金融市场学双语课件C01-Powerpoint-Slides.ppt

1、Financial Markets and Institutions6th EditionBy Jeff MaduraPrepared by Paul WongDepartment of Finance,Shanghai Lixin University of CommerceCHAPTERRole of Financial Markets and Institutions 2003 South-Western/Thomson LearningnDescribe the types of financial marketsnDescribe the role of financial inst

2、itutions with financial marketsnIdentify the types of financial institutions that facilitate transactionsnFinancial markets provide for financial intermediation-financial savings(Surplus Units)to investment(Deficit Units)nFinancial markets provide payments systemnFinancial markets provide means to m

3、anage riskFinancial Market:a market in which financial assets(securities)such as stocks and bonds can be purchased or soldnBroad Classifications of Financial MarketsMoney versus Capital Markets Primary versus Secondary MarketsOrganized versus Over-the-Counter MarketslNew Issue of SecuritieslExchange

4、 of Funds for Financial ClaimlFunds for Borrower;an IOU for LenderlTrading Previously Issued SecuritieslNo New Funds for IssuerlProvides Liquidity for SellerlShort-Term,1Yr lRange of Issuer QualitylDebt and EquitylSecondary Market FocuslFinancing Investment-Higher ReturnslVisible MarketplacelMembers

5、 TradelSecurities ListedlNew York Stock ExchangelWired Network of DealerslNo Central,Physical LocationlAll Securities Traded off the ExchangesnMoney Market SecuritieslDebt securities OnlynCapital market securitieslDebt and equity securitiesnDerivative SecuritieslFinancial contracts whose value is de

6、rived from the values of underlying assetslUsed for hedging(risk reduction)and speculation(risk seeking)Debt Securities:Contractual obligations(IOU)of Debtor(borrower)to Creditor(lender)uInvestor receives interestuCapital gain/loss when solduMaturity dateEquity Securities:Claim with ownership rights

7、 and responsibilitiesuInvestor receives dividends if declareduCapital gain/loss when solduNo maturity dateneed market to sellnValue a function of:lFuture cash flowslWhen cash flows are receivedlRisk of cash flowsnPresent value of cash flows discounted at the market required rate of returnnValue dete

8、rmined by market demand/supplynValue changes with new informationExhibit 1.3Economic ConditionsIndustry ConditionsFirm Specific InformationImpact of Future Cash FlowsEvaluation of Security PricingInvestor Decision to TradenSecurity prices reflect available informationnNew information is quickly incl

9、uded in security pricesnInvestors balance liquidity,risk,and return needs lTo Promote EfficiencyuHigh level of competitionuEfficient payments mechanismuLow cost risk management contractsWhy Government Regulation?lTo Maintain Financial Market StabilityuPrevent market crashesnCircuit breakersnFederal

10、Reserve discount windowuPrevent Inflation-Monetary policyuPrevent Excessive Risk Taking by Financial InstitutionsWhy Government Regulation?lTo Provide Consumer ProtectionuProvide adequate disclosureuSet rules for business conductlTo Pursue Social PoliciesuTransfer income and wealthuAllocate saving t

11、o socially desirable areasnHousingnStudent loansWhy Government Regulation?nIncreased international funds flowlIncreased disclosure of informationlReduced transaction costslReduced foreign regulation on capital flowslIncreased privatizationResults:Increased financial integration-capital flows to high

12、est expected risk-adjusted return nInformation processingnServe special needs of lenders(liabilities)and borrowers(assets)lBy denomination and termlBy risk and returnnLower transaction costnServe to resolve problems of market imperfectionTypes of Depository Financial InstitutionsCommercialBanks$5 Tr

13、illionTotal AssetsSavings Institutions$1.3 TrillionTotal AssetsCredit Unions$.5 TrillionTotal AssetsnInsurance companiesnMutual fundsnPension fundsnSecurities companiesnFinance companiesnSecurity poolsnFocused on capital marketnLonger-term,higher risk intermediationnLess focus on liquiditynLess regu

14、lationnGreater focus on equity investmentsnRapid growth of mutual funds and pension fundsnIncreased consolidation of financial institutions via mergersnIncreased competition between financial InstitutionsnGrowth of financial conglomeratesnInternational expansionnInternational mergersnImpact of the single European currencynEmerging markets