trading-book

Learning objectives: Describe financial correlation risk and the areas in which it appears in finance. Explain how correlation contributed to the global financial crisis of 2007-2009. Describe the structure, uses, and payoffs of a correlation swap. Estimate the impact of different correlations...

Learning outcomes: Describe investment banking financing arrangements including private placement, public offering, best efforts, firm commitment, and Dutch auction approaches. Describe the potential conflicts of interest among commercial banking, securities services, and investment banking...

Learning objectives: Explain how deposit insurance gives rise to a moral hazard problem. Describe investment banking financing arrangements including private placement, public offering, best efforts, firm commitment, and Dutch auction approaches. Describe the potential conflicts of interest...

Learning outcomes: Describe and calculate the stressed value-at-risk measure introduced in Basel 2.5, and calculate the market risk capital charge. Explain the process of calculating the incremental risk capital charge for positions held in a bank’s trading book. Describe the comprehensive risk...

Hello, What are the advantages or disadvantages, from a capital requirement perpsective, of being treated as part of the trading book or part of the banking book? In other words, why would we want a position to be treated as one as opposed to the other? Can we hold less capital against...