Banking Products
High markets : Singapore, Malaysia, Hongkong (for China), Shanghai, Mumbay, Bangkod,
Jakarta
Market Mix: Short seminars of one day. High price (World Bank price). Duration about 6 hours
plus networking. Objective to get consultancy services and get PR prestige for UBIS. Product
names: I, II, III, IV. Clients: Networking, Banking Professionals, Auditors, Accounting
professionals, Business Development Managers, IT-DEP Programmers for Banking.
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Low markets: Vietnam, Cambodia, Burma, Thailand, India, Indonesia, Hongkong (for China),
Philippines.
Market Mix: Short courses of one week duration and long courses of 2-4 weeks duration.
Products : V. VI, VII, VIII, IX, X.
Clients: Finance Ministry, Banking Academy, Banking Professionals, Foreign Auditors,
Foreign Accounting Firms, Banking Staff (in-house), Government.
Name of products:
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
X.
Short seminar (6hours): Basel III - Regulatory Future Development (Banque de
règlement international)
Short seminar (6hours): Hedge Funds
Short Seminars (6 hours): Commodity Trading
Short seminar (6 hours) : Crisis Management
Short module (1 week) : Risk Management // Credit Policy (1-3D plus workshop
1D)
Short module (1 week) : Portfolio Management // Asset management-Pension
Fund // Risk Management // Legal Links (Family office/Tax Planning) (3D plus
workshop 2D)
Short module (1 week) : Forex Trading // Treasury-interest // Money Market
Instruments (3D+2D)
Short module (1 week) : International Trade Finance – LC // Forex – Swap
options // Commercial and Capital Goods (5D)
Short module (1 week) : Venture Capital // Equity Funds or Corporate Business //
Privatisation – IPO (5D)
Long course : Role of Bank duration ? // History of Banking duration ? // Standard
Structure of a Bank (Control and Risk) – duration 2-3 weeks // Commercial
Features duration ? // Specific Professions in Banking: Private Banking. Asset
Management. Portfolio. Hedge Funds. Funds. Concierge Services. // Investment
Banking // Commercial Banking : Retail. International Trade and Finance . LC.
Trading. // Across border function: Forex. Treasury. Accounting. Organisation
structure.
Literature: International Finance, Global Edition.
Part One: Foundations of International Finance p. 26
1. Introduction to International Finance p. 28
2. International Monetary System p. 53
3. Balance of Payments p. 88
Part Two: The Foreign Exchange Market. Exchange Rate Determination and Currency
Derivatives p. 108
4. The Foreign Exchange Market p. 110
5. International Parity Conditions and Exchange Rate Determination p. 138
6. Foreign Currency Future and Options p. 172
Part Three: International Capital Markets and Institutions p. 1967.
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8.
9.
10.
11.
International Banking and Money Market p. 198
International Bond Market p. 236
International Equity Markets p. 256
Interest Rate and Currency Swaps p. 280
International Portfolio Investment p. 298
Part Four : Foreign Exchange Exposure and Management p. 336
12. Management of Economic Exposure p. 338
13. Management of Transaction Exposure p. 360
14. Management of Translation Exposure p. 389
Part Five: Financial Management of the Multinational Firm p. 408
15.
16.
17.
18.
19.
20.
21.
Foreign Direct Investment p. 410
International Capital Structure and the Cost of Capital p. 437
International Capital Budgeting p. 463
Multinational Cash Management p. 482
Exports and Imports p. 493
International Tax Environment p. 504
Corporate Governance Around the Wolrd p. 526
Introduction
The scope and content of international finance have been evolving due to deregulation of
financial markets, product innovations and technological advancements. As capital markets of
the world are becoming more integrated , a solid understanding of international finance has
become essential for astute corporate decision making. Reflecting the growing importance of
international finance as a discipline, we have seen a sharp increase in the demand for experts
in the area in both the corporate and academic world.
Emphasis on the Basics: The authors believe that any subject is better learned if one first is
well grounded in the basics. The book contains several chapters to the fundamental concepts
of international finance. Once these are learned, the remaining material flows easily from
them. The material is conceived in such a way that, as the more advanced topics are
developed, students are brought back to their relationship to the fundamentals.
Description of the course:
Part One is an introduction to International Finance and lays the macroeconomic foundation
for all the topics to follow. A thorough understanding of this material is essential for
understanding the advanced topics covered in the remaining sections.
Chapter 1 provides an introduction to International Finance. The chapter discusses why it is
important to study international finance and distinguishes international finance from domestic
finance. It includes the recent economic developments such as the global financial crisis and
sovereign debt crisis of Europe.
Chapter 2 introduces the various types of international monetary system under which the
world economy can function and has functioned at various times. The chapter traces the
historical development of the world’s international monetary systems from the early 1800s to
the present. Additionally, a detailed discussion of the European Monetary Union is presented.
In this chapter you find an updated coverage of monetary developments, including the euro
zone crisis.
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Chapter 3 presents balance-of-payment concepts and accounting. The chapter shows that
even a country must keep its ‘economic house in order’ or else it will experience current
account deficits that will undermine the value of its currency. Included in this chapter are
updated balance-of-payments statistics.
Part Two begins with a discussion of the organization of the market for foreign exchange.
Both spot and forward transactions are studied. The next chapter examines exchange rate
determination. The discussion focuses on how changes in the exchange rate between two
countries’ currencies depend on the relative difference between the nominal interest rates and
inflation rates between the two countries. The final chapter of this section introduces currency
derivative contracts useful for managing foreign currency exposure.
Chapter 4 provides an introduction to the organization and operation on the spot and forward
foreign exchange market. This chapter describes institutional arrangements of the foreign
exchange market and details on how foreign exchange is quoted and traded worldwide. The
chapter includes a fully updated market data and examples as well as an expanded coverage
on forward cross-exchange rates to facilitate understanding.
Chapter 5 presents the fundamental international parity conditions among exchange rates,
interest rates, and inflation rates. An understanding of these parity conditions is essential for
practicing financial management in a global setting.
Chapter 6 on foreign currency futures and options provides an extensive treatment of
exchange-rated currency futures and options contracts and includes market data and
examples, a new International Finance in Practice box reading. This part also includes an
improved presentation of graphs; expanded discussion of binomial options pricing model to
facilitate understanding.
Part Three on international capital markets and institutions provides a thorough discussion of
international financial institutions, assets and marketplaces, and develops the tools necessary
to manage exchange rate uncertainty.
Chapter 7 on international banking and money market differentiates between international
bank and domestic bank operations and examines the institutional differences of various
types of international banking offices. International banks and their clients constitute the
Eurocurrency market and form the core of the international money market. This chapter
includes also a new discussion on Basel III capital adequacy standards and more discussion
on the causes and consequences of the global financial crisis. Other features include
coverage of Eurodollar interest rate futures contracts showing relationship to forward rate
agreements and an appendix on mortgage-backed securities, structured debt obligation,
collateralized debt obligations, and credit default swaps.
Chapter 8 on international bond market provides a statistical perspective of the world’s bond
markets. It also distinguishes the two basic segments of the international bond market: foreign
bonds and Eurobonds. The major types of international bond market instruments are
discussed. The chapter includes a discussion of the benefits of raising funds in the
international bond market as opposed to domestically.
Chapter 9 covers international equity markets. The chapter begins with a statistical
documentation of the size of the equity markets in both developed and developing countries.
Various methods of trading equity shares in the secondary markets are discussed.
Additionally, the chapter a discussion of the advantage to the firm of cross-listing equity
shares in more than one country and security regulation. It covers also on American
Depository Receipts and global registered shares and includes a new section on empirical
findings on cross-listings and ADRs.
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Chapter 10 on interest rate and currency swaps, useful tools for hedging long-term interest
rate and currency risk. It gives a fully updated market date and statistics and includes a new
International Finance in Practice box.
Chapter 11 covers international portfolio investment, including the reasons for diversifying
portfolios internationally, the extent of gains from international diversification, and the effects
of fluctuating exchange rates on international portfolio investments. It documents that the
potential benefits from international diversification are available to all national investors. The
chapter includes an updated statistical analysis of international markets and diversification
with small-cap stocks.
Part Four on foreign exchange exposure and management describes the various types of
foreign exchange risk and discusses methods available for risk management. It is composed
of three chapters covering the topics of economic, transaction, and translation exposure
management, respective.
Chapter 12 covers economic exposure, that is, the extent to which the value of the firm will be
affected by unexpected changes in exchange rates. The chapter provides a way to measure
economic exposure, discusses the determinants, and presents methods for managing and
hedging economic exposure.
Chapter 13 covers the management of transaction exposure that arises from contractual
obligations denominated in a foreign currency. Several methods for hedging this exposure are
compared and contrasted. The chapter also includes a discussion of why a MNC should
hedge, a debatable subject in the minds of both academics and practitioners.
Chapter 14 covers translation exposure or, as it is sometimes called, accounting exposure.
Translation exposure refers to the effect that changes in exchange rates will have on the
consolidated financial reports of a MNC. The chapter discusses, compares, and contrasts the
various methods for translating financial statements denominatd in foreign currencies, and
includes a discussion aof managing translation exposure using fund adjustment and the pros
and cons of using balance sheet and derivative hedges. The chapter includes an expanded
coverage of international accounting standard and FASB 133.
Part Five on financial management of the multinational firm covers topics on financial
management practices for the multinational firm.
Chapter 15 discusses why MNCs make capital expenditure in productive capacity in foreign
lands rather than just producing domestically and then exporting to overseas markets. The
chapter deals with foreign direct investment and provides updated trends in cross-border
investment and M&A deals. It also provides updated political risk scores for countries.
Chapter 16 deals with international capitals structure and the cost of capital of an MNC. An
analytical argument is presented showing that the firm’s cost of capital is lower when its
shares trade internationally and if debt capital is sourced internationally.
Chapter 17 focuses on international capital budgeting. It presents the adjusted present value
(APV) framework of Donald Lessard that is useful for the parent firm in analyzing a capital
expenditure in foreign operations.
Chapter 18 covers issues in cash management for the MNC. The chapter shows that if a
MNC establishes a centralized cash depository and a multilateral system, the number of
foreign cash flow transactions can be reduced, saving it money and giving it better control of
its cash.
Chapter 19 provides a brief introduction to trade financing and countertrade. An example of
typical foreign trade transation explains the three primary documents that are used in trade
financing: letter of credit, time draft and bill of lading for export and import activities.
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Chapter 20 on the international tax environment opens a discussionof the theory of taxation.
Different methods of taxation are considered, and income tax rates in select countries are
compared. The chapter concludes with a discussion of transfer pricing strategies, which might
be a possible technique for an MNC to reduce its tax liabilities, for ex branch versus
subsidiary organizational structure. Included in the chapter is a fully updated comparative
national income tax rate table with updated examples.
Chapter 21 provides an overview of corporate governance around the world and discusses on
how corporate governance structure affects corporate decision-making procedures and
shareholder welfare in different countries. It provides a review of corporate governance
systems in different countries, the Dodd-Frank Act, and managerial implications.
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