1. THE CITY AS A MARKET
A simple framework – Companies, banks, Institutional investors, Brokers – The nature of money – Foreign exchange – Direct investment/portfolio investment – OTC – George Soros and the ERM – Trading book – The dollar’s dominance – The financial markets – Liquidity and prices – The financial markets – Other non-financial markets – London’s historical dominance

2. WHY COMPANIES NEED MONEY
Fixed assets/working capital – Debt and equity finance – The importance of cashflow – Profitability – Business angels – Venture capital – Management buyouts and private equity – Exit routes

3. WHAT HAPPENS WHEN A COMPANY FLOATS
Different types of listing on the London Stock Exchange – The stock exchange’s viewpoint – Principal players – The company’s perspective – The listing process – Underwriting – Rights issues – The ongoing life of a public company – Corporate social responsibility

4. M&AS (AND MORE ON MBOS)
Hostile takeovers – The players – The basics of a takeover – Timetable of a takeover – Acquisition of minority interests – Stake building – Tender offers – Concert parties – Reverse takeovers – Takeover Panel and City Code on Takeovers and Mergers – Share purchase v asset sale – Auctions – MBOs in more detail – Incentives for managers and deal arrangers – LBOs

5. MY WORD IS MY BOND: DEBT SECURITIES
Bonds v loans – Bonds as bearer instruments – Fixed-income instruments – How the Eurobond market was born – Governments as bond issuers – Basis points – Rating agencies – Belgian different maturities – Bond yields

6. WHAT’S A BANK?
Commercial banks – Investment banks – Distribution and underwriting – Market making, secondary trading and proprietary trading – Principal investment – Glass-Steagall – Universal, integrated or conglomerate banks – Bancassurance – Merchant banks – Bills of exchange – Trade finance – À forfait – Accepting houses – Corporate finance and fund management – Where the big banks came from

7. MORE ON COMMERCIAL BANKING
The basics of a loan – Common banking terms – Risks – Typical loan structure – Security (not securities) – Representations and warranties – Financial covenants – Boilerplate – Events of default – Syndicated lending – Acquisition finance – Asset finance (finance leasing) – Double dips – Finance lease v operating lease – Project finance – Step-in rights – Offtake/take-or-pay – UK PFI/PPP

8. MORE ON INVESTMENT BANKING
Using their own capital – Proprietary trading, prime brokerage and principal investment – Risk and regulation – Distribution networks – Bookbuilding and bought deals – Bond terms – Legal aspects – Road shows – Bondholders’ meetings – Global bonds – Placings – Vendor placings and M&As – How privatisation led to underwriting convergence

9. MARKET WHALES – INSTITUTIONAL INVESTORS
Buy side/sell side – Insurance companies (life/casualty) – Pension funds – Trustees and actuaries – Institutional investors and private equity – Asset classes – Fund managers – Retail funds – Investment trusts – Unit trusts – OEICs and companies with variable capital – Active investment – Random walks – The Sage of Omaha – Wholesale money – Benchmarking – Passive investment (index-tracking) – Core portfolio – Fund of funds – Exchange traded funds – Asset allocation – Systemic risk, secular trends, quants and betas – Short-termism – Corporate governance – Hedge funds – LTCM

10. GOING FOR BROKE
Agency v principal – Big Bang – Banking and broking blurred – Brokers, dealers, broker-dealers and inter-dealer brokers – Mid-cap brokers – Research analysts – Conflicts of interest – Chinese walls – Soft commissions – How analysts assess companies’ shares – P/e ratios

11. MORE ABOUT MARKETS
Stock markets – Trading systems – Broking instructions – Settlement – Exchange wars – Bonds – Depositaries – Depositary receipts – Custodians – Bond yields – The yield curve – Repos – The money markets

12. BIG PICTURE: THE IMPACT OF ECONOMICS
Inflation – Deflation – How interest rates drive the markets – Strength of sterling – Why markets behave as they do – The Bank of England: what it really does – Why markets don’t always do as they should – Covered interest arbitrage

13. DERIVATIVES, SYNTHETICS AND ALL THAT JAZZ
Futures – Currency and commodity origins – Locals – Open outcry – Margin – Marking-to-market – Counterparty risk – Contracts for difference – Spread betting – Stock index futures – Dynamic hedging – Nick Leeson – Speculation and arbitrage – Weapons of mass financial destruction? – Triple witching hour – Options – Premium – Options terminology – Convertible bonds and warrants – Synthetics – Trading strategies – Interest rate swaps – Currency swaps – Credit derivatives – Total return swaps, credit default swaps and credit-linked notes

14. THE ALCHEMY OF SECURITISATION
Why loans block up bank balance sheets – Basel and capital adequacy – Turning loans into bonds – Coping with early redemption and default – Structured finance – Collateralised debt obligations

15. LLOYD’S OF LONDON & REINSURANCE
Managing agents, members’ agents and Names – Syndicates and brokers – How the market reached meltdown – Long-tail asbestosis liability – Baby syndicates – The LMX spiral – Reconstruction & Renewal – Corporate capital – Reinsurance – Alternative risk transfer – Cat bonds – Weather derivatives

AFTERWORD & BIBLIOGRAPHY – WHERE NEXT?

JARGON BUSTER