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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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