An Introduction (and Survival Guide) to Wholesale Global Banking, Trading Desks and The Capital Markets

The book's Preface as published

This book is intended as a ‘Course 101’ text for the study of institutional banking and finance. It will not cover everything you might find in a big bank or international stockbroker but it will cover the ‘why’, who’, ‘where’ and ‘how’ questions that should allow you to understand the reasons, and the jargon, around which global banks function.

As to who should read it - well anyone wanting to get up to speed with or wanting to break into the area. Banking and stock broking can present an intimidating wall of specialist language to un-nerve the new-comer. Whatever your reason: education; because you work in ancillary areas such as IT, Management Consultancy or Personnel; are joining or thinking of joining a bank or are moving divisions within a bank, this book will make your immediate survival a great deal more probable. It is written with a view to explain the products sold by each of the main Bank divisions and how those divisions are structured and serviced.

The markets are covered in some detail. I have tried to capture something of the motivation, personality, mindset and humour of the players involved. As far as possible I have tried to create realistic scenarios to put the concepts into contexts that might well be encountered although, of course, life in a bank constantly throws-up new challenges. It is very much a hands-on book about what people actually do in large banks. No mathematical formulae are used (beyond basic arithmetic) since formulae can cause readers to want to throw the book in the bin. I do use a lot of diagrams because I believe, for many, they clarify the processes. The first part of the book deals with bank organization and trading principles. The middle part deals with the product and major service divisions usually found in big banks. The last part of the book deals with how Banks implement change, particularly in IT. It can be argued that this area is not specific to banking (the techniques are used in many industries). It has been added because it is increasingly difficult to be a broad spectrum banker without getting regularly involved with the IT side of the bank. It will not make you a programmer or a Project Manager but you should understand better the jargon and the concepts the team is trying to get at. You might even get to influence how change is implemented. I hope the section will act as a bridge between the business and IT just as the rest of the book should help bridge IT and business.

Reader nationality should not be a problem. Global banks do have local customs and values but anyone working in a New York based global bank would instantly recognise a London, European or Far Eastern one as a substantially similar institution. Far more unites them than divides. International stockbrokers have many of the same characteristics as the banks in their trading areas and hence the book covers much that they do.

Why buy this book? Isn’t everything on the web? Well, sort of; but in a topic as wide as the capital markets and banking you need a road map otherwise you will spend months trying to fit it all together. This book will give you a framework which will make going further via the web or your local financial library so much easier.

What is not covered in the book is ‘Retail Banking’, whether branch banking or small-size security trading to individuals. Both areas do impact on wholesale banking occasionally but they are quite different animals to their global cousins. Service divisions such as Personnel, Property or PR are not covered and some divisions that may be locally quite important (such as electronic payments, shipping finance, correspondent banking etc.) are treated as part of their bigger more general functional division. This book concentrates on the money bits of the bank – borrowing it, lending it, buying and selling securities, getting fees for advice and manipulating it through derivatives. Some areas commonly found in global banks are really part of separate industries, such as Asset Management. Coverage, here, is restricted to their impact on the Capital Markets. For instance, Equities are covered to the extent of issuance and trading techniques but not the running of portfolios or other asset management aspects. The book will not tell you how to make millions out of the stock market but I hope it will explain how banks make millions out of people who try to.

Global banks are set up to serve global customers who command service levels well in excess of what is usually available locally to retail. The customers are also finely attuned to competitive offers and alternative strategies. So these banks have to work with them to produce intelligent pricing on their product lines and continually strive for product innovation. Enormous changes have taken place in the last 30 years. There is no sign of this abating in the near future. I hope the book provides a platform against which further changes can be judged and evaluated in context.

William Rollet is the pen-name of a Brit who has spent most of his working life as a senior manager in or around the trading rooms of large banks and international stockbrokers. I have been an investment manager, bond salesman, a trader and an inventor of specialist capital market products. Additionally I have worked as a money broker, a commercial banker, wrote some of the first serious yield analysis software of the PC era, been a computer programmer and for last few years - a management consultant to large banks advising on management accountancy issues and new trading systems. Training new personnel was usually an integral but secondary part of the job. The range of jobsI have done is wide. This is not because I am prone to getting sacked, but because I have been around for a very long time; a relic of a time when bank managements thought that appointing managers from outside of the immediate job specification would bring better and wider overall experience to the task in hand.