THE PILLARS OF BANKING
Subtitle: THE A-Z OF BANKING
Publisher: LAMBART
Published: 2008
Language: eng
Format: Hardcover
Number of pages: 920
ISBN-13: 9780620399371
Description: This book presents the pillars of banking approach to managing banks. The aims of this book are to:
• define what banking is all about;
• origin and evolution of money
• an overview of the monetary system in the USA
• banking basics
• the role of the FED
• history of inflation in the 1970s
• forms of money
• money laundering
• functions and nature of banking business
• historical developments in the South African banking Industry
• legal framework of the banking industry in South Africa
• external relations of the banking industry in South Africa
• financial intermediation in South Africa
• financial markets in South Africa
• structure of the South African Reserve Bank
• bank supervision
• merchant banks, commercial banks and others
• risk management theory
• banking products and services
• credit management
• relationship banking
• lending in the new environment
• some tried and tested lending principles
• effective interviewing for credit applications
• checklist for corporate clients
• credit risk assessment and management
• project finance risk
• derivative markets
 
• MBOs and LBOs
• securities for credit facilities
• company failures the danger signs
• a survival kit
• restructuring of ailing companies
• solvency liquidations and judicial management
• define what credit management is all about;
• define various categories of risk;
• classical world case studies
• summary and analysis of world case studies
• world class
It is hoped that the book will appeal to students at undergraduate, graduate or post experience level in business or management, or on related professional courses. It is also hoped that the book will appeal not only to those aspiring to be bank managers but also to practicing bank managers and supervisors who wish to expand their knowledge of the subject area.
The book is written with a minimum of technical terminology and statistical formulas and the format is clearly structured.
Table of contents: title: TABLE OF CONTENT; title: CHAPTER 1; title: ORIGIN AND EVOLUTION OF MONEY 1; title: Barter ● Commodity money ● Metal money ● Money objects ● Ancient Coins ● Gold, Silver and Copper ● Paper Money ● Different Shapes of Money ● Monetary System ● Cheques ● Two Kinds of Money; title: CHAPTER 2; title: AN OVERVIEW OF THE MONETARY SYSTEM OF THE UNITED STATES 6; title: The money Base ● Reserve Ratio Requirements ● Controlling the Price of Credit ● The Fed’s Reactive Role ● Limiting Bank Lending ● Limiting Money Supply Growth ● Fractional Reserve Banking ● Reserve Requirements ● How Banks Meet Reserve Requirements ● Factors Affecting Aggregate Reserves ● How the Fed Manages Reserves ● Size; title: and Composition of the Monetary Base ● Linkage Between Reserves and; title: Money Supply ● The Money Supply ● The Monetary Aggregates ● The; title: Big Picture; title: CHAPTER 3; title: BANKING BASICS 13; title: Getting Started ● Managing Loans and other Investments ●; title: Accounting Needs ● Balance Sheet and Earnings Forecasts ● Growth Management ● Required Operating Ratios ● How Transactions Affect Operating Ratios ● Bank Liquidity ● Asset Management Banking ● Liability Management Banking ● Key to Liability Management ● Bank Runs ● Possible Solutions ● Bank Capital Requirements ● Assets and Liabilities ● Capital Requirements ● Leverage Requirements ● Meeting the New Standards ● Updating the Requirements ● Bank Lending and Reserves ● Capital Adequacy Requirements ● Borrowing Reserves when Needed ● How the Fed Responds ● Issuing the Remaining Loans ● Open Markets are Continuous ● Non-Bank versus Banks ● Non-Bank Lending; title: ● Bank Lending ●; title: CHAPTER 4; title: THE ROLE OF THE FEDERAL RESERVES BANK 24; title: Reserve Management in Large Banks ● The Repo Market ● What are Repos? ● Repos are not for Small Investors ● Clearing Banks and Dealer Loans ● Matched Books in Repos ● Payments Systems ● Use of Cash ● Cheques ● Giro Payments ● Plastic Cards ● Charge Cards ● Credit Cards ● Debit Cards ● Cash Cards ● Fedwire ● CHIPS ●Automated Clearing Houses (ACHs) ● Credit Cards ● How does a credit card work in practice? ● Credit Cards Associations ● Issuers ● Acquirers ● Visa Membership ● Interest Rate on Credit Card Loans ● Foreign Exchange ● A case of Different Clearing Systems ● Use of a Forward Contract ● The Foreign Exchange Market ● Money and Credit ● The Basic Properties of Money ● IOUs as Money ● Fed Funds and Bank Money ● Non-Bank Money ● Banks as Intermediaries ● Non-Bank as Intermediaries ● Systemic Risks ● Money and Inflation ● Credit Money versus Commodity Money ● Effects Related to the Price of Credit ● Demand for Credit and its Effects ● Effects of Government Spending ●; title: CHAPTER 5; title: A CASE HISTORY - INFLATION IN THE 1970s 42; title: Money in Motion ● The Money Roundabout ● The Role of Banks   vis-à-vis Firms ● How banks Settle Accounts ● Powers of the Central Bank ● Banks are not Ordinary Intermediaries ● The Real Nature of Money ● The Myth of the Money Multiplier ● The Myth ● Managing Aggregate Reserves ● The Uses of Excess Reserves ● Commodity versus Fiat Money ● Money as a Claim on the State ● The Seigniorage Gap ● The material Value of Commodity Money ● Real versus Financial Assets ● Resolving the Accounting Dilemma ● Money in the Cashless System ● Two Types of Money ● The Key Role of Bank Deposits ● Growth of the Money Supply ● Base Money and the Treasury ● Monetizing the Gold Stock ● Options for Upgrading to Fair Market Value ● How Options Compare ● Only One Viable Option ● Saving Investment ● Individual Saving ● Effect of Increased Individual Savings ● National Saving ● National Saving Equals   Investment   ●   Foreign   Investment   ●   The   Accumulated   Debt   ● Repatriating Foreign-Owned Assets ● Seigniorage ● The Money Base Today ● The Production and Distribution of Notes ● Seigniorage from Notes ● Who is the Real Beneficiary of Seigniorage? ● Seigniorage in a cashless System ● Seigniorage fro0m Foreign Holding of Notes ● Direct and Indirect Lending ● Direct Lending ● Secondary Markets ● Indirect Lending ● Comparison of Risks; title: ● The Great Divide ● The Consol ● The Interest Time Bomb ● What the Debt Virus Thesis Implies ● What are the facts ● Why the Debt Virus Thesis Fails ● Counterfeit Money, Who Takes the Hit? ● A Counterfiet Money Scenario ● What Happens to the Excess Cash? ● The Effect of Increased Bank Reserves ● Recycling the Currency ● Where Some Go Astray ● Formulating Monetary; title: Policy ● Goals of U.S. Monetary Policy ● Tools of Monetary Policy ● Effect of lags on policy Actions ● Targeting the money supply ● Effects of financial deregulation ●  Policy indicators ●  Why real interest rates are hard to interpret; title: ● Why the unemployment rate is hard to interpret ● Other factors influencing the economy ● Open Market Operations ● Types of Transactions ● Transaction Details ● The Role of Banking System Reserves ● Adequate Reserves Do Not Imply Solvency ●  The Basic Function of Reserves  ● Other Useful Functions ● The Trend Towards  Zero Reserves ●   A  Zero  Reserve System  ●  The U.S. Dollar, A Special Case?  ● Formulating Fiscal Policy ● Financing Government Programs ● The Crowding Out Hypothesis ● Taxing Guidelines ● Monetary Policy Coordination ● Fiscal Policy and Private Sector Wealth ● The Trade Deficit ● Foreign Investment ● A Broader View ● How Foreigners Can Use Their Dollar Holdings  ● Selling Foreign-Owned Dollars ● Is the wealth of the U.S. being drained? ● Why a Collapse of the Dollar is Unlikely ● A 100 Percent Reserve System ● The Money Supply ● The Modified Role of Banks ●   Capital Formation ● Monetary Policy Options  ● Monetary Policy Implementation  ● The CB Treasury Relationship  ● Minimizing the Risk of Systemic Failure ● Potential  Advantages   ●  Transition  to  a  100  Percent  Reserve  System ●  In Defense of Private Banking ● Financial Needs of a Growing Economy ● A System without Private Banks ● Why Private Banking Makes Sense ● Another View of the Banking System ●  Some Problems with Private Banking ● The International Dollar Standard ● Bretton Woods ● How the Dollar Grew ●  The Dollar Today ● Advantages for the U.S. ● Potential Problems ● A Useful Analogy ●  Warren Buffet on Derivatives ● Personal Savings  and the Economy; title: ● Money Taxes and Government Debt ● State Money ●Bank Money versus State Money ● Recycling State Money ● Meeting Demand for State Money ● Some Benefits of Government Debt ● Managing Treasury Flow of Funds ● Treasury  Tax  and  Loan  Program ●    Widespread  Participation  in  Program ● Remit Option Depositories  ● Note Option Depositories ●   Calling for Transfers; title: ● The Hierarchy of Money ● Why a Hierarchy ● IOUs as Money ● The Hierarchy of Multi-Layered Promises ● Unique Status of Bank Promises ● Lower-Tier Promises ● Tax or Borrow? ● Implementing the Options ●   The Common  Elements  ●  Financial  Equivalence  of  Both  Options   ●  Effects  on Wealth Distribution ● Treasury Operations  ● Managing Inflationary Expectations  ● The Need for Government Spending ● Money Flows  ● How Much Spending?  ● Do Deficits Matter? ●  Debt Service  ● Government Debt versus Private Debt ● Why the Government Borrows ● Rolling Over Government Debt ● Interest Rates in Borrowing ● Government Debt as Perpetuities ● Net Financial Wealth of the Private Sector ● The Upper Limit to Government Debt ● Two Components of Money Flows ● The Vertical Component ● The Horizontal Component ● The Role of the Banking System ● Net Private Sector Savings ● Creditary Economics  ●  The  Macroeconomics  of  Credit  Money  ●  Stocks Versus Bonds ●; title: CHAPTER 6; title: MONEY 106; title: Definition of money ● Standardized coinage ● Representative money●; title: Fiat money ● Modern private digital currencies ● External links ●; title: Defining money laundering ● The rules have changed ● Smurfing? ●Privacy protects ● Parallel banking systems ● Suspicious transaction reports ● A structured 4-pronged approach ? ●; title: CHAPTER 7; title: MONEY LAUNDERING 119; title: Overview ● Layering ●; title: CHAPTER 8; title: FUNCTIONS  AND  NATURE  OF  BANKING  BUSINESS; title: 136; title: Introduction ●  Basic functions of banking ● New trends in banking●; title: Risk profile of banks ●; title: CHAPTER 9; title: HISTORICAL	DEVELOPMENTS	OF	BANKING	IN SOUTH AFRICA 141; title: Introduction ●; title: CHAPTER 10; title: LEGAL FRAMEWORK OF BANKING IN SOUTH AFRICA; title: 143; title: Background ● Current position ●; title: CHAPTER 11; title: EXTERNAL RELATIONS OF THE BANKING INDUSTRY IN SOUTH AFRICA 147; title: Banking and securities business ● Banking and insurance ● Banking industry associations ● Asset and liability structure ●; title: CHAPTER 12; title: RECENT DEVELOPMENTS AND PROSPECTS 152; title: Introduction ● Elements of the South African financial system ●; title: CHAPTER 13; title: FINANCIAL INTERMEDIATION 154; title: Surplus and deficit economic units ● The functions of financial intermediaries ● Financial intermediaries in South Africa ● Classification of financial intermediaries ● Intermediation functions ● Financial instruments (products) ●; title: CHAPTER 14; title: FINANCIAL MARKETS 161; title: General ● Primary and secondary markets ● Money and bond markets ● Spot, forward and derivatives markets ● Financial exchanges ● Other related markets; title: ● SARB ● What is financial stability? ● Rationale for a financial stability focus ● Coordinating financial stability responsibilities ● In Conclusion ● Financial Stability Review ●; title: CHAPTER 15; title: STRUCTURE OF THE SOUTH AFRICAN RESERVE BANK 169; title: Introduction ● Establishment of the South African Reserve Bank ●Initial functions of the South African Reserve Bank ● Autonomy of the South African Reserve Bank ● Current legislatory framework ● Ownership of the South African Reserve Bank ●; title: CHAPTER 16; title: INTRODUCTION TO THE SOUTH AFRICAN RESERVE BANK 172; title: Establishment of the Bank ● Who owns the Bank? ● Structure of the Bank ●; title: Autonomy of the Bank ● Mission of the Bank ● Importance of inflation targeting; title: ● The Reserve Bank's system of accommodation ● Creating a liquidity requirement ● Current functions of the Bank ● Open-market operations ● Human resources ● Functions of branches ● Why is inflation bad? ● What is inflation? ● How inflation is measured ● How to fight inflation?; title: ●  How  do  you  stop  inflation?  ●  What  triggers  price  increases?  ●; title: Exchange rates and exchange control ● What is an exchange rate? ●; title: How are exchange rates determined? ● Factors influencing exchange rates ● What is meant by exchange control? ● Why is exchange control necessary? ● When will exchange control be abolished? ●; title: CHAPTER 17; title: MANAGEMENT OF GOLD AND FOREIGN-EXCHANGE RESERVES 188; title: Introduction ● What are foreign exchange and the exchange rate? ● Why do central banks hold foreign exchange reserves? ● The desired level of reserves ● Brief overview of reserve management ●; title: CHAPTER 18; title: RESERVE MANAGEMENT IN SOUTH AFRICA 191; title: Management  of  foreign  exchange  reserves  ●  Management  of  gold reserves ● Management of foreign reserves ● Composition of gold and foreign exchange reserves ●; title: CHAPTER19; title: FACTORS LEADING TO THE FOUNDING OF THE SOUTH AFRICAN RESERVE BANK 194; title: Introduction ● Lack of uniformity in the banking system ● Bank of England ● Establishment of other central banks ● Establishment of the South African reserve bank ● Gold conference Role of custodian ● Sole issuer of banknotes ● National government debt ● Domestic versus foreign debt ● Nominal value ● Debt instruments ● In the domestic market: ● Other instruments include ● In foreign markets ● Debt management ● Ratio of gross domestic product ●; title: CHAPTER 20; title: INTEREST RATES AND HOW THEY WORK 202; title: What are interest rates? ● What determines the "price" of funds or level of interest rates? ●Types of interest rates ● Money creation ● How does the Reserve Bank influence interest rates? ● Money supply and interest rates ● Why are South African interest rates so much higher than in other countries? ●; title: CHAPTER 21; title: THE RESERVE BANK'S SYSTEM OF ACCOMMODATION 207; title: Introduction  ●  The  monetary  policy  implementation  framework  ● Creating  a  liquidity  requirement  ●  The  cash  reserve  requirement  ● Open-market operations ● Estimating the daily liquidity requirement ● Refinancing the liquidity requirement ● Main refinancing auctions ● Supplementary and final-clearing repo auctions ● Access to statutory cash reserves ● The marginal lending facility and special assistance ● Conclusion ●; title: CHAPTER 22; title: THE BANK SUPERVISION DEPARTMENT 213; title: Introduction  ●  Why  are  banks  important?  ●  Why  do  banks  need  to  be supervised? ● What are regulation and supervision? ● History of the Bank Supervision ● Bank supervisory framework ● What does the Bank Supervision Department do? ● On-site and off-site supervision ● How are foreign banks supervised? ● International standards, regional cooperation and other initiatives; title: ● What happens if a bank fails? ● What can I do if I have a problem with my bank? ● The Bank's influence on the level of interest rates ● Money and capital market operations ● Gold and foreign-exchange reserves ● Banker to the Government ● Administration of exchange control ● Provision of economic and statistical services ● Provision of liquidity to banks ● Banknotes and coin; title: ● Banker to other banks ● Settlement of interbank claims ● Bank supervision ● Internal administration ● Monetary Policy ● A new monetary policy framework ● Primary objective of monetary policy  ● Inflation  targeting  ● Specification  of  the  inflation  target  ●  Monetary policy operational procedures ● Conclusion ● The code of banking practice ● Fundamental principles ● Information available ●; title: CHAPTER 23; title: HISTORY OF THE SOUTH AFRICAN FINANCIAL INDUSTRY 247; title: Functions and nature of business ● The main functions of the Reserve Bank are ● Government’s banker ● Custodian of other bank’s cash reserves ● Clearance and settlement of interbank claims ● Custodian of foreign reserves ● Bank of rediscount and lender of last resort: ● Open- market  operations  ●  Collection  and  interpretation  of  statistics  ● Monetary and exchange rate policy: ●; title: HISTORICAL DEVELOPMENT: PART ONE ●; title: Legal framework ● External relations ● Discount houses: history,  functions and nature of business ● Custodians of the ultimate liquidity of the banking system ● Provision of short-term finance ● The making of market in financial assets: ● Assisting in the execution of monetary policy: ●; title: HISTORICAL DEVELOPMENT: PART 2●; title: External structure ●; title: CHAPTER 24; title: MERCHANT BANKS: HISTORY, FUNCTIONS AND NATURE OF BUSINESS 257; title: Introduction ● Raising Finance ● Corporate advice ● Portfolio management advice ● Historical development ● External structure ●; title: CHAPTER 25; title: COMMERCIAL BANKS:  HISTORY, FUNCTIONS AND NATURE OF BUSINESS 264; title: Introduction ● Historical development ● External structure ●; title: CHAPTER 26; title: GENERAL BANKS: HISTORY, FUNCTIONS AND NATURE OF BUSINESS 268; title: Introduction ● Historical development ● Confirming houses: history, functions and  nature  of  business  ●    Historical  development  ●    External  structure  ● Factoring houses: history, functions and nature of business ● The service facility ● The financial facility ● Historical development ●; title: CHAPTER 27; title: RISK MANAGEMENT THEORY 276; title: Defining a risk manager ● Definition of risk management ●; title: CHAPTER 28; title: DIFFERENT TYPES OF RISK 280; title: Counterpart Risk ● Country Risk ● Credit Risk ● Limitations of credit risk management ● Mitigating volatility ● Currency Risk ● Electronic Funds Transfer Risk ● Operational risk ● Data risk ● Software and systems risks ● Legal aspects ● Payments risk ● Enterprise-Wide Risk Management ● Industrial Risk ● Financial  leverage risk ● Interest Rate Risk ● Liquidity Risk ● Management Risk  ● Money Laundering risk ● Stages of Money Laundering ● Operational Risk ● Project Management Risk ● Strategic Risk ● Generic risks  ● Liquidity Risk ● Market Risk ● Fraud risk ● Value at Risk (VaR) ● Currency Risk ● Technology Risk ● Capital Adequacy Risk● Legal Risk ● Reputation Risk ● Cross boarder risks ● Transfer Risk ● Revenue Risk ● Transportation /delivery Risk ● Political Risk ● Socio-Political Risk ● Economic Policy Risk ● Economic Structure Risk ● Sovereign Debt Risk ● Country Risk ● HIV/Aids Risk ● Environmental Risk ● Regulatory and Compliance Risk ● Systematic Risk ● Risk and Return ●; title: CHAPTER 29; title: CREDIT MANAGEMENT IN THE BANKING INDUSTRY; title: 315; title: Introduction ● The function and application of credit management ● How might the knowledge and skill of credit management be acquired? ● Training ● Management development ● What background is needed? ●; title: CHAPTER 30; title: BANKING PRODUCTS AND SERVICES 320; title: Introduction ● Target markets and the packages banks offer ● Basic products ● Accounts to attract depositors ● Current accounts ● Savings accounts ● Call Deposits ● Notice Deposits ● Fixed Deposits ● Unit Trusts ● Advances to borrowers ● Overdraft facilities ● Credit cards ● Garage Cards ● Home Loans ● Term Loans ● Instalment credit ● Leasing; title: ● Specialist Loans ● Bankers Acceptance (BA) ● Bills Discounted ●; title: Project Finance ● Factoring ● Guarantees ● Letters of Credit ● Other products Assurance ● Different types of Assurance ● Travel Services ● Travellers cheques ● Foreign Currency ● Bank Reports ● Stop Orders ● Purchase and Sale of securities ● Safe Custody ● Assay ● Estate and trust planning ● Drafting the will ● Liquidation of Deceased Estates ● Administration of Trusts ● Electronic banking products and services ● Automated Telling Machines (ATM's) ● Home Banking ● Bank-by-phone; title: ● Beltel ● Commercial banking products ● Cheque Writing Service ●; title: Electronic Account Payments ● Electronic Funds Transfers ● ACB Magtape Service ● Payroll service ● Cash Management ● Statement Details ● Conclusion ●; title: CHAPTER 31; title: THE RELATIONSHIP BETWEEN THE ACCOUNT MANAGERS AND THE CONTROLLING OFFICE 339; title: Introduction ● What can cause problems in the relationship? ● Up the line ● Following the account manager’s line ● There can be too much control! ● Control at ‘coal face’ level ● What can we do to improve it? ● The control manager ●; title: CHAPTER 32; title: RELATIONSHIP BANKING 346; title: Introduction ●; title: CHAPTER 33; title: BANK LENDING IN A NEW ENVIRONMENT 349; title: Introduction ●; title: CHAPTER 34; title: SOME TRIED AND TESTED LENDING PRINCIPLES; title: 353; title: Obsolete or timeless? ●; title: CHAPTER 35; title: INTERVIEWING 356; title: How  to  develop  your  technique  ●  Preparation  ●  Listening,  asking, summarizing ● Coming to the decision ● What can go wrong ●; title: CHAPTER 36; title: EFFECTIVE	INTERVIEWING	FOR	CREDIT APPLICATIONS 361; title: Introduction ● Business review ● Cause of the borrowing need ● Management review ● Financial data ● Annual financial statements ● Collecting data for cash flow analysis ●; title: CHAPTER 37; title: CHECKLIST FOR CORPORATE CUSTOMERS 366; title: Customers ● History of Business ● Ownership ● Corporate Objectives ● Management ● Labour Resources ● Premises ● Plant and machinery ● Financial resources ● Products and markets ● Purchasing ● Costing ● Pricing ● Working capital management ● Debtor control ● Information systems ●Management reports ● Profit budgets ● Cash forecasts ● Bookkeeping systems ●; title: CHAPTER 38; title: THE CRITERIA BANKS USE TO ASSESS ADVANCES; title: 372; title: Introduction  ●  Growth  potential  ●  I  will  look  closely  at  management  ●  Four questions ● Financial ratios ● Gearing ● Interest cover ● Cash flow ● Dividend policy ● Security ●; title: CHAPTER 39; title: CREDIT RISK ASSESSMENT AND MANAGEMENT 385; title: Personal sector ● Business sector ● Character ● Capital ● Capacity ● Conditions ● Consequences ● Collateral ● Cashflow ● Current information ● Computerisation ● Inflation, taxation and interest rates ● Off-balance sheet funding ● Foreign exchange rates ● Foreign sector – sovereign risk ●; title: CHAPTER 40; title: CREDIT RISK MANAGEMENT: WHAT IS IT? 401; title: Introduction  ●  Historical   development  ●  Relationship  with  other financial risks ● Assessment of credit risk ● Credit risk assessment in the personal sector ● Character of the individual ● Capital ● Capacity ● Conditions ● Collateral ● Credit risk assessment in the corporate sector; title: ● Sectoral research ● Balance sheet and income statement spread sheet; title: ● The asset structure ● The funding structure  ● The solvency and liquidity structure ●  The profitability structure ● The trading activity structure ● Composition and distribution of profits ● Stock market analysis ● Cash flow projection ● Management Credit risk assessment in the foreign sector ● Managing the risk ● Conclusion ●; title: CHAPTER 41; title: PROJECT FINANCE RISK 418; title: Introduction ● Risk sharing ● Capital structure effect ● Flexible debt service ● Nature of guarantees ● Off balance sheet treatment of debt ● An overview of project risks ● Raw material supplies ● Risk rating ● Forms of finance used in project financing ● Common forms of guarantees used in project financing ● Completion guarantees ● Deficiency guarantees ● Direct guarantees ● Indirect guarantees ● Limited guarantees ●Contingent guarantees ● Take-Or-Pay Contracts ● Implied guarantees ● Financial adviser would ●; title: CHAPTER 42; title: THE ASSESSMENT OF CREDIT RISK: A BANKER’S VIEW 427; title: Introduction ● Bank Competition ● Financial position of the borrower ● Economic and business cycles ● Competition ● Sources of other credit facilities being used by the client ● Management ● Background ● Financial Information ● Needs ● Security ● Income ●; title: CHAPTER 43; title: SOME GENERAL OBSERVATIONS 432; title: Inflation and Taxation ● Off-balance Sheet Financing ●; title: Foreign Exchange Exposure Management ● Group Forming ● The Changing Face of Consumer Credit ● Finally and in conclusion, a word about banks and banking profits in South Africa ●; title: CHAPTER 44; title: DERIVATIVE MARKETS 436; title: Introduction  ●  Definition  of  a  derivative  ●  Over-the-counter  and exchange traded derivatives ● Exchange traded ● The derivatives market; title: ● Participants in the derivatives markets ● Brokers ● Hedgers ● Speculators ● Investors ● Arbitrageurs ● Forwards, future and futures pricing ● Forward and futures contracts ● Forward contracts ● Futures contracts ● Standard quantity ● Specified underlying asset ● Fixed delivery date ● Contract price ● Risk profile of a forward or futures contract ● Types of futures contracts ● Comparing forward prices to futures prices ● Pricing of forward and futures contracts ● The cost-of- carry pricing model ● The implied forward interest rate pricing model ● Valuing forward and future contracts ● Hedging of risks ● Explanatory notes and definitions ● Instruments for hedging adverse interest rate movements ● Interest rate swaps ● Caps and collars ●; title: Instrument for hedging adverse exchange rate  movement ● Forward; title: cover  ●  Currency  futures  ●  Currency  options  ●  Currency  swaps  ●; title: Evaluation of hedging possibilities ●; title: CHAPTER 45; title: WHY BANKERS MUST SOMETIMES SAY NO 460; title: Is competition pressuring Banks to make loans at any cost? ●; title: CHAPTER 46; title: LENDING AND THE PORSCHE SYNDROME 464; title: Apparent affluence ●; title: CHAPTER 47; title: MBO’S and LBO’S 466; title: KEY	ELEMENTS	●	Advantages	●	Disadvantages	●	THE	CLOSE CORPORATION ROUTE ●; title: CHAPTER 48; title: MBO’s HOW TO BORROW THE MONEY! 477; title: Financiers ●; title: CHAPTER 49; title: TURN THE TABLES ON YOUR BANK MANAGER 482; title: CHAPTER 50; title: THE LENDING CONTROL FUNCTION IN THE BANK; title: 485; title: The environment in which we operate ● Main responsibilities ● The general approach to individual propositions ● The need for information ● Ratios and other formal appraisal techniques ● The lending control function and the account manager ●; title: CHAPTER 51; title: HOW TO GET THE BEST OUT OF ANNUAL FINANCIAL STATEMENTS 492; title: Are the accounts reliable at face value? ● What does the company do? ● Who owns the company? ● Who runs the company and how is it organised? ● How big is the company and how fast is it growing? ●How Profitable is the company? ● How well equipped is the company to meet its liabilities as they fall due? ● Is the company excessively dependent upon external finance? ● What is likely to happen to the company in the future ● Are there any unusual features in the accounts which suggest a particular need for action? ● Conclusion ●; title: CHAPTER 52; title: THE LIMITATIONS OF FINANCIAL STATEMENTS 497; title: The need for forecast accounts ● Cost and value ● Break-up values ●; title: Subjective judgment ● Undisclosed assets ● Conclusion ●; title: CHAPTER 53; title: ANNUAL FINANCIAL STATEMENTS:  A QUICK ANALYSIS 502; title: Current ratio ● Debt/equity ratio   ● Npbt/sales margin ● Debtor; title: days outstanding ● Stock days of sales ● Creditors days outstanding; title: ●; title: CHAPTER 54; title: GROUP ACCOUNTS 509; title: Some guide-lines for applications and reviews ●; title: CHAPTER 55; title: BUDGETING AND CASH FLOW FORECASTING 514; title: Objectives of budgetary control ● The business planning and control cycle ● Principal reasons for variance from plan ●  The establishment and monitoring of key areas ● Limiting factors ● Some of the benefits of budgeting ● Helps make higher profits more safely ● How much profit? ● Types of budget ● Operating budget ● Overheads budget ● Capital expenditure budget ● Cash budget (or forecast ● Master budget ● Preparation of budgets ● Aids to sales forecasting ● Questioning assumptions ● General ● Sales ● Materials ● Labour ● Expenses ● Capital expenditure ● Other ● Cash flow forecasts ● Budgets and the banker● Above all – question the underlying assumptions ● Financial forecasting and the credit decision ● Key questions regarding financial forecasts ● Why ask for one?; title: ● What do you do once you get it?   ● What confidence can you have in a forecast? ● A sensitivity analysis ● Multiple-forecast approach ● Confidence factors in forecasting ● Knowledge and experience of forecaster ● Key variables; title: ● The time-frame ● Assumptions ● Conclusion ●; title: CHAPTER 56; title: CASH FLOWS 531; title: 5 fold test ● The importance of cash flow measuring ● You run out of cash before you run out of assets! ● Today the question in our minds should be ● Key problems areas ● There are some other factors which come into play ● Where does the answer lie ● Facts to bear in mind ● Decisions to be taken ●; title: CHAPTER 57; title: WORKING CAPITAL MANAGEMENT 1   535; title: What is working capital ● Why manage ● The ideal level of working capital ● Cost of liquidity vs cost of illiquidity ● Cash or overdraft ● Accounts receivable and accounts payable ● Stock ●; title: CHAPTER 58; title: WORKING CAPITAL MANAGEMENT 2    542; title: Credit control ● Awareness of the significance of debtors ● Assessing creditworthiness ● Collection methods  ●  Chasing  slow  payers  ●  Possible suggestions ●; title: CHAPTER 59; title: WORKING CAPITAL MANAGEMENT 3   546; title: Stock and its implications for the lending banker ● Kinds of stock ●; title: The main costs of holding stock are ● Conflict of objectives ● Stock; title: ordering costs ● Economic order quantities ● The 80/20 rule ● Evidence of problems ● Our interpretation of reported figures ● Valuing material issues ● Costs included in stock valuations ● Lending banker’s attitude to stock control ●; title: CHAPTER 60; title: MANAGING ACCOUNTING        551; title: Break-even analysis – problems posed by the real world ● Planning, decision-making and control break-even analysis ● Two break-even points ● Multi-product firms ●; title: CHAPTER 61; title: OVERTRADING          555; title: Introduction ● Checklist ● Advances featuring overtrading ● A typical proposition ● Comment ● Cautionary case study ● Comment ● The timing of profit ● Accounting principles ● Manipulation of financial statements ● The auditors ● Common methods of “adjustment” ● Some; title: methods  of  detecting  manipulation  ●  The  chairman’s  statements, director’s report ●; title: CHAPTER 62; title: CREATIVE ACCOUNTING	561; title: CHAPTER 63; title: DECISION STRATEGY	563; title: Overview  ●  Definition  of  decision  strategy  ●  Part  i:    facility purpose analysis ●  Part ii: repayment source analysis ● Part iii: structure  of  the  facility  ●  Credit  hurdles  ●  Facility  purpose analysis  ●  Repayment  source  analysis  ●  Facility  structure  ● Facility request review ● Banking   policy ● Borrowing cause ● Term ● Summary ● Repayment source analysis ● Business review; title: ● Management review ● Analysis of financial statements ● Cash; title: flow analysis ● Summary and recommendation ● Part iii: facility structure ● Negotiation ● Approval, documentation, and reporting; title: ● Facility rejection and prospect analysis ● Summary ●; title: CHAPTER 64; title: A BANKER’S VIEW ON CREDIT RISK    572; title: Causes for illiquidity ●; title: CHAPTER 65; title: SECURITIES FOR CREDIT FACILITIES    578; title: Suretyship ● The liability of the surety ● The rights of the surety ● The continuing of the surety ● Cession: ● Restrictions on cession ● There are two views ● Mortgage ● Express mortgages ● Tacit mortgages ●Pledge ● Constructive delivery ● Unconventional security ● Letters of comfort, awareness, intent, etc ● Negative pledge ● Subordination/backranking ● Preference shares ●; title: CHAPTER 66; title: COMPANY FAILURES – THE DANGER SIGNS 586; title: Introduction ● There are ten commandments in management the neglect of which may lead to failure ● Interim conclusions ● Three trajectories ● Prevention and cure ●; title: CHAPTER 67; title: A SURVIVAL KIT      594; title: Sign-posts along the road: to insolvency ● When do you commission an investigation ● Ratios are good indicators ● What are the warning signs ● What are your courses of action ● The question to ask ● How effective is the management ● Overtrading ● Management information ● Business risks ● Conclusion ● Some frivolous danger signs of impending insolvency ● Some other (ir)relevent and irrelevent thoughts ●; title: CHAPTER 68; title: RESTRUCTURING AILING COMPANIES   602; title: Introduction ● How to diagnose trouble ● Signs relating to a company's financial performance ● Signs connected with a company's operational performance include ● Signs associated with poor utilisation of assets include ●; title: CHAPTER 69; title: COMPANIES SUSCEPTIBLE TO TROUBLE  606; title: CHAPTER 70; title: BUSINESS OWNERSHIP'S RESISTANCE TO TURNAROUND SPECIALISTS       608; title: The turnaround specialist has "no heart" ● The turnaround specialist does not understand the company's corporate culture ● The company's employees have no loyalty to the turnaround specialist ●The turnaround specialist has a private agenda ● The turnaround specialist is going to; title: steal the client's ideas or techniques ● Early warning signs ● Is the owner or top management over extended ● Is the employee turnover rate excessive? ● Are communications ineffective ● Are goals unclear ● Are any key client relationships deteriorating? ● Is new business waning? ● Does the company create "products in search of markets ● Does the operation have a track record of failed expansion plans? ●; title: CHAPTER 71; title: TURNAROUND		FINANCING	FOR	FINANCIALLY	DISTRESSED COMPANIES	615; title: CHAPTER 72; title: THE RECOVERY PROCESS    619; title: Fact-finding ● Analysis of the facts ● Preparation of a business plan outlining and suggesting possible courses of action ● Implementation of the business plan ● Monitor the business plan ● Stabilisation and transition ● Leadership Requirements for Healthy vs. Troubled Companies ● Strategies for Winning Business in New Markets ●; title: CHAPTER 73; title: SETTING YOUR PRIORITIES     623; title: Know Your Customer ● Adapt Your Company ● Do What it Takes - To Bring In New Business ● Strengthen The Cash Position ● Rebuild The People Element ● Establish Leadership ● Put A Plan In Place; title: ●Communicate With ALL Stakeholders ● Charting the process of renewal ●; title: CHAPTER 74; title: THE TRANSFERABLE SKILLS SET   629; title: The Transferable Skills Set ● The value model ●; title: CHAPTER 75; title: SEVEN	WAYS	TO	BUILD	SUCCESSFUL	SELLING TEAMS  634; title: Focus ● Eliminate Excuses ● Accept the Present Situation ● Retrace and; title: Reshuffle ● Restarting the Selling Process ● Innovate ● Motivate ●; title: CHAPTER 76; title: FINANCIAL VERSUS STRATEGIC ASSISTANCE 639; title: Securities and claims trading ● Financing strategies ● Turnaround financing ● Equity investors ● Do not expect miracles overnight ●; title: CHAPTER 77; title: INSOLVENCY, LIQUIDATION and JUDICIAL MANAGEMENT 644; title: Procedure in brief ● A liquidator’s views, comments and advice ●; title: The second main cause of insolvency concerns the stupidity on behalf of the person or the director. ● The third cause concerning business failure boils down to lack of proper management. ●; title: CHAPTER 78; title: QUESTIONS AND ANSWERS IN FINANCE  654; title: CHAPTER 79; title: LIMITATIONS OF RATIO ANALYSIS      663; title: The   usefulness   of   financial   ratios   may   be   limited   ●   Financial management 2 ● Break-even analysis ● Compiling a break-even chart ● Features of a break-even chart ● Interpretation of break-even charts – examples ● Determining fixed and variable costs ● Break-even formulae; title: ● Studying cost-profit-volume relationships ● Limitations of break-even analysis ●; title: CHAPTER 80; title: COSTING AND PRICING     672; title: Introduction ● What is cost? ● What are the objectives of costing? ● Classification of costs ● Types of costing techniques ● Weaknesses in “absorption” costing systems ● As a basis for decision making ● “Standard”  costing  –  principles  ●  Advantages  of  standard  costing; title: ●Disadvantages of standard costing ●     Summary ●  Marginal” costing; title: ●Advantages of marginal costing ● Disadvantages of marginal costing ●; title: Some practical applications of marginal costing ●	Solvency		and liquidity ●	Some ratios and equations ●	Ratio		analysis	(i)		●; title: Main ratios used in financial analysis ● Solvency ratios●	Liquidity ratios ● Activity ratios ●	Profitability ratios ●General ●; title: CHAPTER 81; title: THE ROLE OF CASH ANALYSIS IN THE CREDIT DECISION	687; title: Cash flow ● Cash cover statement ● Assessment of financial strength ● Committed medium-term lendings ● How to negotiate a term loan ● Inside  the  banker’s head  ● The  making of  restrictions  ● Cash  flow control ● Strategy control ● The infamous “trigger” ● Balance sheet structure maintenance ● Asset preservation ● How the restrictions are set ● Forge your own strategy ● Identify costly restrictions ● A basic negotiating posture ● Eliminate duplication ● Relax the trigger ● dealing with strategy control ● Preference shares ● Taxation ● Redemption ● Security  ●  Period  ●  Drawdown  ●  Dividend  ●  Other  conditions  ● Companies which may find preference share capital appropriate ● The effect of taxation on dividend receipts by the bank ●; title: CHAPTER 82; title: COMPANY VALUATIONS GUIDE TO ASSESSMENTS; title: 707; title: CHAPTER 83; title: INTEREST CALCULATIONS FORMULAE USED IN BANKING  712; title: Interest  income  ●  Interest  income:  using  the  commercial  interest formula ● Compound interest ● Compound interest:  calculating the interest rate ●Personal loan costs ● Effective rate of interest ●; title: CHAPTER 84; title: SECURITIES AND CREDIT ADMINISTRATION 716; title: Administration ● Examine general ledger for bad debts written off and bad debts recovered ● Security ● Technical correctness of documents ● Summary effect of section 226 of the companies act ● Cession of loan funds ● Cession clause in form 8-1 ● Authority to waive a cession ● Notification and acknowledgement of a cession and when/by whom it may be waived ● Policies as collateral security ●; title: CHAPTER 85; title: SECURITIES CONTROL CHECK LIST    728; title: CHAPTER 86; title: CREDIT ADMINISTRATIVE CONTROL 737; title: A check list for branches ● Daily administrative duties ● Weekly administrative duties ● Mid-monthly administrative duties ● Monthly administrative duties for branches with all/some forex centralized at international branch ● Quarterly administrative duties ● Half yearly administrative duties ● Yearly duties ●; title: CHAPTER 87; title: WHY BANKS FAIL: CLASSICAL CASE STUDIES 744; title: POWER  COMPANY  OF  AMERICA:  CASE  STUDY  (A)  ●  BANKERS TRUST CASE STUDY  (B) ● DAIWA BANK CASE STUDY (C) ● LONG TERM CAPITAL MANAGEMENT: CASE STUDY (D) ●; title: NATIONAL  WESTMINSTER  MARKETS  (NWM):  CASE  STUDY  (E)  ●; title: SAAMBOU BANK CASE STUDY (F) ● LESSONS LEARNED FROM THE DEMISE OF SAAMBOU BANK ● LESSONS LEARNED FROM THE DEMISE OF POWER COMPANY OF AMERICA ● LESSONS LEARNED FROM THE DEMISE OF DAIWA BANK ● LESSONS LEARNED FROM THE DEMISE OF LONG TERM CAPITAL MANAGEMENT ● LESSONS LEARNED FROM THE DEMISE OF NATIONAL WESTMINISTER MARKETS ● CONCLUSION ● On-General-Risk-Management ●; title: CHAPTER 88; title: GLOSSARY OF COMPUTER TERMS    777; title: REFERENCES  853