Effective Product Control

Effective Product Control
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The best plan is useless without effective execution The future of business has become so unpredictable that your five-year plan may be irrelevant next week. To succeed in the modern market, you must constantly assess your progress and adapt on the fly. Agility, flexibility, continual learning, and adaptation are the new rules of business success. A differentiating strategy is crucial, but it will only lead to competitive advantage if you execute it flawlessly. You'll succeed only if you have the right insight for strategic planning and the agility to execute your plan. Balanced Scorecard Evolution: A Dynamic Approach to Strategy Execution provides the latest theory and practice from strategic planning, change management, and strategy execution to ensure your business is flexible, future ready, and primed for exceptional execution. Author Paul R. Niven guides you through the new principles of The Balanced Scorecard and shows you how to apply them to your planning and strategy execution endeavors. Read case studies that illustrate the theory and practice of strategic agility and execution Learn how to create the objectives, measures, targets, and strategic initiatives that can make your plan a reality Use the latest change management techniques to boost strategy execution success Gain the knowledge and tools you need to face your challenges head-on Motivate your employees to change behaviors toward plan accommodation Making a plan isn't enough. You must actually take steps to implement your plan, and this requires excellent leadership skills. Change can be hard, and your organization may be resistant. Balanced Scorecard Evolution: A Dynamic Approach to Strategy Execution provides everything you need to make things happen.

Оглавление

Nash Peter. Effective Product Control

Preface

Acknowledgements

About the Author

Part 1. Working in Product Control

CHAPTER 1. An Introduction to Product Control

The Emergence of Product Control

The Purpose of Product Control

Different Types of Product Control

Skills, Qualifications and Experience

Organizational Structure

The Desk

CHAPTER 2. Changing Landscape of Product Control

Offshoring

XVA

Greater Levels of Capital

Greater Focus on Liquidity

CHAPTER 3. Key Stakeholders

Front Office: Sales and Trading Desk

Chief Operating Officers (COOs)

Operations

Middle Office

Market Risk

Financial Reporting

Management Reporting

Finance Change

IT

Operational Risk

Regulatory Reporting

Accounting Policy

Tax

Audit

Finance Shared Service

Summary

Part 2. Technical Skills

CHAPTER 4. Accounting Standards: Recognition and Measurement

IAS 39 Financial Instruments: Recognition and Measurement

CHAPTER 5. Market Risk

What Is Market Risk and How Is It Generated?

How Is Market Risk Measured by a Bank?

CHAPTER 6. Pricing Financial Instruments

How to Approach the Pricing of a Financial Instrument

Pricing examples

CHAPTER 7. Internal Control

What is Internal Control?

Establishing an Internal Control Framework

Example of Front to Back Internal Controls

Part 3. Profit and Loss Controls

CHAPTER 8. System Feeds, End of Day Rates and Profit and Loss Estimates

System Feeds

End of Day

End of Day Rates

P&L Estimate

CHAPTER 9. Review of New and Amended Trades

New Trades

Amended Trades

CHAPTER 10. Review of Mark-to-Market P&L

Defining Mark-to-Market P&L

Attributing MTM P&L

Risk-Based P&L estimates

Changes in the End of Day Prices

When to Validate the MTM P&L

CHAPTER 11. Funding, Fees and Charges

Funding

Fees and Charges

CHAPTER 12. Profit and Loss Adjustments

The Need for P&L Adjustments

Controlling P&L Adjustments

CHAPTER 13. Profit and Loss Commentary

Who Is the Reader?

When Is P&L Commentary Required?

CHAPTER 14. Profit and Loss Reconciliations and Sign-Offs

Flash vs. Actual

Desk P&L Sign-off

P&L Reconciliation

Part 4. Valuations

CHAPTER 15. Independent Price Verification

Components to IPV Process

CHAPTER 16. Valuation Adjustments

Why Valuation Adjustments Are Required

Bid–Offer

Day 1 Reserves

Model Valuation Adjustment

XVA and Collateral Agreements

Recording and Reporting of VAs

Part 5. Balance Sheet Controls

CHAPTER 17. Balance Sheet Substantiation and Analysis

Substantiating the Balance Sheet

Frequency of the Balance Sheet Substantiation

Evidencing the Balance Sheet Substantiation

Unsupported Balances

Lines of Responsibility

CHAPTER 18. Dividending of Profit and Loss and FX Selldown

CHAPTER 19. Controlling Nostros

Introduction to Nostros

Controlling Nostros – Cash Breaks

Risk-Weighting Cash and AVE breaks

Provisioning for Nostro and AVE Breaks

Part 6. Financial Accounting and Reporting

CHAPTER 20. Financial Accounting Entries

Financial Accounting Entries

Chart of Accounts

Accounting Rules Engine

CHAPTER 21. Financial Reporting and Note Disclosures

Context of Financial Reporting

Profit and Loss

Balance Sheet

Netting

Fair Value Hierarchy

Part 7. Supplementary Controls

CHAPTER 22. New Product Proposals

Starting Line

The Review

The Sign-Off

CHAPTER 23. Rogue Trading

The Forefathers of Rogue Trading

The Fallout from Rogue Trading – The Bank

The Fallout from Rogue Trading – The Industry

Going Rogue

UBS Rogue Trading Incident, 2011

Index

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Effective Product Control

Controlling for Trading Desks

.....

The type of analytical work can vary at each bank, but typically the controller will analyse those components of the financials which can have a significant influence on the behaviour of the desk. This can vary quarter by quarter, but some examples include balance sheet usage, brokerage fees, capital, liquidity, return on assets, and so on.

Additionally, the controller will spend more time analysing the health of the control framework in finance to ensure the level of operational risk is not excessive. You could say that this role is becoming more akin to a CFO role.

.....

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