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Business Knowledge for IT in Investment Banking: A Complete Handbook for IT Professionals

Book Description

IT professionals need business knowledge in today's fast-paced financial landscape to deploy and maintain business-critical systems. This book gives the IT professional an insight into the business world of investment banking. It contains 12 chapters that cover: a description of business divisions for full-service and boutique investment banks; trends in investment banking; overview of the asset classes; the trading life cycle and how it maps to the software development life cycle; an overview of the systems from notable vendors that are used for trading, risk management and compliance; a description of the major players in the industry; and skills demanded by employers.

Table of Contents

  1. Copyright
  2. Preface
  3. Acknowledgements
  4. Introduction
    1. Why is business knowledge of investment banking important?
  5. 1. Overview of Investment Banking
    1. Introduction
    2. Definition of Investment Bank
    3. Role of modern Investment Banks
    4. Raising Capital in the Capital Markets
    5. The main Activities and Units
      1. Front Office
      2. Middle Office
      3. Back Office
    6. Recent Evolution of the Business
      1. Possible Conflicts of Interest
    7. Boutique Investment Banks
      1. What is a Boutique Investment Bank?
      2. Overview of Boutique Investment Banking
    8. List of some Investment Banks
  6. 2. Asset Classes in Investment Banking
    1. Introduction
      1. What is an Asset Class?
    2. Foreign Exchange
      1. Common Foreign Exchange Instruments
      2. Foreign Exchange Market Size and Liquidity
      3. Trading Characteristics
      4. Market Participants
    3. Fixed Income
      1. Bonds
      2. Trading Characteristics
      3. Market Size
      4. Issuers
      5. Issuing Bonds
      6. Features of Bonds
      7. Types of Bonds
      8. Money Markets Instruments
      9. Common Money Markets Instruments
    4. Commodities
      1. Definition of Commodities
      2. What is a Commodity Exchange?
      3. Commonly Traded Commodity Instruments
        1. Energy
    5. Equities
      1. Definition
      2. Types of Shares
      3. The Equity Market
      4. Trading Activities
      5. Market Size
      6. Equity Derivatives
    6. Indices
      1. What are Indices?
      2. FTSE
      3. Major World Stock Market Indexes
      4. MSCI Europe Index
      5. MSCI Emerging Markets Index
      6. iTraxx
    7. Security Identifier Types
      1. Definition
      2. ISIN
      3. CUSIP
      4. RIC
  7. 3. The Business Environment in Investment Banking
    1. Introduction
      1. Trade Balance
      2. Interest Rates
      3. Inflation and Money Supply
      4. Government Fiscal Policy
      5. Exchange Rates
      6. Stock Market
      7. Use of Technology
    2. Players in Investment Banking
      1. Exchanges and Government Central Banks
        1. London Stock Exchange
        2. European Central Bank
      2. The Competitors
    3. Overview of the Major Players in Investment Banking
      1. Morgan Stanley
      2. Goldman Sachs
      3. Merrill Lynch
      4. JP Morgan Chase
      5. Investment Bank Ranking
    4. Allied Organisations
      1. The Regulators
        1. Financial Services Authority
        2. Bank for International Settlements
        3. ECNs
    5. The Credit Rating Agencies
      1. Uses of Credit Rating Agencies
      2. Moody’s
      3. Moody’s Ratings
      4. Special
      5. Short-term Ratings
      6. Standard and Poor’s
      7. Long-term Credit Ratings
      8. Non-Investment Grade (also known as junk bonds)
      9. Credit ratings
    6. News Agencies and Market Data Providers
      1. What are News Agencies?
      2. Reuters
      3. Bloomberg
      4. Thomson Financial
      5. CQG
      6. The Financial Times
      7. Morgan Stanley Capital International (MSCI)
      8. FISD
    7. Clearing Houses
      1. What is a Clearing House?
      2. London Clearing House
    8. Settlement Banks
      1. What is a Settlement Bank?
      2. Euroclear
      3. Clearstream
  8. 4. Trends in Investment Banking
    1. Introduction
    2. Sarbanes Oxley Act of 2002
    3. Basel 2 Accord
      1. The Future
    4. AML/KYC
    5. Straight-through Processing
    6. Continuous Linked Settlement (CLS)
    7. Growth of Credit Derivatives Market
      1. Introduction
      2. Definition of Credit Derivatives
      3. Types of Credit Derivatives
      4. Market Size
    8. Growth of New Hedge Funds
      1. Definition of a Hedge Fund
      2. Hedge Fund Market
      3. Characteristics of “New” Hedge Funds
      4. Hedge Funds Investment Styles
      5. Categories of Hedge Fund Investor
      6. Structure of a typical Hedge Fund
    9. Growth of the Prime Brokerage Function
      1. Internet as a Medium for the Hedge Fund Business
    10. Growth of the Internet Investment Banks
    11. Growth of Emerging Markets Derivatives
      1. Types of Derivatives traded in Emerging Markets
        1. Currency Derivatives
        2. Fixed Income Derivatives
        3. Equity Derivatives
        4. Credit Derivatives
    12. Trading in Weather Derivatives
      1. Why Trade in Weather Derivatives?
      2. Market Size
      3. Market Players
      4. Who uses Weather Futures?
    13. Introduction of Markets in Financial Instruments Directive (MiFID)
      1. What is MiFID?
      2. Impact on Firms
      3. Key Provisions
        1. Scope
      4. Implications for IT Professionals
    14. Introduction of IAS39
    15. Popularity of Financial Spread Betting
      1. Spread Betting Markets
      2. Use of Financial Spread Bets
    16. Popularity of Contracts for Difference (CFDs)
      1. What are CFDs?
    17. Growth of Syndicated Lending
      1. What is syndicated lending?
      2. Growth of the Syndicated Loan Market
      3. Major Players in the Market
    18. Adoption of FpML
      1. Participants
  9. 5. Overview of the Generic Trading Lifecycle
    1. Introduction
      1. Definition of Trading Lifecycle
    2. Trade Capture
    3. Verification and Confirmation
    4. Settlement and Netting
    5. Reconciliation
      1. What is Nostro?
    6. Accounting
    7. Post-Trade Operations
  10. 6. Trading in Foreign Exchange
    1. Introduction
      1. What is an FX Spot Trade?
      2. Definition of Value Dates
    2. Buying and Selling Currencies
      1. FX Spot Quotation
    3. Market Terminology
      1. Decimal places on spot rates
      2. Cross-Currency Rates
    4. Lifecycle of an FX deal
      1. Scenario of the FX Spot Trade
      2. Trade Capture
      3. Confirmation
      4. Netting
      5. What is Multilateral Netting?
      6. What is Bilateral Netting?
      7. Settlement
      8. Nostro Reconciliation
      9. Accounting
      10. Problem Resolution and Investigation
      11. Management
  11. 7. Common Systems used in the Industry
    1. Introduction
    2. Selection Criteria
      1. Notable Applications used in Investment Banking
    3. Calypso
      1. The unique functions of Calypso
    4. Fidessa
    5. Openlink
      1. Endur
      2. Findur
    6. SAP for Banking
    7. GL Stream
      1. Features
    8. Reuters Kondor+
      1. Benefits
      2. Features
    9. Sophis Risque
    10. Middleware
  12. 8. Mapping of Software Development Lifecycle to the Trading Lifecycle
    1. Introduction
    2. The Development Lifecycle
    3. Trade Capture (including verification)
      1. Scenario 1: Standalone trade capture system
      2. Scenario 2: Trade capture as part of a Composite system
    4. Confirmation
    5. Settlement (including netting)
      1. Scenario 1: Standalone settlement system
      2. Scenario 2: Settlement system as part of Composite system
    6. Accounting
  13. 9. IT Project Types and Data Requirements
    1. Introduction
    2. Common Types of IT Projects
    3. Data Requirements
      1. Market Data
        1. What is Market Data?
        2. Historical Market Data
        3. Market Data Systems
        4. Direct Data Feed
        5. Market Data Definition Language
        6. What is MDDL?
      2. Reference (Static) Data
        1. Definition of reference data
        2. Other Types of Reference data
        3. Reference Data Management
    4. Information Management
      1. Definition
      2. Case Study of Information Management
      3. What is Reuters Tick Capture Engine?
      4. Pre-Trade Analysis
        1. Overview of Pre-Trade Analysis
        2. How banks use RTCE for Pre-Trade Analysis
        3. Market Trends
      5. Post-Trade Analysis
        1. How Investment Banks use RTCE for Post-Trade Analysis
        2. Market Trends
      6. Algorithmic Trading
        1. How banks use RTCE for Algorithmic Trading
        2. Market trends
      7. Quantitative analysis
        1. How banks use RTCE for Quantitative analysis
        2. Market Trends
    5. Test Data
      1. Test data management
      2. Sanitising test data
      3. Data Volumes
  14. 10. Terminology commonly used in the Investment Banking Industry
    1. Introduction
    2. List of Terms
  15. 11. Methodologies, Skills and Tools
    1. Introduction
    2. Methodologies
      1. V-Model
      2. RUP
      3. PRINCE2
      4. UML
      5. RAD
      6. Core Elements of RAD
      7. Agile
      8. Extreme Programming
      9. Pair Programming
    3. Business and Systems Analysis Methods
      1. Business rules approach
      2. Entity-relationship diagrams
      3. Prototyping
    4. Testing Methods
      1. Equivalence Partitioning
      2. Boundary Value Analysis
      3. Error Guessing
    5. Tools
      1. IBM Rational Rose
      2. IBM Rational ClearCase
      3. Mercury QTP
      4. IBM Rational ClearQuest
      5. Mercury Test Director (Quality Centre)
      6. Oracle Designer
      7. PowerDesigner
    6. Common IT Skills Required
    7. Soft Skills
  16. 12. Conclusion
    1. The Future
      1. What does it hold for investment banks in business and IT?
    2. Opportunities in new markets
    3. New strategies for regulatory compliance
    4. Frameworks for risk management
    5. New Technology
    6. Outsourcing to Cheaper Labour markets
    7. Conclusion
  17. Appendices
    1. Useful Websites
    2. Specialist Recruitment Agencies
    3. References
      1.  
  18. About Essvale Corporation
    1. IT and Business Consulting
    2. Training
    3. Our Vision
  19. About the Bizle Professional Series
  20. Introducing Bizle.biz