Basel I Minimum Capital Requirements

In the business of taking risk on both sides of the balance sheet, holding capital is necessary to provide protection against unexpected losses. This is not the same as expected losses, which are covered by provisions, reserves and current year profits. Basel I map out the risk weights for any credit (counterparty) exposure for on-balance sheet assets, as well as further... Continue Reading →

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FRM part I review (May 2017, Singapore)

Finally, after weeks of intensive study of financial concepts from a non-finance major undergraduate, I managed to get through this. Why FRM, not CFA? If you take a look at the FRM 2017 learning objectives, you will realise that GARP does not make reference to books from CFA (the exam provider herself) but references authors who are... Continue Reading →

Reconciling interest rate parity and the real world

We all ever once heard contributors at Bloomberg talked about ineffectiveness of the Taylor rule to prompt Fed hiking earlier, or your macroeconomics professor talking on Purchasing Power Parity and Interest Rate Parity. Seems like a knowledge that would allow an undergraduate to make side incomes from tracking the rate differential. But that's unlike reality... Continue Reading →

Non-Farm Payroll (NFP) Part I

What's NFP? NFP indicates the net hiring/firing of non-farmer workers for the previous month. It is published by the Bureau of Labour Statistics, usually on the first Friday of the month, in the Employment Situation Report. Some traders would lament that the attention shown on a headline figure is overstated. NFP headline and report significance really... Continue Reading →

A simple view of sector rotation

Continuing when my previous post here, market cycles leads economic cycle. This article aims to give a brief descriptive (not predictive) overview of how asset managers shift their exposure to sectors - according to the current style of investment, say, growth strategy - where expectations of future earnings revision are very positive - or in defensive... Continue Reading →

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