Ipag Finance & Taxation MM

1. IpagFinance & TaxationMM

2. Ipag • Upcoming Planning • Agenda for YTGo – Interactive courses + Exercices / Cases • Today – Introduction

4. Ipag - Introduction • Increase of Internationale Finance: thousands expressions to qualify extraordinary dvpt of International Finance: Global Market, Geo-Finance, Planet, Empire…. • To try to understand if those qualifications are relevants > Highlight of key facts from the past: • 1.1. Volumes: • (McKinsey, 2005): 1980>2003: global value of Financial assets increased > 3 times of increase of real revenue • In 2003, Fin.Assets= 118 000 Billion $ Vs 12 000 Million in 1980…level of int’l market only • INT’L Credit from Banks (20 times higher ) from 1980> 2004 • Directs Investments abroad: from 250 Billion $ avg /year > 1 000 Billion (1999>2002; • Change transactions : from 600 Billion $ (1980) to 1 800 Billion (2004) • Finally: • Shares transactions on daily basis: 230 Billion $ • Bonds transactions on daily basis: 820 Billion $ • Consequently explosion of International Finance.

5. Ipag - Introduction • 1.2. New Actors: • Today new actors appear in the world of Finance Int’l, despite high visibility of Banks yet, with high interventions and presence…(commercial credits, rates, international investments, etc …) • But also: • Pension Funds, Investmentsfunds, PrivateEquity …started in anglo saxon countries • Hedges funds… More than basic function of voverage (« couverture ») , also function of speculation: all differences return in all markets (exchange rate, raw material, …) • =>Represents only 2.5% of the market, but are playing a key role, with capacity of tracking all variances for return optimization (rates) and ability of portfolio booster in short period of time… • Company groups • Insurance Companies / Groups • Portfolio Consulting •  Markets are enlarged of new actors…

6. Ipag - Introduction • 1.3. New Technics & Products: • For long time International was more for payments of Exportation and Importation transactions, exchange rates , credits (buyers and suppliers), documentary credit « credoc »,… • Innovations, news technics, … to follow World evolutions (terrorism, …) • More and more complex • 1.4. Gap in the Monetary system • Economical evolution imposes regulations (ex. FMI)…and quotation agencies (Moodys-risk Management, etc …) • 3 questions : • Regulations: identification of fundamental and base of the system international in order to work on long term basis. Balance relationship (interest rates, one price or fixing, …) • Stability Issue: Risk assessment, risks analysis, risk balanced • Adequacy Finance, disconnexion …: search of balance with economic environnement…Find a right balance allowing Finance to be at disposal of economy…link of Finance and economy are some times complex…

7. Ipag - Globalization 1.2.1 Mega worlwide Market: Today it is obvious that emergence of Mega Market… Bank are no more split between Internal operations and abroad , but today is more international scale….this being example of England Banks, with operations of treasury and Acquition and Merging companies (FUSAC) Lost of notion of « borders » « Frontieres » Change of Methods: To understand logic of nowadays Finance, it is important to understand that it works at level of world scale, …we can still have some regional trends, but principles trends andheavy change are with World consequences… …;ths change and movement appears with high level of transactions, communication, spaces, which have consequences of inter dependency of today. (…..)

8. Ipag - Globalization • 1.2.2 Globalisation as link of Financial Integration: In France, the word of Globalization met some difficulties to be a lead world as it is today. In the 90’s, many authors were refusing using it, due to anglo-Saxon worlds, with « Z » Reminder: >Internationalisation: Period of opening (exchanges of products, services, goods, and Capital, etc …), in the 1950’s,: wide movement of liberation of flows >>GATT, OECE, then OCDE….freedom circulation of flows… »laisser faire, laisser passer » …. • 1951 : currencies convertibility, 1957 : Deal in Rome « Traite de Rome », 1971: Kennedy Round • With American impluse we go from closed Market to opeen Market • > »Mondialisation » or beginning of Globalization • Late 1970’s, new step, with multinational companies….news way of thinking, …innovations<, etc …all this will drive and world economy, …

9. Ipag - Globalization • 1.2.2 Globalisation as link of Financial Integration (…): > Globalization • Condition is that Market has to be Total, …;Marketing Specialists Studies, in the late 1980’s…companies are now considering projects globally….because of new Market with lack of borders, more and more integrated: • Example: Coca Cola yesterday…today / IPod / Iphone • Charateristics: • Uniqueness of the Model: Further to integration, this Model is based on ideas, psychology concept, being part of unique Model of resources allocations, and economy behaviour (…with Fall of the Berlin wall or U.R.S.S. regime end …there is Globalization because the reference of Market economy became unique); ….Other example being the new accounting reference in 2005/2006 with I.F.R.S. In all example it is market economy driven, emphasized by economy ideology • Group behaviour, Society of information, unification of technics… • ( example above of Ipod….)….compared to previous periods, All classed are impacted (Medias, traveling, …thanks to Internet, Skype…)

10. Ipag - Globalization • 1.2.3 Portfolio Diversity • « Il ne faut pas mettre tous les œufs dans le même panier… », theory of Portfolio accounts many economist or Prix Nobel (ex.James Tobin). • Concept which all investors are looking for portfolio optimization, to allocate risks within total assets… • Various RISKS: (Shares, Bonds, pensions funds, etc …) • Optimization of places: majority of one or other shares/Bonds, … • Optimization and international diversification: • (cf tableau page 96,97)

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