Interest Rate Products

This training is aimed at employees working in sales, markets, operations, risk management and treasury, as well as young graduates and newcomers wishing to acquire a solid understanding of interest rate products and money, bond and capital markets.

Interest rate products are at the heart of financial markets, reflecting financing conditions, monetary policy orientations and investors’ expectations. Their evolution influences the decisions of governments, companies and financial institutions, making interest rate markets a major indicator of economic and financial dynamics.

Would you like to learn more about the interest rates governing the money market and capital markets?
Would you like to understand the different types of interest rates encountered in banking and finance?
This one-day module provides an effective overview of the principles governing these products, including the main types of interest rates encountered: simple rates, compound rates, proportional rates, etc., as well as the related applications of financial mathematics.
You will become familiar with the origins of the money market and capital markets and discover their operating principles, rules and market conventions.
After covering securitisation products such as CDs, Euro-CDs and commercial paper, you will also explore the fundamental principles of repo transactions.
You will examine the main applications of these transactions for:

• Corporate clients
• Institutional clients and investment funds (UCIs)
• Retail and private banking clients
• Interbank counterparties

1. Origins of the interest rate market

• Subdivisions of financial markets
• Definitions
• Historical background
• Deregulation and integration of financial markets

2. Interest rates

• Definitions
• Types of interest rates
• Types of quotations
• Central bank policy rates
• Market rates (interbank rates)
• Reference rates (ESTER, EURIBOR, LIBOR, etc.)

3. Day-count bases, conventions and market practices

• Calendar days / business days
• Dates
• Interest payment methods
• Day-count calculation conventions
• Date adjustment conventions

4. Main interest calculations

• Simple interest
• Rates used in the money market
• Proportional rates
• Equivalent rates
• Calculation of future value (simple interest paid in arrears)
• Calculation of initial capital (simple interest paid in advance)
• Compound interest

5. The money market

• Money market instruments
• Over-the-counter market operating 24/7
• Money market participants
• ISO currency codes

6. Money market rules and conventions

• Market conventions
• Transaction periods
• Practical exercises using the foreign exchange calendar
• Quotation
• Cash position

7. Money market products and instruments

• Time deposits
• Fiduciary deposits
• Notice deposits
• Interbank deposits
• Repos
• Certificates of deposit
• Euro-CDs
• Commercial paper

8. Numerical example of a time deposit
9. Appendix

The course is offered in a blended-learning format. Participants receive access to a preparatory e-learning course 5 days before the classroom session.