CH AP T E R 2 0 - E M ER GI NG I SS U E S
DEVELOPMENTS IN WORLD FINANCIAL MARKETS
•
Global financial crisis
•
Dark pool trading
•
Removal of barriers to the movement of capital
•
International regulations on money laundering
FINANCIAL CRISIS
•
Lehman Brothers (Sept 2008)
•
Northern Rock (2007)
SOVEREIGN DEBT CRISIS
•
Greece
•
Ireland
•
Spain
•
Portugal
DARK POOL TRADING
•
Dark pool liquidity
•
Upstairs market
•
Dark liquidity
•
Dark pool
Electronic platforms that allow buyers and sellers to conceal large orders of shares from the public
but which should be publicised to make trading more fair for all parties
•
Used by institutional investors
•
OTC transactions
•
Unavailable to the general public
•
No identifier of the trader or the price
CH AP T E R 2 0 - E M ER GI NG I SS U E S
REMOVAL OF BARRIERS TO THE MOVEMENT OF CAPITAL
Financial institutions
•
‘High Street’ banks
•
Merchant banks
•
Insurance companies
Significance for companies
•
Mergers/acquisitions
•
Risk
•
Customers
•
Employees
•
Finance
CH AP T E R 2 0 - E M ER GI NG I SS U E S
INTERNATIONAL REGULATIONS ON MONEY LAUNDERING
Money laundering
Any financial transaction where the purpose is to conceal the identity of the parties to the
transaction or to make tracing the transaction difficult.
•
“Clean” money
•
Avoid tax
•
Distort accounting information
Companies at risk
•
Cash businesses
•
Luxury goods
Significance to companies
•
Assess the risk
•
Take action to reduce the risk
Risk process
•
Identify the risk
•
Assess the risk
•
Profile the risk
•
Manage the risk
•
Monitor the risk
•
Record the process