Table of contents

Foreword

Acknowledgements

1 The City of London

Introduction

The City defined

Financial markets

The City as a world leader

No gain without pain

Markets are people

The future

The next step

2 The Bank of England

Introduction

Origin

Role

Lender of last resort

More crisis reactions

Liquidity provision

Helping the government packages

Profit from the crisis

The future

3 Commercial banking

Introduction

Overview

History

Commercial banks in operation

Structured investment vehicles

Building societies

Raising capital

Credit collection

Bad loans

Capital adequacy

The financial crisis

4 Introduction to equities

Introduction

Shares

Market indices

Stockbrokers

The next step

5 How to value shares

Introduction

Analysts’ forecasts

Ratios

Discounted cash flow analysis

Market influencers

6 New share issues

Introduction

Capital raising

7 Investment banking

Introduction

Overview

Initial public offering

Specialist types of share issues

Bond issues

Mergers and acquisitions

The future

8 Introduction to derivatives

Introduction

Cash and derivatives

Four types of derivative transactions

Hedging and speculation

On-exchange versus OTC derivatives

Clearing and settlement

The credit crisis

European regulation

9 Derivatives for retail investors

Introduction

Options

Futures

Warrants

Financial spread betting

Contracts for difference

10 Wholesale market participants

Introduction

Banks

Investors

Inter-dealer brokers

11 Interest rate products

Introduction

Money markets

The interbank market

Debt securities

Repos

Interest rate derivatives

Index swaps

Forward rate agreements

Interest rate forwards

Government bonds

Yields and redemption

Market size

Borrowing and the economy

12 Credit products

Introduction

Overview

Bonds

Credit derivatives

The future

13 Commodities

Introduction

Overview

The range of commodities – hard

The range of commodities – soft

The investment case for commodities

Regulation

14 Foreign exchange

Introduction

Global overview

The participants

Exchange rates

Supply and demand

Transaction types

Default risk

Further research

15 The London Stock Exchange and its trading systems

Introduction

Overview

Trading

Market makers

Users

16 Share trading venues and exchanges

Introduction

Overview

Exchanges

Multilateral trading facilities

Systematic internalisers

Dark liquidity pools

Consolidation

17 Post-trade services

Introduction

Overview

Clearing

Settlement

Safekeeping and custody

A changing competitive environment

Cross-border players

The future

18 Investors

Introduction

Retail investors

Institutional investors

The future

19 Pooled investments

Introduction

Investment funds

Investment strategies

Investment companies

Exchange-traded funds

Hedge funds

Money market funds

20 Analysts and research

Introduction

Fundamental analysis

Others

21 Financial communications

Introduction

Public relations

Investor relations

Corporate information flow

Journalists

22 UK financial services regulation

Introduction

Overview

The Financial Services Act

The Financial Services Authority

The FSA in transition

The future

23 European and global regulation

Introduction

European legislation so far

Europe in transition

Global regulation

24 Financial fraud

Introduction

Overview

Government initiatives

Specialist areas of fraud

Fraud busters

The future

25 Money laundering

Introduction

Overview

Know your customer

Action against money launderers

The size of the problem

Global cooperation

26 Overview of corporate governance

Introduction

The concept

The Cadbury Code

The Greenbury Committee

The Combined Code

The Turnbull Report

OECD Principles of Corporate Governance

Directors’ Remuneration Report Regulations

Higgs and Smith

The Revised Combined Code

Listing Rules

The Myners Report

Developments across Europe

The financial crisis

The Walker Review

The 2009 Review of the Combined Code

The future

27 Accounting and governance issues

Introduction

Accounting scandals

The Sarbanes–Oxley Act

European auditing and disclosure rules

Business review

International Financial Reporting Standards

28 Insurance and the London companies market

Introduction

Insurance overview

London

More about the London market

Regulatory developments

The future

29 Insurance: Lloyd’s of London

Introduction

Overview

How Lloyd’s works

Financial strength

International progress

The future

30 Reinsurance

Introduction

Overview

Reinsurance contracts

Retrocession

Specialist forms of reinsurance

Reinsurance reassessed

International regulatory developments

Dispute resolution

31 Retail insurance, savings and domestic property

Introduction

The regulator’s view

Products

General insurance

How the products are sold

Complaints and compensation

The future

32 Pensions in flux

Introduction

Overview

The basic state pension

Occupational and personal pensions

Annuities and unsecured pensions

33 The shipping industry

Introduction

Overview

Financial crisis

Regulation of FFAs

Regulation of shipping

Global issues

Climate change

Piracy

The future

34 Catching the Iceland chill

Introduction

Internet accounts

The crisis

Landsbanki reimbursement issues

Action against Kaupthing

Flaws in cross-border regulation

The banking crisis

New and old banks

Towards resolution

Two of the recommendations

Conclusion

35 Islamic finance

Introduction

Overview

Sectors and products

Developing Islamic finance

The financial crisis and after

The future

36 Ethics and integrity

Introduction

Conceptual uncertainty

Putting ethics into practice

The way forward

37 Final word

Appendix 1: Useful websites

Appendix 2: Further reading

References

Index

Index of advertisers