The Bank Analyst's Handbook: Money, Risk and Conjuring Tricks

The Bank Analyst's Handbook: Money, Risk and Conjuring Tricks

Stephen M. Frost

Language: English

Pages: 572


Format: PDF / Kindle (mobi) / ePub

It is not uncommon to meet professionals in financial services who have only a vague idea of what their colleagues actually do. The root cause is specialization and the subsequent development of jargon that makes communication between common specialists faster and more precise but is virtually impenetrable to everybody else.

The Bank Analyst’s Handbook provides a modern introduction to financial markets and intermediation. Individual subject areas are covered in a thorough but clear and succinct manner. The breadth of the author’s experience as a sell-side bank analyst is exploited to good effect to pull together these threads and create a coherent framework for the analysis of financial markets, whether these are in advanced economies or developing markets.

The Handbook is well-written and highly accessible. It builds on orthodox financial theory (with all of its flaws and controversies) but also highlights many of the real problems involved with translating such theory into practice. It can be appreciated at many different levels and this explains its wide target readership. The Bank Analyst’s Handbook:

  • Bridges the gap between the more superficial introductory books and specialist works
  • Covers all the important functions and subjects related to the financial services industry
  • Provides a comprehensive overview for financial services professionals, business school students, consultants, accountants, auditors and legal practitioners, analysts and fund-managers and corporate managers.

"An excellent guide for any professionals who are coming into the banking industry. Extremely well-written, covering clearly and lucidly a range of topics which many bankers themselves don't understand. I will make this book mandatory reading - no, make that studying - for anybody I hire to work as a financial sector consultant."
—Chris Matten, Executive Director, PricewaterhouseCoopers

"A great insight into the often murky and impenetrable world of banking... compulsory reading for analysts and investors alike."
—Hugh Young, Managing Director, Aberdeen Asset Management Asia Ltd











exercise their powers to approve senior management and board level appointments to ensure that management control remains in local hands whatever the ownership structure. Restrictions on foreign banks’ operations. They also often try to restrict the market share of foreign banks. Measures include limits on the total number of banking licenses given to foreign banks. This often prevents the entry of new foreign banks. Other restrictions that are often imposed concern the sorts of businesses they

the dates when interest payments and principal repayments are due. It will also contain a detailed breakdown of any fees to be paid and penalties that the bank may charge for minor transgressions such as late or missed payments. For secured loans it will also include details of the collateral being pledged by the borrower. Most agreements also contain clauses indemnifying the bank against potential liabilities arising from specified events. If the loan is a floating rate loan the loan agreement

If a borrower defaults on a property with significant levels of negative equity they are likely to face bankruptcy proceedings. In addition to the stress and loss of assets that such proceedings bring they are also likely to make it impossible for the borrower to ever own their own property. 114 Mortgage Lending Exhibit: The residential property market trap Property markets are at their most dangerous after they have enjoyed a strong run for many years. First time buyers start to panic as the

the lawyer. In the US there is a body of legislation intended to protect consumers from discrimination by prohibiting banks from making credit decisions on a number of grounds including race, gender 122 Credit Cards and Other Retail Loans and location. This is the exception rather than the rule. In most countries banks make such decisions with few legislative constraints. CREDIT CARD FRAUD Credit card fraud is a serious problem in many countries. The problems are most acute at smaller

notional principal is much lower than that of domestic currency interest rate swaps. 157 The Bank Analyst’s Handbook PRACTICAL LIMITS AND RISKS There are practical limits on how far forward it is possible to hedge a foreign exchange exposure using forwards, futures or swaps. Banks do not usually try to hedge equity positions they hold in foreign subsidiaries where the position is effectively perpetual. This limit also depends on the depth and liquidity of the currency markets. For major

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