Good Finanical Websites

Depository Trust & Clearing Corporationhttp://www.dtcc.com/

International Swaps and Derivatives Association
http://www2.isda.org/
http://www2.isda.org/newsroom/webcasts-and-videos/

Business News Networkhttp://watch.bnn.ca/

About ETF(s)http://www.etfguide.com/
http://www.etfguide.com/etfeducation.htm

Investment Company Institute.
http://www.ici.org/

Financial Times
www.ft.com/blog
http://ftalphaville.ft.com/blog/2012/01/05/779501/why-do-they-exist/


http://blog.numerix.com/public/2012/09/a-primer-on-funding-value-adjustment-fva-numerix-video-blog.html
Mathematical Methods For Foreign Exchange: A Financial Engineer's Approach
http://www.amazon.com/Mathematical-Methods-Foreign-Exchange-ebook/dp/B0058QN364/ref=pd_rhf_ee_p_t_1_AB79

FAS 157

Definition of a fair value – change in focus from an “entry” price to an “exit” price i.e. how much would be received to sell the asset or paid to transfer the liability instead of how much would be paid to acquire an asset or received to assume a liability?

Fair value measurement – the Standard prescribes the use of one or more of three acceptable valuation techniques (noted below).
1. Market approach – prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities i.e. observable prices.
2. Income approach – valuation techniques used to convert future amounts (e.g. cash flows or earnings) to a single present amount (discounted), based on values indicated by current market expectations.
3. Cost approach – current replacement cost, adjusted for obsolescence.


Fair value hierarchy: Assets and Liabilities carried at fair value have to be classified and disclosed in one of three Levels (1, 2 or 3), with additional disclosure required for Level 3 (the most complex) items.

The fair value hierarchy prioritises the inputs used to measure fair value into three broad Levels (Levels 1, 2 and 3), moving from quoted prices in active markets in Level 1 to unobservable inputs in Level 3.

Level 1 inputs – observable, quoted prices for identical assets or liabilities in active markets.
Examples include US government and agency securities, foreign government debt, listed equities and money market securities. (Mark to Market)

Level 2 inputs – quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets in markets that are not active; and inputs other than quoted prices e.g. interest rates and yield curves. (Mark to Model)
Examples include corporate bonds (investment grade, high yield), mortgage-backed securities, bank loans, loan commitments, less liquid listed equities, municipal bonds and certain OTC derivatives.

Level 3 inputs – unobservable inputs for the asset or liability. These should be based on the best information available. The company should utilise all reasonably available information, but need not incur excessive cost or effort to do so. However, it should not ignore information that can be obtained without undue cost and effort. As such, the reporting entity’s own data should be adjusted if information is reasonably available without undue cost and effort.
Examples include distressed debt, private equity, exotic or non-standard derivatives.

Disclosures – move from generic fair value disclosures with little transparency of approach to an established hierarchy with required disclosures.