Financial Market, Entrepreneurial Economy and Studying Finance · Financial Market, Entrepreneurial Economy and Studying Finance Prof. Dr. Marco J. Menichetti ... the more important

Financial Market, Entrepreneurial Economy and Studying Finance

Prof. Dr. Marco J. MenichettiChair in Business Administration, Banking and Financial Management

Institute for Finance

[email protected] 2017

Menichetti, October 20172

Outline

What is a Financial Market?

Liechtenstein: Entrepreneurial Economy and Financial Market

Studying Finance in Connection with an Asset Management Hub


Outline



Studying Finance connected to an important Asset Management Hub



Financial Centers

Financial Intermediaries/ Institutions

Regulation and Market Supervision

Financial Markets


Financial Markets

Financial Markets• Bond Markets• Stock Markets• Foreign Exchange Markets• Markets for Alternative Investments• International Financial Markets

Structure of Financial Markets• Primary and Secondary Markets• Exchanges and Over-the Counter Markets• Money and Capital Markets• Spot and Forward Markets

Source: Mishkin & Eakins (2016).


Financial Center Geographical location (1) that has a heavy concentration of financial institutions, (2) that offers a highly developed commercial and communications infrastructure, and (3) where a great number of domestic and international trading transactions are conducted. London, New York, and Tokyo are the world's premier financial centers.

• Regional, national, international financial center• Global financial center: direct access from all over the world• Niche financial centers: Corporate Finance, Asset

Management, FX, Derivatives, Trade Finance, Project Finance etc.

• Onshore vs. offshore financial centersSource: Zomoré (2007); Mishkin & Eakins (2016).

Leading Wealth Management Centers (2015) -International Private Client Market Volume

MARKET VOLUME (IN USD TRILLION AND AS PERCENTAGE OF MARKET SHARE)

Source: Deloitte (2015).

Growth in Wealth Management Market Volume (AuM, 2008-2012 and 2012-2014)

CHANGE IN INTERNATIONAL MARKET VOLUME FOR TWO PERIODS

Source: Deloitte (2015).


Financial Intermediaries and Institutions

Financial Intermediaries: Entities that intermediate between providers and users of financial capital.

Two types of information reusabilityCross-sectional: The same information can be utilized across different usersIntertemporal: The same information can be reused through time

For a given attribute, the larger the grid, the more compelling the need for the brokerFor a given size grid, the less readily observable the attribute (the more subtle the signal), the more important the skills and reputation of the broker, e.g., phone books vs. security analysts or loan officers

Source: Greenbaum, Thakor, & Boot (2016).


Services provided by Financial Intermediaries



Financial Institutions

• Banking Industry• Mutual Fund Industry• Insurance Companies and Pension Funds• Investment Banks• Venture Capital and Private Equity Firms• Hedge Funds• Security Brokers and Dealers• etc

Source: Mishkin & Eakins (2016).


Regulation and Market Supervision

Objectives of Regulation• Safety and soundness of individual institutions• Stability of the financial system• Market structure and competition• Consumer protection• Credit allocation• Monetary control



Outline





OverviewArea

Capital

Inhabitants

Currency

Official Language

Head of State

Head of State (regent)

Head of Government

Export of goods

GDP (nominal)

GDP per capita

GNI

GNI per capita

Religion

160 km² / 61.8 mi² (6th smallest country worldwide)

Vaduz

37‘810 (2016)

Swiss Francs (CHF)

German

Prince Hans-Adam II. of Liechtenstein

Hereditary Prince Alois of Liechtenstein

Prime Minister Adrian Hasler

3'453 million CHF (2014)

6‘105 million CHF (2014)

163‘384 CHF* (2014)

4‘962 million CHF (2014)

132‘795 CHF (2014)

80% Roman Catholic, 7.3% Protestant

Source: Statistical Office Liechtenstein * approximately 50% inward commuters employed


Relationships

Switzerland – Liechtenstein Liechtenstein – European Union

Customs Union with Switzerland since 1923

Since 1921 Swiss Franc is used as the official currency

Currency Union Treaty with Switzerland signed in 1980

> National Bank of Switzerland is also the centralbank of Liechtenstein

Liechtenstein is official EFTA member since 1991

Liechtenstein is part of EEA since 1995

EEA is formed by the 28 EU-members plus Liechtenstein, Iceland, Norway;

Switzerland is not member in the EEA

The freedom of movement for goods, services, persons (with restrictions) and capital within the EEA is applicable in Liechtenstein

Source: Office of Economic Affairs Liechtenstein


Facts and Figures – Employment

Total Employedof which are:

Residents EmployedInward Commuters

Full TimePart Time

Full Time Equivalentsof which are:

MenWomen

LiechtensteinersForeigners

employed in:Sector 1 (agriculture)

Sector 2 (industry)Sector 3 (services)

37‘453 (100%)

17‘214 (46.0%)20‘239 (54.0%)

26‘864 (74.2%)9‘360 (25.8%)

32‘122 (100%)

20‘893 (65.0%)11’229 (35.0%)

9‘545 (29.7%)22‘576 (70.3%)

221 ( 0.7%)13‘486 (42.0%)18’415 (57.3%)

Source: Statistical Office Liechtenstein (2016)

Distribution of Employment in Liechtenstein


Facts and figures - Employment


Total Employed

Inward Commuters

Total Employed and Inward Commuters


Employment – Comparison

Employment Structure

Liechtenstein Switzerland Austria Germany Luxembourg

Resident Population 37‘810 8‘417‘700 8‘772‘865 82‘175‘700 590‘667

Total employed 37‘453 4‘604‘000 4‘220‘000 43‘595‘000 405‘700

% of inward commuters 54.0% 6.9% 43.0%

Quota (total employed toresident population)

99.1% 54.7% 48.1% 52.1% 68.7%

Employment Distribution


Sector 1 (Agriculture)

Sector 2 (Industry)

Sector 3 (Services)



Gross Domestic Product comparison

Source: World Bank (2016), CIA Fact Book,Statistical Office Liechtenstein (2016)


Area in km2

Liechtenstein compared to (in %)160

(100.00%)41‘277

(0.39%)83‘871

(0.19%)357'022

(0.045%)2‘586

(6.19%)

GDP nominal (2014) in billion current USD

Liechtenstein compared to (in %)

6.66 (100.00%)

702.71(0.95%)

438.38(1.52%)

3’879.28(0.17%)

66.30(10.05%)

GDP/capita (2014) in current USD

Liechtenstein compared to (in %)

179‘478.6(100.00%)

85’814.6(209.15%)

51’322.6(349.71%)

47’902.7(374.67%)

119’172.7(150.60%)

Resident Population (2016)Liechtenstein compared to (in %)

37‘810(100.00%)

8‘417‘700(0.45%)

8‘772‘865(0.43%)

82‘175‘700(0.05%)

590‘667(6.40%)

Currency Swiss Franc (CHF) Swiss Franc (CHF) Euro (EUR) Euro (EUR) Euro (EUR)

Official Language GermanGerman, French,

Italian, Rhaeto-Romanic

German GermanFrench, German,

Luxembourgish


Financial Market Liechtenstein

Source: Liechtenstein Bankers Association

Banking Sector (Liechtenstein Bankers Association, LBA): 16 banks

Insurance Sector (Liechtenstein Insurance Association, LVV): 33 insurance companies

Investment Fund Sector (Liechtenstein Investment Fund Association, LAFV): 17 companies

Asset Management Sector (Association of Independent Asset Managers in Liechtenstein,

VuVL): 86 members

Professional Trustees and Fiduciaries Sector (THK): 396 companies

Financial Market Authority (FMA)

Financial Intermediaries and Authorities in Liechtenstein

Current Challenges for the Liechtenstein and Switzerland Financial Centers

58 %

5 %

26 %

11 %

Banking regulation

Bad debts

Digitalization

Margin pressure

Source: Finance Forum Liechtenstein 2017


Large potential of specialists and experts from Switzerland, Austria, and Germany

Stable social, legal, and economic order

High degree of political continuity and stability

Liberal economic policy and company law

Moderate corporate taxation

Solid financial policy of public budgets

Free access to markets in Europe

Manageable size

Flexibility and short decision-making paths

Large capital power of the public sector

AAA country rating by Moody's and Standard & Poor's

Niche products compatible with European law

Advantages in Liechtenstein

Source: Finance Liechtenstein

The Liechtenstein Financial Market


Literature

Deloitte (2015). The Deloitte Wealth Management Centre Ranking 2015. Zürich: Deloitte Consulting AG.

Greenbaum, S.I., Thakor, A.V., & Boot, A.W.A. (2016). Contemporary Financial Intermediation (3rd ed.). Amsterdam: Elsevier.

Mishkin, F.S., & Eakins, S.G. (2016). Financial Markets and Institutions (8th ed.). Boston: Pearson.

Zomoré, A. (2007). Concepts of Offshore Financial Centers: In Search for an Operational Definition. IMF Working Paper WP 07/87, Monetary and Capital Markets Department. Washington: International Monetary Fund.

Internet Sources: CIA Factbook; Finance Liechtenstein - www.finance.li; Financial Market Authority Liechtenstein; Office of Economic Affairs Liechtenstein; Statistical Office Liechtenstein (2016); World Bank (2016)

http://www.finance.li/


Outline




12-month-season for sports and leisure

38‘000 career opportunities inLiechtenstein

Among the most peaceful countries on earth: Austria #4, Switzerland #5(no data for Liechtenstein, © Institute for Economics and Peace 2013)

1000 students only

1:12 lecturer/student-ratio(average for BSc and MSc programs)

2 BSc, 4 MSc, 2 PhD programs in Business Economics and Architecture

Excellent prospects.Welcome to the University of Liechtenstein.

Master of Science in Finance (MSc)

Duration 4 semesters (full-time programme)

Credits 120 ECTS

Language English

Tuition fees CHF 850.– per semester

Lecture days Tuesday, Thursday, Friday, occasionally Saturday

The department of Business Economics is in the process of AACSB accreditation, which is scheduled to be obtained (latest) in 2019.

Why study Finance in Liechtenstein?> In the heart of Europe with international finance and business know-how

> Programme Focus: Risk and Asset Management, International Finance

> Programme entirely in ENGLISH, excellent employment rates of our graduates

> Personal learning environment through low professor/student-ratio

> Member of the CFA University Recognition Program, CFA Institute Research Challenge

> Member of the GARP partnership of risk education

> Projects and MasterLABS with the financial industry (i.e. asset management firms, banks, insurance companies, Fintech companies, Financial Market Authority)

> International study group of around 40 students

> Educational journey to leading financial centers in the world

> Suitable preparation for a PhD program

> Attractive tuition fees (state-funded); 2 scholarships per year by LGT Foundation

Semester structure

Fundamentals1st semester

2nd semester

3rd semester

4th semester

Engl

ish

This MSc in Finance has been accepted into the CFA Institute University Recognition Program, as the programme covers at least 70% of the CFA Program Candidate Body of Knowledge (CBOK). 15 partial scholarships per year are provided for Master students, who wish to pass the CFA exam level 1 – 3.

This MSc in Finance also has been accredited by GARP (Global Association of Risk Professionals) as a partner in risk education. 1 full scholarships can be offered to students for the FRM/ERP exam.

Master Thesis

Investments

Risk and Asset Management

12

0

ECTS

Cross-facultyelectivesubjects

(12 ECTS)

Curriculum – MSc in Finance

https://www.uni.li/de/studium/gut-zu-wissen/download-center/programme-structure-msc-finance.jpg

https://www.uni.li/de/studium/gut-zu-wissen/download-center/programme-structure-msc-finance.jpg

The CHAIRS you are dealing with

Banking and Financial Management

Exchange Rate Risks

Equity Investment Management

Sustainable Investments

Finance

Quantitative Finance

Empirical Finance

Behavioural/Experimental Finance

Prof. Dr. Marco J. Menichetti

Prof. Dr. Michael Hanke

Prof. Dr. Marco J. MenichettiAcademic Director

Florian Schaller, MSc

Executive Director, MSc in Finance Hilde Zimmermann

Programme Administrator

Additional Offers

> LGT University Scholarship

> CFA Exam Scholarships

> Participation in CFA Institute Research Challenge

> GARP Exam Scholarship

> Banking Award Liechtenstein

> Career Day in Finance –Workshop with leading employers of the financial industry

> Extracurricular Activities:

> After Work Lectures for Asset and Investment Professionals

> Participation in Workshops and Conferences organised by Liechtenstein House of Finance

Professional Career Paths

> Asset and Capital Management Firms, Wealth Management

> Banks and Central Banks

> Insurance Companies

> Investment Undertakings

> Financial Advisors and Family Offices

> Finance Departments of non-financial Companies

> Consulting Firms

> Regulatory Authorities and Financial Market Authorities

20% of our graduates find their job within Liechtenstein, another 20% within the region. Until now, every graduate had a job by graduation.


Partner companies and career opportunities (choice)

Educational Journey 2018 New York:

Banks, Asset Management companies,

United Nations, Princeton University, NYSE, SEC,…

Excursion:

• Portfolio Management Game at a foreign university

• Banking Game in cooperation with Kosminski University,

Warsaw.

Educational Journeys & Excursions

Hong Kong & Singapore, 2017

Beijing & Shanghai, 2015

New York & Chicago, 2013

Singapore & Kuala Lumpur, 2011

Finance Alumnis - go international

Viktor Tsekov MSc Counterparty Risk

DepartmentBarclays Investment Bank

LONDON

Anete Berzina MSc Economist at

Bank of LatviaRIGA

Dirk Frohnert MSc Portfolio Manager at

JPMorgan Asset Management

LONDON

Patrick Prinz MSc Analyst Corporate and Investment Banking at

Citigroup N.A. ZURICH

Anke Sielker MScSenior Business Development

AssociateAIR Worldwide

MUNICH

Jiri Chroustovsky MSc Real Estate Advisory at

Deloitte PRAGUE

Sebastian Venc MSc Investment Banking Analyst at Robert W. Baird & Co. FRANKFURT

Plus many alumni with Liechtenstein financial services companies (LGT, LLB, VPBank, Raiffeisen Bank Liechtenstein, Valartis Bank, insurance companies, assetmanagement firms, market authority etc.)

Thomas Gartlacher, MSc, Treasury Department, Risk ManagerHilti AG VADUZ

Marina Vasileva MScFund Officer at

CAIAC Fund Management

VADUZ

Admission requirements

> Bachelor’s degree or an equivalent diploma degree in Business Administration, Economics, etc. with at least 180 ECTS.

> Performance above average in the undergraduate study programme

> English language skills at proficiency level B2 (CEFR) is required (level C1 is desirable) if your mother language is not English

> Academic writing skills

> Motivation for the chosen Master

Application and admission procedure

Online application www.uni.li/master-finance

Application 30th June – EU/EEA and Swiss citizensdeadline 31st March – citizens from other countries (a visa for

Liechtenstein is required)

Personal interview we want to get the full picture

Application on www.uni.li/master-finance

http://www.uni.li/master-finance

Master‘s degree programmes in Liechtenstein

Bu

sin

ess

Eco

no

mic

s

Finance

Entrepreneurship

Master / MSc

Information Systems

Online application Application deadline

www.uni.li/master-finance

www.uni.li/master-ent

uni.li/master-information-systems

Contact

Dr. Matthias [email protected]

Winter intake ONLY

30. June EU/EEA + Swiss citizens31. March citizens from other countries

www.uni.li/master-ar

Winter30. June EU/EEA + Swiss citizens31. March citizens from other countries

Summer30. Nov. EU/EEA + Swiss citizens30. Sept. citizens from other countries

Prof. Peter [email protected]

Architecture

Florian Schaller, [email protected]

Roope Jaakonmäki, [email protected]

mailto:[email protected]




Student organisations

> Organize sporting and cultural activities, participation in international competitions, socialactivities and parties

> Provide support in academic life and career opportunities

Join the conversation!

www.facebook.com/uni.li

@uni_li #unili

www.youtube.com/user/UniLiechtenstein

instagram.com/uni_li #unili

linkedin.com/company/universit-t-liechtenstein/

Principality of Liechtenstein


Two Events for prospective Students

University Information DaySaturday, 25.11.2017, 13:00 – 17:00Visit the University, have a personal talk with Finance students and meet the study directorate.

Try Out – Get your own PictureFriday, 23.02.2017, 9:00 – 14:00 Visit regular lectures in the morning, have lunch with students and meet the study directorate.


www.uni.li

Thank you!Contact: [email protected]

Documents

Financial Market, Entrepreneurial Economy and Studying Finance · Financial Market, Entrepreneurial Economy and Studying Finance Prof. Dr. Marco J. Menichetti ... the more important