Part I
A Primer on Banking
Part I is a primer on banking, and sets the scene for newcomers, be they students or practitioners. It is essential to be familiar with the nature of banking business, as well as the types of instruments used in money market trading. We also need to be familiar with banking capital and financial statements, the former preparatory to a discussion on regulatory capital and the Basel rules, the latter simply for general knowledge purposes. So the first part of this book covers these areas.
We begin with a look at the fundamentals of banking business, and the different elements of bank capital. We also look at financial ratio analysis, used when reviewing metrics such as return on capital.
The remainder of Part I looks at regulatory capital, credit risk and credit limits, the use of securitisation and the yield curve.
