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Every financial professional needs to understand the definitions, roles, risks and opportunities associated with unique financial instruments, terms and concepts that impact the industry every day. These instruments have contributed to both the growth and challenges in global economies over recent years. 

Derivatives, Interest Rate Swaps and indices like LIBOR are all concepts that professionals in banks, credit unions, investment firms, as well as consulting firms should understand well. This critical bank webinar series will cover these instruments in detail to give attendees the functional knowledge to interpret and explain all of them.

This 3-part online, webinar training is designed especially for financial services executives, accountants, auditors and financial advisors, but all professionals need to fully understand these important financial instruments and how they impact the economy, institutions and customers.

If you are interested in just one of the sessions ($249 individual, rather than the entire Bootcamp, just click on the Session Title below to get redirected to the individual webinar page.

Unique Financial Instruments 101: Derivative Products and Their Usage

Derivative products and their usage have been widespread in banking circles. Unfortunately, the terminology has not been so crystal clear. As a result, derivatives usage has become confusing. This financial webinar attempts to clear up the confusion by demystifying the entire derivative usage area and taking away the mystique surrounding the derivative area of practice. 

Specifically, this financial training defines derivative financial instruments and:

• Identifies why different types of entities need derivatives 
• Explains risk transfer 
• Reviews the “liability sensitivity” of depository companies 
• Explains the “Asset/Liability Management” process 
• Distinguishes between derivatives used to speculate and derivatives used for hedging; and
• Establishes an audit approach to derivative usage 

It discusses the following types of derivatives widely in use today: 

1. Interest Rate Swaps 
2. Futures 
3. Forwards 
4. Forward rate agreements 
5. Options 
6. Caps
7. Floors 
8. Collars 
9. Mortgage-Backed Derivatives
10. CMOs
11. Floaters
12. Inverse Floaters 

This financial training identifies the typical derivatives (e.g. futures, forwards, options, swaps) and provides illustrations and how they are specifically used by various organizations. Emphasis is placed on the controls over and the documentation of derivative product activities.  Particular attention is given to proper derivative accounting (trading, fair value hedging, cash flow hedging) and the required financial statement disclosures for financial instruments and related derivative products. “Real” examples are used to illustrate learning objectives. 

Attendees will become familiar with the ever-increasing use of derivative products. Additionally, a sound understanding of the reasons for derivatives is covered. 

All attendee organizations that currently use or are considering the use of derivatives should attend this valuable financial services webinar. For companies that “do not” use derivatives, this training will force attendees to ask “why not?”. In the past, derivatives were thought of as weapons of financial destruction with most banks saying they didn’t use them. They were thought to be dangerous; the banker simply didn’t have the expertise to use them. Now, when asked if a bank uses derivatives and they reply with a “no” response, the next question is “why not?”

Unique Financial Instruments 201: Interest Rate Swaps - A Primer

Not too long ago, many financial institutions would say “we don’t use derivatives, including interest rate swaps. We are too small, or we don’t have the expertise to get involved with derivatives.” Today one would say, “if you don’t use derivatives, why not?” It’s like saying, “we never had a fire so let’s cancel the fire insurance policy. That would be silly. The insurance protects against loss from fire. The derivatives protect against losses created by interest rate risk.

Today, stakeholders believe management is using all available tools to protect against losses caused by interest rate risk. Today the tools include derivatives and they are readily available for usage. “We don’t have the expertise” is no longer an excuse.

This 90-minute banking webinar provides an overview of the various derivative products used to prevent against losses such as large unanticipated interest-rate movements – upward or downward. The various derivatives are designed to protect depository institutions. Attendees will see that we cannot control interest rates, but we can protect against interest rate risk by identifying, monitoring and controlling interest sensitive assets and interest sensitive liabilities. We can change the maturities for such assets and liabilities to a large extent by careful use of derivatives.

The derivative products explained in detail in this webinar include the following: 

1. Interest Rate Swaps
2. Futures
3. Forwards
4. Forward Rate Agreements
5. Options
6. Caps
7. Flours
8. Collars

The major focus of this financial webinar, of course, is on interest rate swaps. Attendees will take away a knowledge of derivatives, especially Swaps and how they can be used to reduce interest rate risk.  

Today, derivatives have become an essential tool to control risk, particularly credit risk. More and more corporate entities are asking internal auditors to give comfort that the derivative activity in the bank is occurring in a safe and sound environment and derivatives are properly accounted for. 

This timely banking webinar provides an overview of derivatives and focuses specifically on auditing and accounting rules and tools for derivatives use. 

Unique Financial Instruments 301: The LIBOR Story - What Bank Executives, Accountants and Auditors Need to Know

In recent times (decades, it seems) there have been numerous financial scandals. Some, such as the Madoff scandal took up all the financial press. What gets covered in the press are the scandals that are sensationalized because they affect individual investors – the little guy. But, one scandal that seems to have attracted relatively little coverage compared to the more sensational scandals was the LIBOR scandal. The LIBOR scandal didn’t involve the little guy directly. Instead it had financial implications that affect pricing throughout the economy for all types of transactions. The LIBOR scandal was the most costly from a financial viewpoint and from the view point of a loss in confidence in the legitimacy of the financial systems.

The LIBOR scandal damaged confidence in the “private club” pricing system in place and used for many years. That system was manipulated to benefit those who had the power to set interest rates. That system did not arrive at a fair, impartial market rate. It didn’t do what it was supposed to do. It failed us all. 

This 90-minute bank webinar explores the LIBOR system that was in place for many years. It discusses the beginnings of LIBOR from its inception in 1979. It addresses how LIBOR was created; what happened to LIBOR; the actual manipulation of LIBOR; the scandal; the aftermath of the scandal; alternative rates now proposed; and the future of LIBOR. A new universal rate for international transactions has become necessary. Unfortunately, LIBOR was abused in order to favor the rate setters, themselves. 

This banking webinar addresses: 

1. The LIBOR system that was in place 
2. How LIBOR was calculated 
3. Who calculated LIBOR 
4. What happened over the years 
5. The scandal itself 
6. Transfer of responsibility to regulators away from private sector manipulations 

It covers the initial manipulation through the current status, where, today, LIBOR is being phased out. It suggests other alternatives rates and takes the attendees to the current date where SOFR is about to replace LIBOR. 

This financial webinar is informative and useful for all auditors and accountants who have clients or auditors that have contracts that use LIBOR as a pricing reference. It is also important training for all internal and external accountants and auditors who have encountered auditee or client financial transactions that have made reference to LIBOR as a pricing mechanism. Use this webinar to learn how LIBOR was created, where LIBOR has been, and, now, how it has outlived its usefulness.