Instructor
Ian Giddy has taught finance at NYU, Columbia, Wharton, Chicago and in 30+ countries abroad for the past two decades. He was Director of International Fixed Income Research at Drexel Burnham Lambert from 1986 to 1989. The author of more than fifty articles on international finance, he has served at the International Monetary Fund and the U.S. Treasury and has been a consultant with numerous corporations and financial institutions in the U.S. and abroad. As a banker and consultant he has been involved in the growth of the ABS market in the USA, Europe and Asia. He is the author or co-author of The International Money Market, The Handbook of International Finance, Cases in International Finance, Global Financial Markets, Asset Securitization in Asia and The Hudson River Watertrail Guide.

This four-hour module takes an inside look at commercial banking today. Which banks can make money, and how can they do so? Starting with the basic economics of the characteristics of banks that make them special and subject to specific regulations such as capital requirements, the instructor explores the past and future competitive pressures that are driving the transformation, consolidation and even collapse of many banks at home and abroad.  These pressures include the incursion of investment banks into commercial banks' domain, and vice-versa; the ability of banks' corporate clients to raise multicurrency, multimarket debt; the Euro phenomenon; the unbundling of and pricing of credit risk; and the increasing importance of leveraged lending and quasi-equity financing in M&A activities. We pay special emphasis on understanding the financial logic and pricing of commercial banking transactions, including risky lending and the arrangement of syndicated loans.

• Commercial Banking in a Time of Transition
• Banks vs. Markets
• Deposits, Reserves and the Fed
• Moving Money – Domestic and International
• The Eurocurrency Market
• Bank Risk, Bank Capital
•  “Value at Risk” and Basel I & II
• The Drive for Risk-Adjusted Return on Capital

• The Lending Business
• Asset/Liability Management and "Bought Money"
  
• Loan Pricing—Basis and Margin
• Leveraged Finance: LBOs and Recaps
  
• Case Study: "Monster Garages." (Pricing and payback analysis for a leveraged loan)
  


• Loan Markets
• Unbundling of Loan Features
• Transferability of Loans: Off-Balance-Sheet Banking
• Leveraged Lending and the M&A Financing Business
• Lending vs Distribution and Underwriting: How Banks Make Money
• Case Study: "Connexion S.A." (Structuring and underwriting a syndicated loan for acquisition financing)
  

• Inside Commercial Banking I
• Inside Commercial Banking II
• Inside Commercial Banking III

• "Connexion S.A."
  

• "The New Basel Capital Accord"
• "What is Leveraged Finance?''