TFM Session 1

8/21/2019 TFM Session 1

http://slidepdf.com/reader/full/tfm-session-1 1/20

Session 1



The Economic Cycle

Lenders Financial

Intermediaries

Financial

Markets

Borrowers

Individuals

Companies

Banks

Asset Management

Companies

Real Estate Agents

Stock Exchange

Money Market

Bond Market

Real Estate

Individuals

Companies

Government

PublicCorporations

Lending Cycle

Return Cycle

2Saturday, August 02,2014



Financial MarketsFinancial Market

(For Trading Financial Securities)

Capital Market(For Raising Capital)

Derivative Market(For Transfer of Risk)

Currency Market(For International Trade)

Equity Market(Issuance of Shares) Debt Market(Lending Borrowing)

Money Market(Short term Borrowing)

Bond Market(Long term Borrowing)

Saturday, August 02, 2014 3



Introduction and Overview What is Treasury?

Evolution of Treasury function- the history

How concept of treasury evolved, its significance Types and Structure of Markets

- Financial

- Capital

- Primary

- Secondary



Treasury operations (or treasury management)includes management of an enterprise’s holdings inand trading in government and corporate bonds,currencies, and derivatives, and the associatedfinancial risk management

Treasury Operations




Involve Asset/liability Management

Forecasting Net Interest Income

Measuring Interest Rate Risk Managing Bank Reserve

Risk Capital Requirement

Manage Liquidity

Borrow at Lesser Rate & Lend at Higher Rate

Treasury Department Function




Role of Treasury In Organizations

Cash Management

Profit Making/Revenue Generation

Financial Risk Management Funding and Capital Market

Corporate Governance

Financial Risk Management



Challenges Economic Downturn

Changes in Economies

Risk Expectation of Organization

Countries Risk/Rating

Currencies Risk

Interest rate risk



Role of Treasurer To achieve the goal of the organization to maximize

shareholder’s wealth

General Financial Oversight Funding and Fund Raising

Financial Planning and Budgeting

Banking, Book keeping and Record-Keeping

Reserve Maintenance



Over view of Financial System 1. Function of Financial Markets and Financial

Intermediaries

2. Structure of Financial Markets

Debt and Equity Markets

Primary and Secondary Markets

Exchanges and Over-the-Counter Markets

Money and Capital Markets 3. Financial Instruments

Money Market Instruments

Capital Market Instruments



Cont’d 4. Role of Financial Intermediaries

Transaction Costs and Economies of Scale

Risk Sharing and Diversification Adverse Selection and Moral Hazard

5. Types of Financial Intermediaries

Depository Institutions (Banks)

Contractual Savings Institutions

Investment Intermediaries and Diversification



Classification of Financial Markets Financial Markets

Money Markets

Debt Markets Equity Markets

Forex Markets

Derivates



What is the Goal of an Organization Stock holder’s wealth safe guard and maximization

Profit Maximization

Efficient use of Resources Enhancing the company’s image



Brief of Financial Instruments Involve monetary Value

Short Term/Long Term

Types of Capital Markets



Treasuries performance Subprime Crisis

Rules and regulations

Develop new products



1. FRONT OFFICE

2. MIDDLE OFFICE

3. BACK OFFICE

IMPORTANT AREAS OF TREASURY

RELATED ACTIVITIES




Take investment decision Placement

Buying & selling currencies

Hedging

Speculating

Arbitraging

Managing cash flows


FRONT OFFICE FUNCTIONS



Risk management

Rating counter parties

Restriction on dealers Restriction on counterparties


MIDDLE OFFICE FUNCTIONS



Input (mostly checking only)

Verification

Confirmation Settlement

Reconciliation


BACK CORE OFFICE FUNTION



Thank you

TFM Session 1

Documents

Transcript of TFM Session 1