derivative market

Powerful Essays
INTRODUCTION
The Indian Financial System is tasting success of a decade of financial sector reforms. The economy is surging and has gathered the critical mass to convert it into a force to reckon with. The regulatory framework in India has sparked growth and key structural reforms have improved the asset quality and profitability of banks.
Growing integration of economies and the markets around the world is making global banking a reality. Widespread use of internet banking has widened frontiers of global banking, and it is now possible to market financial products and services on a global basis. In the coming years globalization would spread further on account of the likely opening up of financial services under WTO. India is one of the 104 signatories of Financial Services Agreement (FSA) of 1997. Thereby giving India’s financial sector including banks an opportunity to expand their business on a quid pro quo basis.
As in different sectors, competition is driving growth in the banking sector also. The RBI requires all banks to comply with the standardized approach of the BASEL II accord by 31st March, 2007. The quantification and accounting of various risks would result in a more robust risk management system in the industry.
This paper attempts to project the implications of this transition and its effects on the internal operations of a bank followed by its effects on the banking industry and the economy.
The Basel Accord or Basle Accord refers to the banking supervision Accords (recommendations on banking laws and regulations), Basel I and Basel II issued by the Basel Committee on Banking Supervision(BCBS). They are called the Basel Accords as the BCBS maintains its secretariat at the Bank of International Settlements in Basel, Switzerland and the committee normally meets there.

OBJECTIVES OF RISK MANAGEMENT

To get knowledge of the risk management in the banking Industry
What are the different types of risk in the Banking Industry?
How are

You May Also Find These Documents Helpful

  • Powerful Essays

    derivatives market

    • 5083 Words
    • 21 Pages

    multilateral agreements including the Maastricht Treaty, the Stability and Growth Pact and the Lisbon Strategy and, on the other side, by the European Central Bank. The combination of these institutions has produced a mix of monetary, fiscal and labour market policies with powerful social implications. And, what started as a debt crisis in Greece in late 2009 has evolved into a broader economic and political crisis in the Eurozone and European Union. In this framework, the purpose of my paper is to…

    • 5083 Words
    • 21 Pages
    Powerful Essays
  • Powerful Essays

    Derivatives Market

    • 2540 Words
    • 11 Pages

    HOW MUCH SHOULD WE USE DERIVATIVES HEDGES? A Study in Airline Industry Changgull Song Fordham University, Deming Scholars MBA, changgull@gmail.com For managers of airlines, it is not always easy to predict the jet fuel costs, which affect the profitability of the firm. As a solution, some airlines aggressively hedge against the variability, but some others don’t. Here, we are trying to find an answer to a question, “How much should they hedge?” Variability in Earnings: Is it Bad? In a…

    • 2540 Words
    • 11 Pages
    Powerful Essays
  • Good Essays

    Commodity Market Derivatives

    • 29076 Words
    • 117 Pages

    Pass Marks (%) Certificate Validity (in years) 1 Financial Markets: A Beginners’ Module 1500 120 60 100 50 5 2 Mutual Funds : A Beginners’ Module 1500 120 60 100 50 5 3 Currency Derivatives: A Beginner’s Module 1500 120 60 100 50 5 4 Equity Derivatives: A Beginner’s Module 1500 120 60 100 50 5 5 Interest Rate Derivatives: A Beginner’s Module 1500 120 60 100 50 5 6 Commercial…

    • 29076 Words
    • 117 Pages
    Good Essays
  • Better Essays

    Indian Derivative Market

    • 1413 Words
    • 6 Pages

    IPS ACADEMY INDORE Synopsis On “An Exploratory Study on Investor’s Attitude Towards Indian Derivative Market” For partial Fulfillment of the Requirement for the Degree of MBA (full time) Batch 2011-2013 Submitted by: Submitted To: Susheel Rathore Prof. KavitaTiwari MBA - III SEM TABLE OF CONTENTS…

    • 1413 Words
    • 6 Pages
    Better Essays
  • Powerful Essays

    Derivative Market in India

    • 4259 Words
    • 18 Pages

    DERIVATIVE MARKET Introduction The derivatives markets are the financial markets for derivatives, financial instruments like futures contracts or options, which are derived from other forms of assets. The market can be divided into two, that for exchange traded derivatives and that for over-the-counter derivatives. The legal nature of these products is very different as well as the way they are traded, though many market participants are active in both What Are derivatives:- In most cases derivatives…

    • 4259 Words
    • 18 Pages
    Powerful Essays
  • Powerful Essays

    The Impact of Derivatives on Cash Markets: What Have We Learned? Stewart Mayhew Department of Banking and Finance Terry College of Business University of Georgia Athens, GA 30602-6253 October 27, 1999 Revised: February 3, 2000 The Impact of Derivatives on Cash Markets: What Have We Learned? Abstract This paper summarizes the theoretical and empirical research on how the introduction of derivative securities affects the underlying market. A wide array of theoretical approaches has been applied…

    • 21528 Words
    • 87 Pages
    Powerful Essays
  • Powerful Essays

    A Paper Presentation Derivative and its impact on capital market Derivative and its impact on capital market On Prepared by Ms. Vidhi Joshi Asst. Professor MBA Department T.N.Rao college of Management Studies Rajkot 1. Introduction to Derivative: The rapidity with which Indian capital market, corporate finance, banking and investment finance has witnessed a major transformation and structural change from the past one decade and this change in recent years has given birth to a new…

    • 1778 Words
    • 8 Pages
    Powerful Essays
  • Powerful Essays

    level. Changes in stock market prices, interest rate and exchange rates at the different financial market have increased the financial risk to the corporate world. In order to manage to such risks, the new financial instruments have been developed in the financial markets, which are popularly known as DERIVATIVES. As Financial Instruments, Derivatives has become very important in last two decades or so. Though the practice of using Derivatives is very old but formal…

    • 8376 Words
    • 34 Pages
    Powerful Essays
  • Satisfactory Essays

    step towards introduction of derivatives trading in India was the promulgation of the Securities Laws(Amendment) Ordinance, 1995, which withdrew the prohibition on options in securities. The market for derivatives, however, did not take off, as there was no regulatory framework to govern trading of derivatives. SEBI set up a 24–member committee under the Chairmanship of Dr.L.C.Gupta on November 18, 1996 to develop appropriate regulatory framework for derivatives trading in India. The committee…

    • 257 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Since the early ‘90s, the electrical energy sector has undergone profound and dramatic changes. More and more countries moved towards the deregulation of their energy sectors, from a regulated and monopolistic industry to one were the market forces of supply and demand determine the unit price of electricity. The first case of energy sector deregulation in Europe was recorded when the United Kingdom with the Electricity Act of 1990 created the Electricity Pool for England and Wales. Norway soon…

    • 666 Words
    • 3 Pages
    Good Essays