5653572
Description
Mind Map by Jules Landrieu, updated more than 1 year ago
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Created by Jules Landrieu
almost 8 years ago
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Financial Markets
- financial innovation
- securities lending
- Hedge Funds
- AIFMD
- non-UCITS funds
- UCITS fund: allow
small investor to have
access to the market
- collective investment
schemes
- collective investment
schemes
- UCITS fund: allow
small investor to have
access to the market
- non-UCITS funds
- don't own what they sell
- uses short-selling: more efficient
markets and resolve mispricing
- AIFMD
- crisis: HF borrower short-selling
- defaulted + value of the collateral
did not cover the losses
- domino effect
- domino effect
- help market to operate
more efficiently
- HF can help
resolve mispricing
- lender always has the
right of ownership
- lending fee
- lending fee
- HF can help
resolve mispricing
- defaulted + value of the collateral
did not cover the losses
- Hedge Funds
- reduc. costs
- better allocation of risk
- improve access for consumers
- better choice & decisions
- response to unmet need for consumers
- more efficient allocation of resources
- FSUG
- FSUG
- more efficient allocation of resources
- response to unmet need for consumers
- better choice & decisions
- improve access for consumers
- better allocation of risk
- securitization: allows for unitization
- offload bad loans
from balance sheet
- Credit Risk Diversification
- SPVs
- information asymetry
- loans with misprice risks
- skin in the game
- alignment of interest between
the arrangers and investors
(at least 5% of the asset pool)
- alignment of interest between
the arrangers and investors
(at least 5% of the asset pool)
- skin in the game
- loans with misprice risks
- information asymetry
- SPVs
- Credit Risk Diversification
- (concentrating on a very small
scale economics exposure
- accessible to individual small investors
- accessible to individual small investors
- offload bad loans
from balance sheet
- derivatives
- hedge risk
- insuring against price movements
- insuring against price movements
- speculate on
fin. market
- option to sell/buy
at a special time
- option to sell/buy
at a special time
- OTC: systemic
- modified exposure
- ETF: Exchange-Traded Fund
- transparent
- liquid
- increases
volatility
- transparent
- hedge risk
- securities lending
- 60% of cross-border capital flows have fallen
- trends
- financial globalisation
- rise of market-based finance
- financial innovation
(product & techniques)
- high frequency trading
- lower transaction costs
- destabilize economy
- lower transaction costs
- democratisation of finance
- fin. repression & re-regulation of fin.
- financial globalisation
- measure
integration
- cost of capital should be
the same across EU
- price convergence
among the states
- volume of cross
border flows
- no more trading costs
- cost of capital should be
the same across EU
- bank balance
sheet
- assets
- loans
- reserves
- Core tier 1:
7.5% & 10%
- Core tier 1:
7.5% & 10%
- loans
- liabilities
- deposits
- loans from
other banks
- capital
- issue equity
& bonds
- EONIA
- EONIA
- issue equity
& bonds
- deposits
- unfunded
liabilities
- + asset side
- - liability side
- + asset side
- excess liquidity
- overvaluation
of stocks
- overvaluation
of stocks
- assets
- 3 kinds of loans
- Good (default >10%)
- Medium (10%-30%)
- Bad (<30%)
- Good (default >10%)
- Branch vs subsidiary
- subsidiary: separately capitalized.
Regulated by Host MS
- Host: determines capital req. +
decision of lender of last resort
- Host: determines capital req. +
decision of lender of last resort
- branch: regulated by Home MS
- subsidiary: separately capitalized.
Regulated by Host MS
- Global
ageing
- a need to invest in fin. markets to get
the money that we need for
retirement
- a need to invest in fin. markets to get
the money that we need for
retirement
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