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PC NARAYAN: Banking and financial markets
encompass an ecosystem that channelizes money
from those who have it-- that is, the savers and investors,
to those who need it-- that is the borrowers.
Banks and financial markets also facilitate cross-border flow of funds
through exchange of currencies.
That ecosystem of banking and financial markets,
including central banks and regulators, has deepened in size, sophistication,
and complexity over the years.
However, they have also been the subject of abuse, failures,
and economic distress in several countries,
with the contagion effect that has concurrently affected
several countries around the world.
Hello.
My name is PC Narayan.
I have been with the Indian Institute of Management, Bangalore
for the last 30 years, engaged in teaching, research,
and consulting, primarily in the area of banking and finance.
In an earlier overview course, I had dealt with the theories and concepts
underlying banking and financial market, the products and instruments offered
by banks and financial markets, and the associated market mechanisms.
In this more advanced course, we will look at banking and financial markets
from a risk management perspective-- the embedded risks
in any financial system, credit risk, interest rate risk, foreign exchange
risk, operational risk, off-balance sheet risk, and so on--
how they are identified, how they are measured, and how they are managed.
We will also look at issues of liquidity and solvency in any financial system,
and how they are anticipated and managed.
And then we will look at asset securitisation, credit default swaps,
and several other structured products, such as Collateralized Debt
Obligations, and how the uncontrolled proliferation
of these structured products resulted in a massive asset
bubble that eventually resulted in the global financial crisis and meltdown
of 2008.
And finally, we will look at the changing role of regulators
and the monetary authority in every country,
as well as the crucial role of economic capital in safeguarding the stability
and longevity of any financial system.
So join me in this exciting journey to unravel the embedded risks in banking
and financial markets that causes the consequences and the ramifications
of these risks, and how they are measured, mitigated, and managed.
And of course, we will also examine what is a probability
that a crisis, such as the one we witnessed in 2008, will arise again,
can it be averted, or at least managed better.
I look forward to seeing you in the course.
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