Guide to Financial Markets, Fourth Edition
Marc Levinson, The Economist (in association with Profile Books), 2006, 250 pages, £20.00.

This book hit my desk at the perfect moment. A new intern, Greg, had arrived for a ten-week stint with my team, IT was slow in getting his system set up, and I needed something for him to do. Greg’s internship project was going to focus on commodities and so I tossed him this book and asked him to read the chapter on commodities. In a few hours, he had had a good introduction to the topics he needed to understand if he was going to be able to ask sensible questions of the economists on my team. This, in a nutshell, is what is great about this book. The well-educated layperson can sit down with a chapter or two and, with relatively little effort, come away with a good (albeit superficial) understanding of financial products and markets.

Marc Levinson was the finance and economics editor of The Economist and it shows. He covers the breadth of products and markets admirably, and does an excellent job of going beyond the Anglo-Saxon world to explain the idiosyncrasies of a wide range of markets, particularly those in Continental Europe and the Asia-Pacific region.

In future editions, it would be worthwhile for the author to include boxes outlining some of the big debates or major trends that are being watched carefully in financial circles. The book’s cursory treatment of hedge funds, credit derivatives, and private equity was a significant weakness. The author and his editors also need to be careful about updating, which I found to be quite uneven. On the one hand, Delphi’s bankruptcy made it into the book, as did NYMEX’s move to London. However, the explosive growth of emerging market bond issuance and the huge run-up in commodity prices did not garner a mention. I particularly grimaced at the references to Fitch IBCA, a name that FitchRatings has not used for several years. It would also be helpful if, at the end of each chapter, the author gave a list of books, articles or websites where the curious reader might go for additional information or to read about a given topic in more detail.

In summary, this is not a book for the seasoned financial professional. However, in spite of a few weaknesses, it will provide the relative newcomer to financial markets with a good overview of this extremely complex subject area.

Sarah Carlson
Financial Services Authority