Module 7 - Treasury and Money Market Operations Flashcards
Refer to the buying and selling of government securities, lending/borrowing against underlying assets as collateral, accepting of fixed term deposits, and other monetary instruments of BSP aimed at influencing the underlying demand and supply conditions for money.
Money operations
refers to the Bangko Sentral’s monetary instrument where the Bangko sentral sells government securities with a commitment to buy them back at a later date.
Reverse Repurchase Agreements
is a bangko sentral standing facility which allows counterparties to obtain overnight liquidity from the Bangko Sentral on an open-volume basis against eligible collateral.
Overnight Lending Facility
is a bangko sentral standing facility which allows banks to place overnight deposits with the bangko sentral.
Overnight Deposit Facility
is a key liquidity absorption facility of the Bangko Sentral used to withdraw liquidity from the system in bulk.
Term Deposit Facility
may be a significant source of operational risk, apart from giving rise to market, liquidity and credit risks.
treasury activities
refer to debt and equity securities, hybrid securities, derivatives, securitization structures and similar products with substantial investment characteristics.
Financial products
a person engaged in the business of buying and selling securities for the account of others.
Broker
a person who buys and sells securities for own account in the ordinary course of business.
Dealer
refer to financial products whose terms, features and risks are not reasonably likely to be understood by a non-sophisticated client because of their complex structure
Complex products
funds or amount of exposure to be hedged.
Investment amount
the client’s financial standing, which includes information on assets, net worth, financial commitments, regular income and capacity tio withstand losses.
Financial situation
the client’s knowledge and understandfng of the financial markets and products and the risks involved therein.
Knowledge of financial products
the nature of investments and/or derivatives transactions undertaken by the client.
Investment/hedging experience
the client’s goal or purpose for entering into a transaction, whether it be for regular income, capital appreciation, capital preservation, maintenance of purchasing power, hedging as against investment.
Financial objectives
the client’s goal or purpose for entering into a transaction, whether it be for regular income, capital appreciation, capital preservation, maintenance of purchasing power, hedging as against investment.
Financial objectives
the level of risk a client is willing to take
Risk appetite
the length of time over which the position or exposure to be hedged will be held by the client.
Holding period/investment horizon
prohibitions or limitations imposed on the activity of the client by existing laws, rules and regulations
Regulatory and legal constraints
the client’s need to convert positions into cash and the timing of such requirement.
Liquidity needs
refers to any financial institutions, only with respect to the instruments in which it is authorized to engage as a broken dealer.
Market counterparty
refers to an institution that is not a market counterparty but has the level of net worth, knowledge, expertise, and experience to deal with the financial products.
Sophisticated institutional client
refers to an individual who has demonstrated to the BSFI that he has the level of net worth, knowledge, and experience to deal with financial products.
Sophisticated individual client
refer to all other institutional or individual clients not categorized as market counterparty, sophisticated institutional client or sophisticated individual client.
Other clients
