Private Banking, Investment Decisions, and Structured Financial Products To order this title, and for more information, click here
By Dimitris Chorafas, Independent Finance Consultant, France
Description This book has two themes: Private Banking and investment decisions regarding Structural Financial Products. Dr. Dimitris Chorafas examines
in a rigorous way whether structured financial products are advisable investments for retail and institutional investors and, if yes,
which risks they entail. As our society becomes increasingly affluent, and state-supported pension schemes find it difficult to survive,
a growing number of high net-worth individuals, and families, have become retail investors – looking for ways and means to optimize wealth
management, and Private Banking deals with these sorts of clients. Private banking also deals with clients that are institutional investors,
such as pension funds, mutual funds, and insurance companies, as well as not-for-profits, foundations and companies explicitly set up
for wealth management. Both institutional and retail investors are being offered by the banks they work with structured products. Typically,
these are securities that provide them with a redemption amount, with may be either with full or partial capital protection, and some
type of return. The book examines structured financial products, their polyvalent nature, and the results which could be expected from
them.
Return on structural instruments, which are essentially derivatives, is paid in function of a specific investment strategy on
selected underlying asset(s). This essentially means on the performance of the underlyings, obtained by asset managers, which may be
banks or hedge funds, through purchase or sale of embedded options. But there are risks. Both risk and return from structured products
are related to three main issues: the volatility of future value of an underlying, the uncertainty of future events, and the exposure
of the product. Every type of investment is subject to market forces, and the more leveraged a portfolio is, the greater will probably
be both the assumed risk and the expected reward. The fact that structured financial products appeal, or at least are being marketed,
to both retail investors and institutional investors makes the dual approach deliberately chosen in this book most advisable. This book
addresses all these issues in a practical manner with numerous case studies and real-world examples drawn from the author?s intensive
research.
Audience
At the institutional side are the practitioners and professionals, from treasurers to operational executives, risk management officers
and their staff, as well as auditors and financial analysts; investment consultancies; accountancies; auditing firms, independent rating
agencies, and central bankers.
Contents PART ONE: PRIVATE BANKING
Chapter 1: PRIVATE BANKING DEFINED
1. Introduction
2. Private Banking Clients
3. Organizational Challenges,
Security and Secrecy
4. A Private Banking Roadmap
5. The Recycling of Household Debt Through Private Banking
6. Synergy of Private Banking
and Institutional Investors
7. A System Approach to Wealth Management
Chapter 2: KNOW YOUR CUSTOMER AND HIS/HER PROFILE
1. Introduction
2. The Sense of Professional Investment Services
3. Wealth Management in Accordance to the Client's Profile
4. Knowledge Engineering
Is Assisting the Investor
5. A Financial Advisory System for Currency Exchange
6. Caveat Emptor and Accountability in Private Banking
Chapter 3: BUSINESS OPPORTUNITY: FEES AND COMMISSIONS FROM PRIVATE BANKING
1. Introduction
2. Trades, Investments, and Private Banking
Customers
3. Establishing a Strategy of Fees and Commissions
4. Different Types of Companies Have Different Strategic Aims
5. Performance
and Remuneration of Investment Managers
6. Simulation of Portfolio Performance
7. The Impact of Business Risk
Chapter 4: RISK AND RETURN
WITH INVESTMENTS
1. Introduction
2. Basic Notions of Risk Assessment
3. Prerequisites for Rigorous Risk Control
4. Fine-Tuning the Philosophy
of Investments
5. Risk and Return with Implied Volatility
6. Risk-Adjusted Pricing. An Example with Credit Risk
7. An Introduction to
Stress Testing
PART TWO: ASSET MANAGEMENT
Chapter 5: ASSET MANAGEMENT DEFINED
1. Introduction
2. Integrated Financial Markets
3.
Asset Allocation Strategies
4. Asset Allocation and the Shift in Economic Activity
5. Real Estate Property Derivatives. A Case Study
6. Passive and Active Investment Strategies
7. A Critical View of Investment Strategies
8. The Portfolio's Intrinsic Value
Chapter
6: BUSINESS MODELS FOR ASSET MANAGEMENT
1. Introduction
2. Choosing the Investment Manager
3. The Contribution to Asset Management by
Contrarians
4. Asset Management as an Enterprise
5. Hedging Strategies Followed by Portfolio Managers
6. Deliverables, Performance and
the Administration of Assets
7. Past Performance Is No Prognosticator of Future Results
Chapter 7: OUTSOURCING AND INSOURCING ASSETS
1. Introduction
2. Risk and Return with Outsourcing
3. Custody Only, Mid-Way Solutions, and Discretionary Powers
4. Building Up the
Investor's Portfolio
5. Efficiency in Private Banking and in Asset Management
6. Conceptual Factors in Portfolio Management; the Option
Model of Investing
7. The Private Banking Profit Center
Chapter 8: TRUST DUTIES AND LEGAL RISK
1. Introduction
2. Trust and Trustee
Responsibilities
3. Legal Risk and the Case of Tort
4. Reasons Behind Legal Risk, and Cost of Litigation
5. Legal Risk and Management
Risk Correlate
6. Mishandling the Client: Small Cases Which Can Lead to Legal Risk
7. Big Cases of Legal Risk: Parmalat, its Investors,
Auditors and Bankers
PART THREE: DERIVATIVE FINANCIAL INSTRUMENTS, STRUCTURED PRODUCTS, AND RISK CONTROL
Chapter 9: DERIVATIVE FINANCIAL
INSTRUMENTS DEFINED
1. Introduction
2. The Changing Nature of Derivatives
3. Underlying and Notional Principal Amount
4. Derivatives
Which Became Institutionalized
5. Private Banking Derivatives
6. Bank Capital Invested in Derivatives
7. Dr. Alan Greenspan on Derivatives
8. George Soros on Derivatives
Chapter 10: STRUCTURED FINANCIAL PRODUCTS
1. Introduction
2. Structured Products Defined
3. Structured
vs Synthetic Products
4. The Role of Strategists, Traders and Modeling Controllers
5. Capital Protection. Real or Fancy?
6. Adjustments
and Redemptions of Structured Products
7. The Illiquidity of Structured Instruments
Chapter 11: CONTROLLING THE RISK TAKEN WITH STRUCTURED
PRODUCTS
1. Introduction
2. Credit Risk
3. Bond Spreads
4. Liquidity Risk
5. General Market Risk
6. Market Volatility Risk
7. Asset
Protection from Volatility in Interest Rates
8. Equity Derivatives and the "Greeks"
PART FOUR: CASE STUDIES WITH THREE MAIN CLASSES
OF STRUCTURED PRODUCTS
Chapter 12: FIXED INCOME STRUCTURED PRODUCTS
1. Introduction
2. Structured Notes Defined
3. The Broader Horizon
of Debt Securities
4. Types of Fixed Income Derivatives
5. Capital Protection with Fixed Income Instruments
6. Protected Interest Notes
7. Secondary Markets as Indicator of Market Discipline
Chapter 13: PRACTICAL EXAMPLES WITH FIXED INCOME DERIVATIVES
1. Introduction
2. Inflation-Linked Notes
3. Real vs Nominal Interest Rates
4. Capital Protected Notes
5. Accrucal Notes
6. Callable Reserve Floaters
7. Stairway Notes
8. Fixed and Variable Rate Notes
9. Bull Notes
10. Structured Instruments for Credit Risk
Chapter 14: EQUITY-TYPE
STRUCTURED PRODUCTS
1. Introduction
2. Equity Derivatives
3. Players in Equity Derivatives
4. Speculation with Equity-Type Products
5.
Risks Taken with Analytics
6. The Irrelevance of Book Value
7. Case Study with Quoted Companies
8. Case Study with Private Equity Funds
Chapter 15: PRACTICAL EXAMPLES WITH EQUITY TYPE DERIVATIVES
1. Introduction
2. Absorber Certificates
3. Early Repayment Certificates
4. Enhanced Yield Certificates
5. Reverse Exchangeable Certificates
6. Potential Share Acquisition Certificates
7. EUR Complete Participation
Securities
8. US$ Non-Interest Bearing Note Linked to Equity
9. The Price of IPOs
Chapter 16: CURRENCY EXCHANGE STRUCTURED PRODUCTS
1. Introduction
2. Currency Transactions and Economic Exposure
3. Aftermath of Exchange Rate Volatility
4. Structured Instruments on
Forex Rates and Mismatch Risk
5. Dual Currency Structured Products
6. US$/Asian Currency Basket
7. Stress Testing for Interest Rate and
Forex Risk
Appendix: DERIVATIVES AS A TAX HAVEN
Books and book related electronic products are priced in US dollars (USD), euro (EUR), and Great Britain Pounds (GBP). USD prices apply to the Americas and Asia Pacific. EUR prices apply in Europe and the Middle East. GBP prices apply to the UK and all other countries.
Home | Elsevier Sites | Privacy Policy | Terms and Conditions | Feedback | Site Map | A Reed Elsevier Company