The Banking Sector and the Capital Market

When talking about financial markets it is important to differentiate between the two major types that exist: the primary or emissions markets and the secondary markets. The primary ones are the issuance of securities, when they go on sale for the first time; while the secondary ones are the exchange of securities previously issued and that are already in the possession of investors. The most important secondary market of all is the stock market. Toronto’s Sean St. John has spent the last 25 years of his professional career working in the banking and financial industry. Sean St. John currently serves as the Executive Vice President and Co-Head of Fixed Income, Currencies & Commodities at National Bank Financial in Toronto, Canada.

Equities:

The most popular are the shares, titles that represent a percentage of ownership over the capital of a company. As the name implies, the variable income does not guarantee to receive an income in the future.

Like the rest of non-banking financial intermediaries, the stock market is a financial market in which savers, who offer their savings are contacted, and investors, who need the resources of the previous ones, in exchange for the corresponding securities. ; In this case, the actions of the companies.

Other non-bank financial intermediaries

As we pointed out a bit above, the Stock Exchange is the most important non-banking financial intermediary, although not the only one. Let’s briefly review the operation of the others:

Insurance companies

They issue insurance policies, contracts by which the insurer is obliged in case of a certain event to compensate the insured. This is done, logically, in exchange for a premium.

Private  pension funds:

 During their working life, members of mutual societies make periodic contributions to their pension plans to supplement public pensions for retirement paid by Social Security.

Companies and investment funds:

They are groups of investors that are associated to access with more facilities to the Stock Exchange.

Leasing companies:

They are in charge of financial leasing or leasing, a financing system through which companies can incorporate, on a rental basis, a capital asset in exchange for a periodic lease installment

Factoring companies:

It is another form of business financing that consists of selling the rights pending collection to a company that, providing immediate liquidity to the company that gives such rights and in exchange for a commission, is in charge of making such collections effective.

Investment service companies:

They can be brokers , if they only contact buyers and sellers of highly liquid assets; or dealers , if they also buy and sell on their own.

Mutual guarantee societies:

They allow their associates, usually SMEs, access to financing by acting as guarantors of the loans they obtain.

In short, continuing education is vital in the sector, being able to provide specialized study centers in the subject, either in the form of specific courses of recycling or longer-term master’s courses.

The following table shows some interesting courses to offer workers in the sector:

  • Banking products: active and passive
  • Personal and private banking: best business practices
  • Business banking: best business practices
  • Analysis of credit risk with individuals and businesses
  • Credit risk and Bankruptcy Law
  • Analysis of credit risk with SMEs
  • Analysis of credit risk with companies
  • Risk monitoring and prevention of delinquency
  • Investment funds
  • Portfolios
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