Cover -- Contents -- Preface -- Private banking -- Private banking defined -- Introduction -- Private banking clients -- Organizational challenges in private banking -- Security and secrecy requirements -- A private banking roadmap -- Household debt and private banking -- The ownership society's recycling pattern -- Synergy of private banking and institutional investments -- Know your customer and his or her profile -- Introduction -- The sense of 'know your customer' -- A system approach to wealth management -- Wealth management according to client profile -- Why knowledge engineering can assist the investor -- A financial advisory expert system for currency exchange -- Caveat emptor and reputational risk -- Who is accountable for failures in fund management? -- Business opportunity: fees and commissions from private banking -- Introduction -- Trades, investments and private banking customers -- Establishing a strategy for fees and commissions -- Unbundling the management fee -- Different companies have different private banking aims -- Performance and remuneration of investment managers -- Simulation of portfolio performance -- The impact of business risk -- Risk and return with investments -- Introduction -- Basic notions of risk assessment -- Mitigating the risk of losses -- Prerequisites for rigorous risk control -- Fine-tuning the philosophy of investments -- Risk and return with implied volatility -- Risk-adjusted pricing: an example with credit risk -- An introduction to stress testing -- Asset management -- Asset management defined -- Introduction -- Asset management and capital mobility -- Asset allocation strategies -- Asset allocation and the shift in economic activity -- Real estate property derivatives: a case study -- Passive and active investment strategies -- A critical view of alternative solutions.

The portfolio's intrinsic value -- Business models for asset management -- Introduction -- Choosing the investment manager -- Don't kill the goose that lays the golden egg -- The contribution to asset management by contrarians -- Asset management as an enterprise -- Hedging strategies followed by portfolio managers -- Deliverables and performance in administration of assets -- Past performance is no prognosticator of future results -- Outsourcing and insourcing wealth management -- Introduction -- Risk and return with outsourcing -- Internal control and security are not negotiable -- Custody only, mid-way solutions and discretionary powers -- Building up the investor's portfolio -- The option model of investing -- Efficiency in private banking and asset management -- The private banking profit centre -- Trust duties and legal risk -- Introduction -- Trusts and trustee responsibilities -- Legal risk and the case of tort -- Reasons behind legal risk and cost of litigation -- Legal risk and management risk correlate -- Mishandling the client: small cases that can lead to legal risk -- Big cases of legal risk: high-tech crime and identity theft -- Merck and Co.: legal risk with Vioxx -- Derivative financial instruments, structured products and risk control -- Derivative financial instruments defined -- Introduction -- Derivatives and hedging -- Underlying and notional principal amount -- From notional principal to financial toxic waste -- Derivatives that became institutionalized -- Private banking derivatives and the paper money trauma -- Dr Alan Greenspan on derivatives and the case of hedge funds -- George Soros on derivatives -- Structured financial products -- Introduction -- Structured products and capital protection -- Structured versus synthetic products -- The role of strategists, traders and modelling controllers.

Aftermath of design factors on risk profile -- Structured investments are not liquid -- A secondary market for structured instruments -- Dynamic threshold mechanism -- Controlling the risk taken with structured products -- Introduction -- Credit risk and exposure at default -- Credit risk transfer and hazard rate models -- Credit risk volatility and bond spreads -- A case study on General Motors -- Liquidity risk in an ownership society -- General and specific market risk -- Stockmarket bubbles and damage control -- Risk management and the 'Greeks' -- Case studies with the three main classes of structured products -- Fixed income structured products -- Introduction -- Fixed interest structured products defined -- Constant proportion portfolio insurance -- FISP versus CPPI: a comparative study -- Borrowing through issuance of derivatives -- Capital protection notes and bondholders' risk -- Structured instruments with underlying credit risk -- Embedded derivatives for the ownership society -- Practical examples with fixed income derivatives -- Introduction -- Money rates, money markets and financial instruments -- Inflation-linked notes -- Stairway notes (step-ups) -- Callable reverse floaters -- Accrual notes -- Fixed and variable rate notes -- Bull notes -- Equity-type structured products -- Introduction -- Headline risk and the nifty-fifty -- Equity derivatives defined -- Players in equity derivatives -- Risks taken with analytics -- Criteria used for dynamic rotation -- Equity derivatives swaps -- The use of embedded barrier options -- Practical examples with equity-type derivatives -- Introduction -- Equity index and basket structured notes -- Absorber certificates -- Early repayment certificates -- Enhanced yield certificates -- Reverse exchangeable certificates -- Potential share acquisition certificates -- EUR complete participation securities.

US dollar non-interest-bearing note linked to equity -- The strategy of pruning the basket and reallocating securities -- Currency exchange structured products -- Introduction -- Currency transactions and economic exposure -- Exchange rate volatility and risk control -- Mismatch risk and carry trades -- Forex rates and structured instruments -- Dual currency structured products -- A US dollar/Asian currency basket and a forex benchmark fund -- Conclusion -- Appendix: Derivatives as a tax haven -- Introduction -- Wealth tax -- Derivatives, offshores and private individuals -- Companies have been masters in using derivatives and offshores -- Shifting the risk with no return to the household sector -- Cynics look at the private banking client as a cash cow -- Index.