youtube.com/365careers
Views: 111014 365 Careers
Financial Markets and Institutions - Lecture 01
 
43:25
Textbook: "Financial Markets and Institutions" by Saunders and Cornette. Economics, financial economics, financial system, financial instruments, financial markets, financial institutions, financial claim, financial asset, intermediation, funds, funding, finance, financial resource, primary market, secondary market, saver, investor, issue, issuer, money market, capital market, money market instrument, capital market instrument, short-term, long-term, maturity, liquidity, price discovery, debt, equity, residual claim, creditors, lenders, debtors, borrowers, income, net income, profit, return, gain, asset, asset classes, primary asset classes.
Views: 75304 Krassimir Petrov
The Allowance for Loan Losses for Banks (FIG)
 
22:18
In this tutorial, you’ll learn all about the Allowance for Loan Losses and the Provision for Credit Losses for commercial banks, which are important topics related to accounting and valuation for financial institutions (FIG). These topics are extremely likely to come up in interviews with these groups, and will come up on the job day in and day out. http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" Table of Contents: 3:03 Part 1: Allowance for Loan Losses vs. Regulatory Capital 4:24 Part 2: Loan Loss Accounting on the Financial Statements 8:18 Part 3: Example Scenarios to Illustrate the Mechanics 16:45 Part 4: How Regulatory Capital and the Allowance for Loan Losses Are Linked 19:50 Recap and Summary The Business Model of Commercial Banks Banks collect money from customers (deposits), and then lend I to people who need to borrow money (loans). They *expect* to lose something on these loans because some people and companies default and become unable to pay back their loans. But there are two categories: *expected losses* and * unexpected losses*. The Allowance for Loan Losses corresponds to *expected losses*, while Regulatory Capital corresponds to *unexpected losses*. Loan Loss Accounting on the Three Financial Statements Balance Sheet: The Allowance is a contra-asset that’s netted against Gross Loans to calculate Net Loans. Additions: The Provision for Credit Losses will increase this reserve, making the contra-asset more negative. This Provision represents the *additional* amount, above and beyond the existing Allowance, that the bank expects to lose. Subtractions: Net Charge-Offs (actual defaults) will reduce this Allowance, making the contra-asset less negative. Income Statement: The Provision for Credit Losses is an expense that reduces Pre-Tax Income and Net Income, but Net Charge-Offs do not appear on the IS... not directly, anyway. Cash Flow Statement: The Provision for CLs is a non-cash add-back; you also record Loan Additions here. Just as with the Income Statement, Net Charge-Offs do NOT show up here. Loan Loss Accounting, Illustrated in Different Scenarios Scenario #1: The Bank expects to lose an ADDITIONAL $10 on its Loans It simply records $10 for the Provision for Credit Losses. Gross Loans stays the same, but the Allowance becomes $10 more negative, and Net Loans declines by $10 as a result. Scenario #2: Bank adds $100 in Loans, and expects to lose $5 on them It records $5 for the Provision for Credit Losses. Gross Loans increases by $100, the Allowance becomes $5 more negative, and the Net Loans figure increases by $95. Scenario #3: Now the bank actually loses $5 and records the charge-off The Gross Loans figure declines by $5 and the Allowance for Loan Losses becomes $5 more positive. Those changes cancel each other out, and so the Net Loans figure stays the same. There’s no Income Statement impact. Scenario #4: …but now, there’s a recovery of $2! Due to collateral, or the borrowers suddenly repaying some of the loan Now, the Gross Loans figure increases by $2, but the Allowance also becomes $2 more negative – so the changes cancel each other out once again, and Net Loans stays the same. There’s no Income Statement impact. Scenario #5: The Allowance is $10, but there’s a Gross Charge-Off of $20 – what happens? How can this possibly work? In this case, the bank simply has to *increase* its Allowance for Loan Losses to cover this unexpected loss. So the bank might set aside, say, an additional $20, and therefore record a $20 Provision for Credit Losses, which results in a higher Allowance to cover this loss. The Net Loans figure ends up declining because the Gross Loans figure will fall and the Allowance will eventually return to its original level. How Regulatory Capital and the Allowance for Loan Losses Are Linked So how exactly does Regulatory Capital (mostly Common Equity or Equity) “absorb” losses? Because when an unexpected loss occurs, banks have to increase their Allowance for Loan Losses. They do this by increasing the Provision for CLs, which reduces Net Income since it appears on the Income Statement. That reduced Net Income, in turn, reduces Shareholders’ Equity. So Regulatory Capital “absorbs losses” by ensuring that Equity stays above a certain level, even if Net Income falls… since a dramatic drop in Net Income would come, most likely, from unexpected losses. The capital ratios fall when this happens, as they should. RESOURCES: https://youtube-breakingintowallstreet-com.s3.amazonaws.com/Allowance-for-Loan-Losses.xlsx https://youtube-breakingintowallstreet-com.s3.amazonaws.com/Allowance-for-Loan-Losses.pdf
Jeffrey Sachs, Paul Krugman & George Soros on Financial Crisis, Recession, Chinese Economy (2012)
 
01:57:06
The immediate or proximate cause of the crisis in 2008 was the failure or risk of failure at major financial institutions globally, starting with the rescue of investment bank Bear Stearns in March 2008 and the failure of Lehman Brothers in September 2008. Many of these institutions had invested heavily in risky securities that lost much or all of their value when U.S. and European housing bubbles began to deflate during the 2007-2009 period. Further, many institutions had become dependent on short-term (overnight) funding markets subject to disruption.[37][38] The origin of these housing bubbles involved two major factors: 1) low interest rates in the U.S. and Europe following the 2000-2001 U.S. recession; and 2) significant growth in savings available from developing nations due to ongoing trade imbalances.[39] These factors drove a large increase in demand for high-yield investments. Large investment banks connected the housing markets to this large supply of savings via innovative new securities, fueling housing bubbles in the U.S. and Europe.[40] Many institutions lowered credit standards to continue feeding the global demand for mortgage securities, generating huge profits while passing the risk to investors. However, while the bubbles developed, household debt levels rose sharply after the year 2000 globally. Households became dependent on being able to refinance their mortgages. Further, U.S. households often had adjustable rate mortgages, which had lower initial interest rates and payments that later rose. When global credit markets essentially stopped funding mortgage-related investments in the 2007-2008 period, U.S. homeowners were no longer able to refinance and defaulted in record numbers, leading to the collapse of securities backed by these mortgages that now pervaded the system.[40][41] The failure rates of subprime mortgages were the first symptom of a credit boom turned to bust and of a real estate shock. But large default rates on subprime mortgages cannot account for the severity of the crisis. Rather, low-quality mortgages acted as an accelerant to the fire that spread through the entire financial system. The latter had become fragile as a result of several factors that are unique to this crisis: the transfer of assets from the balance sheets of banks to the markets, the creation of complex and opaque assets, the failure of ratings agencies to properly assess the risk of such assets, and the application of fair value accounting. To these novel factors, one must add the now standard failure of regulators and supervisors in spotting and correcting the emerging weaknesses. By 2007, real estate bubbles were still under way in many parts of the world,[58] especially in the United States,[12] France, United Kingdom, Italy, Spain, The Netherlands, Australia, United Arab Emirates, New Zealand, Ireland, Poland,[59] South Africa, Israel, Greece, Bulgaria, Croatia,[60] Norway, Singapore, South Korea, Sweden, Finland, Argentina,[61] Baltic states, India, Romania, Ukraine, and China.[62] U.S. Federal Reserve Chairman Alan Greenspan said in mid-2005 that "at a minimum, there's a little 'froth' [in the U.S. housing market]...it's hard not to see that there are a lot of local bubbles".[63] The Economist magazine, writing at the same time, went further, saying "the worldwide rise in house prices is the biggest bubble in history".[64] Real estate bubbles are (by definition of the word "bubble") followed by a price decrease (also known as a housing price crash) that can result in many owners holding negative equity (a mortgage debt higher than the current value of the property). During 2008, three of the largest U.S. investment banks either went bankrupt (Lehman Brothers) or were sold at fire sale prices to other banks (Bear Stearns and Merrill Lynch). The investment banks were not subject to the more stringent regulations applied to depository banks. These failures augmented the instability in the global financial system. The remaining two investment banks, Morgan Stanley and Goldman Sachs, potentially facing failure, opted to become commercial banks, thereby subjecting themselves to more stringent regulation but receiving access to credit via the Federal Reserve. http://en.wikipedia.org/wiki/Great_Recession
Views: 22905 The Film Archives

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