Financial Markets in Practice

Financial Markets in Practice: From Post-Crisis Intermediation to FinTechs delivers an overview of risk transformations operated by the financial industries from the perspective of quantitative finance. It gives a pedagogical and comprehensive understanding of the structure of the financial system as a network of risk suppliers and risk consumers, where different categories of market participants buy, transform, net and re-sell different kinds of risks. This risk-transformation oriented view is supported by the evolutions that followed the last global financial crisis: consumers of financial products asked for less complex risk transformations, regulators demanded to keep as few risks as possible inside financial institutions, and market participants turned to run mass market-like businesses rather than haute couture"-like businesses. This book portrays the network of intermediaries composing the financial system, describes their most common business models, explains the exact role of each kind of market participant and underlines the interaction between them. It seeks to reveal the potential disintermediation that could happen inside the financial sector led by FinTechs and Artificial Intelligence-based innovations. Readers are invited to rethink the role of market participants in the post-crisis world, and are prepared for the next wave of changes that are driven by data sciences, AI and blockchain. Amid these transformations, quantitative finance will be increasingly involved in all aspects of the financial system. This handy resource helps practitioners from the buy-side and sell-side to gain insights to an overview of business models in the financial system from an intermediation perspective, and guides students to comprehensively understand the complex ecosystem they will evolve into"--