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Risk and Products of the Treasury Function

Participants will gain an overview of the capital and treasury markets globally and within the City of London especially. They will also obtain an understanding of the market players and their imperatives, a familiarity with the major product types and their uses and a level of comfort with financial terminology and jargon. The course will also cover credit derivatives in a reasonable degree of depth, and participants will gain an appreciation of the risks transferred by these products (and the residual risks that are not). In addition, delegates will appreciate the uses of credit derivatives for corporate financing structures and the circumstances in which they might be utilised for hedging risk, both from a client standpoint and from that of the corporate banker. From the risk management area they will also become comfortable with the need for, and the techniques of, risk identification and quantification, including understanding. the various roles of management, front office, middle office & support within an organisation’s treasury. They should also be conversant with the concepts of control that are used to contain treasury risk within the parameters defined by the organisation.

Course Content

Treasury Products
 Overview of the financial markets
 Short term money market
 Bond markets
 Bond variations in overview
 Introduction to equity
 Treasury products - foreign exchange
 Derivative instruments

Credit Derivatives
 The concept of credit derivatives
 Credit derivative structures
 Default swap
 Credit linked note
 Total return swap
 Spread future
 Spread option
 Cross guarantee (default swap combo).
 Other structures
 Practical issues

Risk Management
 Risk management defined
 Aspects of risk
 Concepts of control
 Defining the strategy
 Setting limits
 Interest rate exposure analysis
 Foreign exchange exposure analysis

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