Business — Banking — Management — Marketing & Sales

Development division. Capital market function

Category: Bank Management

During the last ten years, economic evolutions, disintermediation, internationalization and technological evolutions have contributed to the development of market activities.

Facing increasing difficulties in its traditional activities, Banks have tried to find additional profits on money markets.


1 Transactions on behalf of customers

Processing of operations (buying and selling of securities) on the Financial Markets, the monetary market or derivatives.

Managing the financial assets of wealthy customers

Creating new financial products.

Managing collective products.

Managing the issuing of mutual funds securities.

2 Transactions of banks on their own

Managing and getting the best results from cash management

Managing the range of derivatives necessary to cover risks (Exchange Rates).

Maximizing financial products of the bank through arbitrage and speculation, under the control of Bank Management.

Organization and tools of market function

1 The organisation is centred on risk Management

Risks are a permanent element in any market transaction and profitability might suffer.

An authorised level of risk has to be decided upon by management and its application has to be controlled on three points:

Clear definition of the security rules in accordance with objectives.

The registering and controlling of transactions by a competent back office.

Immediate and safe computerisation.

The best controls on real time.

2 An efficient organisation

The front office is divided according to the kind of support on specialised desks irrespective of the origin of the operation (customers, cash management, arbitrage, speculation).

the transaction are dealt in real time with very little administrative formalism.

The back office is in charge of the registering, the globalisation, the control, the accounting of profits and losses.

3 The tools

In the front office:

Connection to extend information data base (Reuter-Telerate)

Software for simulations of calculations to help with decision making

In the back office:

Different software for calculation, evaluation, simulation, controls

Accounting connection to the bank accounting functions.

Setting up abroad has for long been the strategy of large banks to be in a position to finance local projects. Today, the evolution of telecommunications and the development of strategic international financial places allow operators to participate and intervene at distance. For cost reasons, the number of subsidiaries abroad is decreasing.

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