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
Public
Corporations
Lending Cycle
Return Cycle
2
Saturday, August 02,
2014
Financial Markets
Financial 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)
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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 enterprises holdings in
and trading in government and corporate bonds,
currencies, and derivatives, and the associated
financial risk management
Treasury Operations
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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
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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
shareholders 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
Contd
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 holders wealth safe guard and maximization
Profit Maximization
Efficient use of Resources
Enhancing the companys 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
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Take investment decision
Placement
Buying & selling currencies
Hedging
Speculating
Arbitraging
Managing cash flows
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FRONT OFFICE FUNCTIONS
Risk management
Rating counter parties
Restriction on dealers
Restriction on counterparties

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MIDDLE OFFICE FUNCTIONS
Input (mostly checking only)
Verification
Confirmation
Settlement
Reconciliation

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BACK CORE OFFICE FUNTION

Thank you