資本市場和金融機構1-1ppt課件

1、CAPITAL MARKETS AND FINANCIAL INSTITUTIONS (BUS 498)ByARTURO RUBALCAVAThis course examines: The way in which Financial Markets function The pivotal role played by Financial institutions Main emphasis: Coverage of Canadian markets and institutions Coverage of risk measurement and management Risk-retu

2、rn tradeoffs available to investors. IntroductionFinancial SystemFinancial MarketsFinancial InstitutionsEconomic functions of FIsFinancial InnovationRegulation of the Financial SystemConclusions1. Financial SystemIts main role is to gather money from parties that have more money than they need right

3、 now and route those funds to those that can use them for either business or consumer expenditures.This is facilitated by Financial Markets and Financial Institutions2. Financial MarketsMarkets where parties buy and sell financial instruments including stocks, bonds, options, foreign exchange contra

4、cts.Example: BCE needs to finance a $400 million telecom project. It can get the money via: A) Financial Markets by borrowing directly from investors (e.g.,households) B) By borrowing indirectly from households via a Financial Intermediary (e.g., a commercial bank). Households Nortel$BondsBondsFinan

5、cial MarketsA)Financial markets: ClassificationMoney Market. Short term debt instrumentsMaturity of securities 1 yearDebt Markets (Government Securities Market, Municipal Bond Markets, Corporate Debt Markets) Stock Market (TSX), Depositary Receipts MarketForeign Exchange markets. Markets in which fo

6、reign currencies are tradedOther Markets: Financial Derivative MarketsFinancial Markets: Alternative classificationPrimary Market. Market for new issue of securities sold to initial buyers by investment bankers. Secondary Market. Market in which already-issued securities are traded among investors B

7、rokers. Match buyers and sellers for a fee. Dealers. Sell and buy securities from buyers and sellers.Types of secondary marketsl1. Exchange MarketlTransaction are centralized in a physical location via communication network.lExamples: TSX, TSX Venture Exchange (formerly CDNX), Montreal Exchange, Win

8、nipeg Commodities Exchange, NYSE, AMEX. l2. Over-the-counter Market: lTransaction made through communications network with no physical centralization of tradeslExamples: CDN, (Canadian government bonds), NASDAQ. Foreign exchange marketDomestic and International Financial MarketsDomestic MarketBanksM

9、oney MarketBond MarketStock MarketInternational MarketInternational Bond MarketForeign BondsEurobondsEurocurrenciesForeign stock marketsInternational Bond MarketA) Foreign BondsA bond issued by a foreign firm or government for sale in another country in the currency of that country. Example? Yankee

10、bonds. U.S. dollar denominated bonds issued within the U.S. by a foreign borrower (e.g. Bombardier). Others: Samurai bonds, Bulldogs B) Eurobond Market: EurobondsA bond issued by a foreign firm or government for sale outside the country in whose currency it is denominated.Example? A Canadian dollar-

11、denominated bond for sale to investors outside of Canada.c) Eurocurrency market: EurocurrenciesInternational currencies that are deposited in banks outside their home countries. Examples: Eurodollars. A US dollar deposited in a bank outside the US. Other examples: Euroeuros, Euroyens, etc.Internatio

12、nal Bank Loans and Syndicate Credits: Ex. Loans in Eurocurrency (Eurocredits)Foreign Stock Markets E.g., Shares of Potash Corp. are listed on the TSX, and NYSE.Reasons of the significant growth in foreign financial MarketsDeregulation of financial marketsGlobalization of tradeEasy accessibility of i

13、nformation via advances in computer technology Financial Markets (Continued)How borrowers obtain funds?Money Market.- Short term debt Capital Markets.- Long term debt and equityWhen to finance in the Money Mkt? When in the Capital Mkt?When to finance with Long Term Debt? When with Equity?What type o

14、f firms will finance more with equity than with debt? When to finance in the domestic or in international markets?Advantages for lendersDebt vs. Equity3. Financial Institutions (FIs)The flow of funds from lenders to borrowers is facilitated by Financial InstitutionsThis can be done A) Directly In th

15、e financial markets through the assistance of securities firms (investment banks).B) Indirectly Through Other financial intermediaries(e.g., via a commercial bank). A) Direct FinanceProcess by which funds move directly from lenders to borrowers assisted by an investment bank.It does not imply an ass

16、et asset transformation function.For example: Research in motion issues $1-billion of stock directly to investors with the assistance of CIBC World Markets (investment bank)Once the financial claims have been issued, they may be resold to other investors also by Investment banks through their broker

17、age or dealer units.Process by which funds move from lenders to borrowers by a financial intermediary that smoothes the flow of funds between the lender-savers and the borrower-spenders. It implies an asset asset/risk transformation function.For example: BCE gets a loan for $400-million from Bank of

18、 Montreal. Households instead of lending $400-million directly to Nortel, they prefer to lend $400-million to Bank of Montreal (for example, by investing in short-term deposits with a guaranteed interest rate). Bank of Montreal makes a $400-million long-term loan to BCE. Primary route for moving fun

19、ds from lenders to borrowers The Financial System .FinancialInstitutionsFinancialMarketsLender-Savers1. Households2. Business Firms3. Governments4. Foreigners5. FIsBorrower Spenders1. Business Firms2. Government3. Households4. Foreigners5. FIs DIRECT FINANCE(Assisted by Securities firms)INDIRECT FIN

20、ANCEFunds (e.g., deposits)Funds (e.g., loans)FundsFundsFunds(e.g., Govt bonds)(e.g., shares)(e.g., shares)Financial IntermediariesA) Depository Institutions. FIs that take deposits and make loansChartered (commercial) banks and near banks (trust and mortgage loan companies, and credit unions)Main business. Take