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Treasury: the instruments and their uses
- Course Outline
Aim
The treasury in a bank or in a company, is responsible for the availability
and economic management of funds. This course will provide delegates with a
description of the treasury function. It will describe the products and how they
are applied in an institution’s day to day activities.
The conflicting requirements of the issuer and of the investor will be
examined in detail.
COURSE PROGRAMME
The role of the treasury
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Funding, the inter-bank market vs. liquidity management
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Transfer pricing, evaluation and performance measurement
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Servicing client needs:deposits and loans current accounts.
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The foreign exchange factor. Currency management.
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Role of the Asset & Liability Committee (‘ALCo’)
Yield curves
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The term structure of yield curves – risk and return
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Their use as a forecasting tool
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Why yield curves change shape
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Case study - Yield curve analysis
The Money Markets and other funding sources
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Background and structure of Money Markets
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Central bank operations: Open Market Operations, Treasury Bills and Repo
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Cash market instruments: deposits – call, notice and fixed time; CDs,
Bills and CP
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Capital market instruments: Bonds, FRNs, MTNs and Subordinated debt
The Foreign Exchange Spot and Forward Markets
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Procedures and practices: trading, confirmation and settlement
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Major and minor currencies and Proxies
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Basket currencies (Euro)
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Cross currencies (Euro/YEN, STG/Euro)
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Premiums and discounts and Interest rate differentials
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Calculating forward rates and interest rates from forward points
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Funding off the swap
The use of derivatives in the Treasury
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The interest rate instruments (Futures, FRA’s)
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The FX derivative market (currency options, futures)
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Treasury hedging purposes
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Client requirements, options vs. futures
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Interest rate and currency swaps
Capital Market Instruments - an overview
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Introduction to Bond Market - Governments Bonds and a benchmark yield curve
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Domestic bonds
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International bonds
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Euro and global offerings
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Interest Rate calculations
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The participants and the processes
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Issuers and Investors
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Origination, sales and trading
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Primary and Secondary Markets activity
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Securitization
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Regulation of the market, and trade bodies
The Equity Markets
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Equity Markets, London, New York, Europe and Tokyo
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Listing requirements and Authority
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Why are shares issued, and who can issue?
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How they are priced and sold - placings, offers for sale, tenders
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Who are the investors in equity, and what is the process of trading and
settlement
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Secondary market trading and market making
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Equity/Bond Hybrids
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Preference shares and their characteristics
Group Discussion - Management of Risk
Credit Ratings
Risk Management
Regulatory Environment
Basel capital adequacy impacts
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