Financial Market, Entrepreneurial Economy and Studying Finance · Financial Market, Entrepreneurial...
Transcript of Financial Market, Entrepreneurial Economy and Studying Finance · Financial Market, Entrepreneurial...
Financial Market, Entrepreneurial Economy and Studying Finance
Prof. Dr. Marco J. MenichettiChair in Business Administration, Banking and Financial Management
Institute for Finance
[email protected] 2017
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Outline
What is a Financial Market?
Liechtenstein: Entrepreneurial Economy and Financial Market
Studying Finance in Connection with an Asset Management Hub
Menichetti, October 20173
Outline
What is a Financial Market?
Liechtenstein: Entrepreneurial Economy and Financial Market
Studying Finance connected to an important Asset Management Hub
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What is a Financial Market?
Financial Centers
Financial Intermediaries/ Institutions
Regulation and Market Supervision
Financial Markets
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Financial Markets
Financial Markets• Bond Markets• Stock Markets• Foreign Exchange Markets• Markets for Alternative Investments• International Financial Markets
Structure of Financial Markets• Primary and Secondary Markets• Exchanges and Over-the Counter Markets• Money and Capital Markets• Spot and Forward Markets
Source: Mishkin & Eakins (2016).
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Financial Center Geographical location (1) that has a heavy concentration of financial institutions, (2) that offers a highly developed commercial and communications infrastructure, and (3) where a great number of domestic and international trading transactions are conducted. London, New York, and Tokyo are the world's premier financial centers.
• Regional, national, international financial center• Global financial center: direct access from all over the world• Niche financial centers: Corporate Finance, Asset
Management, FX, Derivatives, Trade Finance, Project Finance etc.
• Onshore vs. offshore financial centersSource: Zomoré (2007); Mishkin & Eakins (2016).
Leading Wealth Management Centers (2015) -International Private Client Market Volume
MARKET VOLUME (IN USD TRILLION AND AS PERCENTAGE OF MARKET SHARE)
Source: Deloitte (2015).
Growth in Wealth Management Market Volume (AuM, 2008-2012 and 2012-2014)
CHANGE IN INTERNATIONAL MARKET VOLUME FOR TWO PERIODS
Source: Deloitte (2015).
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Financial Intermediaries and Institutions
Financial Intermediaries: Entities that intermediate between providers and users of financial capital.
Two types of information reusabilityCross-sectional: The same information can be utilized across different usersIntertemporal: The same information can be reused through time
For a given attribute, the larger the grid, the more compelling the need for the brokerFor a given size grid, the less readily observable the attribute (the more subtle the signal), the more important the skills and reputation of the broker, e.g., phone books vs. security analysts or loan officers
Source: Greenbaum, Thakor, & Boot (2016).
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Services provided by Financial Intermediaries
Source: Greenbaum, Thakor, & Boot (2016).
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Financial Institutions
• Banking Industry• Mutual Fund Industry• Insurance Companies and Pension Funds• Investment Banks• Venture Capital and Private Equity Firms• Hedge Funds• Security Brokers and Dealers• etc
Source: Mishkin & Eakins (2016).
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Regulation and Market Supervision
Objectives of Regulation• Safety and soundness of individual institutions• Stability of the financial system• Market structure and competition• Consumer protection• Credit allocation• Monetary control
Source: Greenbaum, Thakor, & Boot (2016).
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Outline
What is a Financial Market?
Liechtenstein: Entrepreneurial Economy and Financial Market
Studying Finance in Connection with an Asset Management Hub
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OverviewArea
Capital
Inhabitants
Currency
Official Language
Head of State
Head of State (regent)
Head of Government
Export of goods
GDP (nominal)
GDP per capita
GNI
GNI per capita
Religion
160 km² / 61.8 mi² (6th smallest country worldwide)
Vaduz
37‘810 (2016)
Swiss Francs (CHF)
German
Prince Hans-Adam II. of Liechtenstein
Hereditary Prince Alois of Liechtenstein
Prime Minister Adrian Hasler
3'453 million CHF (2014)
6‘105 million CHF (2014)
163‘384 CHF* (2014)
4‘962 million CHF (2014)
132‘795 CHF (2014)
80% Roman Catholic, 7.3% Protestant
Source: Statistical Office Liechtenstein * approximately 50% inward commuters employed
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Relationships
Switzerland – Liechtenstein Liechtenstein – European Union
Customs Union with Switzerland since 1923
Since 1921 Swiss Franc is used as the official currency
Currency Union Treaty with Switzerland signed in 1980
> National Bank of Switzerland is also the centralbank of Liechtenstein
Liechtenstein is official EFTA member since 1991
Liechtenstein is part of EEA since 1995
EEA is formed by the 28 EU-members plus Liechtenstein, Iceland, Norway;
Switzerland is not member in the EEA
The freedom of movement for goods, services, persons (with restrictions) and capital within the EEA is applicable in Liechtenstein
Source: Office of Economic Affairs Liechtenstein
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Facts and Figures – Employment
Total Employedof which are:
Residents EmployedInward Commuters
Full TimePart Time
Full Time Equivalentsof which are:
MenWomen
LiechtensteinersForeigners
employed in:Sector 1 (agriculture)
Sector 2 (industry)Sector 3 (services)
37‘453 (100%)
17‘214 (46.0%)20‘239 (54.0%)
26‘864 (74.2%)9‘360 (25.8%)
32‘122 (100%)
20‘893 (65.0%)11’229 (35.0%)
9‘545 (29.7%)22‘576 (70.3%)
221 ( 0.7%)13‘486 (42.0%)18’415 (57.3%)
Source: Statistical Office Liechtenstein (2016)
Distribution of Employment in Liechtenstein
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Facts and figures - Employment
Source: Statistical Office Liechtenstein (2016)
Total Employed
Inward Commuters
Total Employed and Inward Commuters
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Employment – Comparison
Employment Structure
Liechtenstein Switzerland Austria Germany Luxembourg
Resident Population 37‘810 8‘417‘700 8‘772‘865 82‘175‘700 590‘667
Total employed 37‘453 4‘604‘000 4‘220‘000 43‘595‘000 405‘700
% of inward commuters 54.0% 6.9% 43.0%
Quota (total employed toresident population)
99.1% 54.7% 48.1% 52.1% 68.7%
Employment Distribution
Liechtenstein Switzerland Austria Germany Luxembourg
Sector 1 (Agriculture)
Sector 2 (Industry)
Sector 3 (Services)
Source: Statistical Office Liechtenstein (2016)
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Gross Domestic Product comparison
Source: World Bank (2016), CIA Fact Book,Statistical Office Liechtenstein (2016)
Liechtenstein Switzerland Austria Germany Luxembourg
Area in km2
Liechtenstein compared to (in %)160
(100.00%)41‘277
(0.39%)83‘871
(0.19%)357'022
(0.045%)2‘586
(6.19%)
GDP nominal (2014) in billion current USD
Liechtenstein compared to (in %)
6.66 (100.00%)
702.71(0.95%)
438.38(1.52%)
3’879.28(0.17%)
66.30(10.05%)
GDP/capita (2014) in current USD
Liechtenstein compared to (in %)
179‘478.6(100.00%)
85’814.6(209.15%)
51’322.6(349.71%)
47’902.7(374.67%)
119’172.7(150.60%)
Resident Population (2016)Liechtenstein compared to (in %)
37‘810(100.00%)
8‘417‘700(0.45%)
8‘772‘865(0.43%)
82‘175‘700(0.05%)
590‘667(6.40%)
Currency Swiss Franc (CHF) Swiss Franc (CHF) Euro (EUR) Euro (EUR) Euro (EUR)
Official Language GermanGerman, French,
Italian, Rhaeto-Romanic
German GermanFrench, German,
Luxembourgish
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Financial Market Liechtenstein
Source: Liechtenstein Bankers Association
Banking Sector (Liechtenstein Bankers Association, LBA): 16 banks
Insurance Sector (Liechtenstein Insurance Association, LVV): 33 insurance companies
Investment Fund Sector (Liechtenstein Investment Fund Association, LAFV): 17 companies
Asset Management Sector (Association of Independent Asset Managers in Liechtenstein,
VuVL): 86 members
Professional Trustees and Fiduciaries Sector (THK): 396 companies
Financial Market Authority (FMA)
Financial Intermediaries and Authorities in Liechtenstein
Current Challenges for the Liechtenstein and Switzerland Financial Centers
58 %
5 %
26 %
11 %
Banking regulation
Bad debts
Digitalization
Margin pressure
Source: Finance Forum Liechtenstein 2017
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Large potential of specialists and experts from Switzerland, Austria, and Germany
Stable social, legal, and economic order
High degree of political continuity and stability
Liberal economic policy and company law
Moderate corporate taxation
Solid financial policy of public budgets
Free access to markets in Europe
Manageable size
Flexibility and short decision-making paths
Large capital power of the public sector
AAA country rating by Moody's and Standard & Poor's
Niche products compatible with European law
Advantages in Liechtenstein
Source: Finance Liechtenstein
The Liechtenstein Financial Market
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Literature
Deloitte (2015). The Deloitte Wealth Management Centre Ranking 2015. Zürich: Deloitte Consulting AG.
Greenbaum, S.I., Thakor, A.V., & Boot, A.W.A. (2016). Contemporary Financial Intermediation (3rd ed.). Amsterdam: Elsevier.
Mishkin, F.S., & Eakins, S.G. (2016). Financial Markets and Institutions (8th ed.). Boston: Pearson.
Zomoré, A. (2007). Concepts of Offshore Financial Centers: In Search for an Operational Definition. IMF Working Paper WP 07/87, Monetary and Capital Markets Department. Washington: International Monetary Fund.
Internet Sources: CIA Factbook; Finance Liechtenstein - www.finance.li; Financial Market Authority Liechtenstein; Office of Economic Affairs Liechtenstein; Statistical Office Liechtenstein (2016); World Bank (2016)
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Outline
What is a Financial Market?
Liechtenstein: Entrepreneurial Economy and Financial Market
Studying Finance in Connection with an Asset Management Hub
12-month-season for sports and leisure
38‘000 career opportunities inLiechtenstein
Among the most peaceful countries on earth: Austria #4, Switzerland #5(no data for Liechtenstein, © Institute for Economics and Peace 2013)
1000 students only
1:12 lecturer/student-ratio(average for BSc and MSc programs)
2 BSc, 4 MSc, 2 PhD programs in Business Economics and Architecture
Excellent prospects.Welcome to the University of Liechtenstein.
Master of Science in Finance (MSc)
Duration 4 semesters (full-time programme)
Credits 120 ECTS
Language English
Tuition fees CHF 850.– per semester
Lecture days Tuesday, Thursday, Friday, occasionally Saturday
The department of Business Economics is in the process of AACSB accreditation, which is scheduled to be obtained (latest) in 2019.
Why study Finance in Liechtenstein?> In the heart of Europe with international finance and business know-how
> Programme Focus: Risk and Asset Management, International Finance
> Programme entirely in ENGLISH, excellent employment rates of our graduates
> Personal learning environment through low professor/student-ratio
> Member of the CFA University Recognition Program, CFA Institute Research Challenge
> Member of the GARP partnership of risk education
> Projects and MasterLABS with the financial industry (i.e. asset management firms, banks, insurance companies, Fintech companies, Financial Market Authority)
> International study group of around 40 students
> Educational journey to leading financial centers in the world
> Suitable preparation for a PhD program
> Attractive tuition fees (state-funded); 2 scholarships per year by LGT Foundation
Semester structure
Fundamentals1st semester
2nd semester
3rd semester
4th semester
Engl
ish
This MSc in Finance has been accepted into the CFA Institute University Recognition Program, as the programme covers at least 70% of the CFA Program Candidate Body of Knowledge (CBOK). 15 partial scholarships per year are provided for Master students, who wish to pass the CFA exam level 1 – 3.
This MSc in Finance also has been accredited by GARP (Global Association of Risk Professionals) as a partner in risk education. 1 full scholarships can be offered to students for the FRM/ERP exam.
Master Thesis
Investments
Risk and Asset Management
12
0
ECTS
Cross-facultyelectivesubjects
(12 ECTS)
Curriculum – MSc in Finance
The CHAIRS you are dealing with
Banking and Financial Management
Exchange Rate Risks
Equity Investment Management
Sustainable Investments
Finance
Quantitative Finance
Empirical Finance
Behavioural/Experimental Finance
Prof. Dr. Marco J. Menichetti
Prof. Dr. Michael Hanke
Prof. Dr. Marco J. MenichettiAcademic Director
Florian Schaller, MSc
Executive Director, MSc in Finance Hilde Zimmermann
Programme Administrator
Additional Offers
> LGT University Scholarship
> CFA Exam Scholarships
> Participation in CFA Institute Research Challenge
> GARP Exam Scholarship
> Banking Award Liechtenstein
> Career Day in Finance –Workshop with leading employers of the financial industry
> Extracurricular Activities:
> After Work Lectures for Asset and Investment Professionals
> Participation in Workshops and Conferences organised by Liechtenstein House of Finance
Professional Career Paths
> Asset and Capital Management Firms, Wealth Management
> Banks and Central Banks
> Insurance Companies
> Investment Undertakings
> Financial Advisors and Family Offices
> Finance Departments of non-financial Companies
> Consulting Firms
> Regulatory Authorities and Financial Market Authorities
20% of our graduates find their job within Liechtenstein, another 20% within the region. Until now, every graduate had a job by graduation.
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Partner companies and career opportunities (choice)
Educational Journey 2018 New York:
Banks, Asset Management companies,
United Nations, Princeton University, NYSE, SEC,…
Excursion:
• Portfolio Management Game at a foreign university
• Banking Game in cooperation with Kosminski University,
Warsaw.
Educational Journeys & Excursions
Hong Kong & Singapore, 2017
Beijing & Shanghai, 2015
New York & Chicago, 2013
Singapore & Kuala Lumpur, 2011
Finance Alumnis - go international
Viktor Tsekov MSc Counterparty Risk
DepartmentBarclays Investment Bank
LONDON
Anete Berzina MSc Economist at
Bank of LatviaRIGA
Dirk Frohnert MSc Portfolio Manager at
JPMorgan Asset Management
LONDON
Patrick Prinz MSc Analyst Corporate and Investment Banking at
Citigroup N.A. ZURICH
Anke Sielker MScSenior Business Development
AssociateAIR Worldwide
MUNICH
Jiri Chroustovsky MSc Real Estate Advisory at
Deloitte PRAGUE
Sebastian Venc MSc Investment Banking Analyst at Robert W. Baird & Co. FRANKFURT
Plus many alumni with Liechtenstein financial services companies (LGT, LLB, VPBank, Raiffeisen Bank Liechtenstein, Valartis Bank, insurance companies, assetmanagement firms, market authority etc.)
Thomas Gartlacher, MSc, Treasury Department, Risk ManagerHilti AG VADUZ
Marina Vasileva MScFund Officer at
CAIAC Fund Management
VADUZ
Admission requirements
> Bachelor’s degree or an equivalent diploma degree in Business Administration, Economics, etc. with at least 180 ECTS.
> Performance above average in the undergraduate study programme
> English language skills at proficiency level B2 (CEFR) is required (level C1 is desirable) if your mother language is not English
> Academic writing skills
> Motivation for the chosen Master
Application and admission procedure
Online application www.uni.li/master-finance
Application 30th June – EU/EEA and Swiss citizensdeadline 31st March – citizens from other countries (a visa for
Liechtenstein is required)
Personal interview we want to get the full picture
Application on www.uni.li/master-finance
Master‘s degree programmes in Liechtenstein
Bu
sin
ess
Eco
no
mic
s
Finance
Entrepreneurship
Master / MSc
Information Systems
Online application Application deadline
www.uni.li/master-finance
www.uni.li/master-ent
uni.li/master-information-systems
Contact
Dr. Matthias [email protected]
Winter intake ONLY
30. June EU/EEA + Swiss citizens31. March citizens from other countries
www.uni.li/master-ar
Winter30. June EU/EEA + Swiss citizens31. March citizens from other countries
Summer30. Nov. EU/EEA + Swiss citizens30. Sept. citizens from other countries
Prof. Peter [email protected]
Architecture
Florian Schaller, [email protected]
Roope Jaakonmäki, [email protected]
Student organisations
> Organize sporting and cultural activities, participation in international competitions, socialactivities and parties
> Provide support in academic life and career opportunities
Join the conversation!
www.facebook.com/uni.li
@uni_li #unili
www.youtube.com/user/UniLiechtenstein
instagram.com/uni_li #unili
linkedin.com/company/universit-t-liechtenstein/
Principality of Liechtenstein
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Two Events for prospective Students
University Information DaySaturday, 25.11.2017, 13:00 – 17:00Visit the University, have a personal talk with Finance students and meet the study directorate.
Try Out – Get your own PictureFriday, 23.02.2017, 9:00 – 14:00 Visit regular lectures in the morning, have lunch with students and meet the study directorate.