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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