金融英語-4-International Finance

1、Part 4 International FinancenChapter Outline：q4.1 International Balance Sheetq4.2 Foreign Exchange Rateq4.3 International Monetary Systemq4.4 Foreign Exchange Exposure q4.5 Foreign Exchange Marketq4.6 International Banking Servicesq4.7 Foreign Direct InvestnThe balance of payments accounts(國際收支平國際收支

2、平衡表衡表) are those that record all transactions between the residents（居民）（居民） of a country and residents of all foreign nations.nThey are composed of the following:qThe Current Account 經(jīng)常賬戶經(jīng)常賬戶qThe Capital Account 資本賬戶資本賬戶qThe Official Reserves Account 儲(chǔ)備帳戶儲(chǔ)備帳戶qStatistical Discrepancy 統(tǒng)計(jì)誤差統(tǒng)計(jì)誤差4.1 Inte

3、rnational Balance Sheet4.1.1 The Current AccountnIncludes all imports and exports of goods and services, unilateral transfers（經(jīng)常轉(zhuǎn)移）（經(jīng)常轉(zhuǎn)移） of foreign aid.nThe net balance on the merchandise transactions is called the trade balance.Goods 貨物貿(mào)易貨物貿(mào)易nExports are entered into the credit side, while imports

4、 the debit side.nIf the debits exceed the credits, then a country is running a trade deficit（貿(mào)易逆（貿(mào)易逆差）差）.nIf the credits exceed the debits, then a country is running a trade surplus（貿(mào)易（貿(mào)易順差）順差）.Services 服務(wù)貿(mào)易服務(wù)貿(mào)易nServices include all receipts and payments between the residents and foreigners on trans

5、portation, insurance, travel, communication, investment returns such as interest, dividends, and profits generated from loans and investments, technology.nReceipts of services are entered into the credit side while payments the debit side.Unilateral transfers 經(jīng)常轉(zhuǎn)移經(jīng)常轉(zhuǎn)移nUnilateral transfers are transa

6、ctions that only one-sided since there is no offsetting payment(補(bǔ)償性支付補(bǔ)償性支付 ).nIt includes private transfers and government transfers.4.1.2 The Capital AccountnThe capital account measures the difference between a country s sales of assets to foreigners and purchases of foreign assets.nThe capital ac

7、count is composed of Foreign Direct Investment (FDI，外商直接外商直接投資投資), portfolio investments（間接投資間接投資） and other investments.nCapital account usually consists of three sub-accounts:nDirect investment(直接投資直接投資): it is usually defined as investment in enterprises located in the country but “effectively” c

8、ontrolled by residents in another country.nPortfolio investments（證券投資，間接投證券投資，間接投資資）: it designates all long-term capital flows that do not give investors effective control over their investments, which involve mainly loans and securities.nother investments mainly refers to the short-term capital re

9、cords the net changes in international assets and liabilities with an original maturity of one year or less in which domestic residents (excluding official monetary institutions) are creditors and debtors.nShort-term capital flows include the normal, everyday receipts and payments arising out of int

10、ernational trade and finance that occur mainly through shift in the ownership of demand deposits（活期存款）（活期存款） and other liquid deposits in banks at home and abroad.nEstimates of private short-term capital movement are the least reliable of the balance of payments items because of their variety, intan

11、gibility（無形的）（無形的） and private character.4.1.3 The Official Reserves AccountnOfficial reserves assets comprise: qforeign exchange in convertible currencies (可自由兌換外幣可自由兌換外幣), qreserve position in the International Monetary Fund（IMF儲(chǔ)備頭寸）儲(chǔ)備頭寸）, qallocation of Special Drawing Rights（SDR）, qGold Stock（黃金

12、儲(chǔ)備）（黃金儲(chǔ)備）. 4.1.4 Statistical DiscrepancynThis account is used to describe some omissions（遺漏遺漏） and misrecorded（未記（未記錄）錄） transactions to make the total debits and credits into an arithmetic equilibrium （算術(shù)平衡）（算術(shù)平衡）.4.1.5 The Balance of Payments IdentityBCA + BKA + BRA = 0whereBCA = balance on curren

13、t accountBKA = balance on capital accountBRA = balance on the reserves accountUnder a pure flexible exchange rate, BCA + BKA = 0Exhibit 4.1 U.S. Balance of Payments Data in 2000CreditsDebitsCurrent Account1Exports$1,418.642Imports($1,809.18)3UnilateralTransfers$10.24($64.39)Balance on Current Accoun

14、t($444.69)Capital Account4DirectInvestment$287.68($152.44)5PortfolioInvestment$474.39($124.94)6OtherInvestments$262.64($303.27)Balance on Capital Account$444.267StatisticalDiscrepanciesOverall Balance$0.30Official Reserve Account($0.30)0.73U.S. Balance of Payments DataInthissheet,thebalanceofpayment

15、sidentityhold:BCA+BKA=BRA($444.69)+$444.26+$0.73=$0.30=($0.30)CreditsDebitsCurrent Account1Exports$1,418.642Imports($1,809.18)3UnilateralTransfers$10.24($64.39)Balance on Current Account($444.69)Capital Account4DirectInvestment$287.68($152.44)5PortfolioInvestment$474.39($124.94)6OtherInvestments$262

16、.64($303.27)Balance on Capital Account$444.267StatisticalDiscrepanciesOverall Balance$0.30Official Reserve Account($0.30)0.73Balance of Payments TrendsnSince 1982 the U.S. has experienced continuous deficits on the current account and continuous surpluses on the capital account.nDuring the same peri

17、od, Japan has experienced the opposite.Balances on the Current (BCA) and Capital (BKA) Accounts of the United StatesSource:IMFInternational Financial Statistics Yearbook, 2000Balances on the Current (BCA) and Capital (BKA) Accounts of JapanSource:IMFInternational Financial Statistics Yearbook, 20004

18、.2 Foreign Exchange RatenAn exchange rate is the price at which one currency can be exchanged for another.nIn theory, exchange rates should be in accord with purchasing power parity (PPP,購買力平價(jià)理論購買力平價(jià)理論).nIf the price level in a country increases because of inflation, its currency should depreciate（貶

19、值）（貶值）.4.2.1 Fixed ratesnFor 25 years after World War , the levels of most major currencies were determined by governments. nThey were fixed or pegged against the US dollar（與美元掛鉤）（與美元掛鉤）, and the dollar was pegged against gold （與黃金掛鉤）（與黃金掛鉤）.nIt was ended in 1971, because of the following inflation

20、in the USA, the Federal Reserve did not have enough gold to guarantee the American currency.nToday, a country can fix its value to another countrys currency.nA country can fix its currency to a “basket” of other currencies. qSame as diversifying a portfolio (Not putting all your eggs in one basket)q

21、Special Drawing Right (SDR)：A basket of four major world currencies. nGovernments attempt to keep the value fixed for relatively long periods of time to reduce trade uncertainties. How to keep exchange rate fixed?nIt cant maintain the value for long. If the demand for the currency falls, its price w

22、ould fall as well.nThe only way the price can be kept up is for the government promising to maintain the original level to enter the foreign exchange market and buy the amount that will bring the quantity demanded back to the original level.DefendingaFixedExchangeRatenTo buy or sell foreign currenci

23、es (in order to influence the prevailing exchange rate), a government must have foreign exchange reserves.nIt is not likely to have enough reserves to defend against a massive and sustained attack on the currency.nThe government can also make long-term adjustments of its macroeconomic (monetary and/

24、or fiscal policy). Budget austerity（緊縮預(yù)（緊縮預(yù)算）算） avoids inflation and takes downward pressure（貶值）（貶值） off currency.4.2.2 Pegged exchange rate 聯(lián)系匯率制 nPegged exchange rate refers to setting a targeted value for a countrys foreign exchange, and it indicates the government has some ability to move the pe

25、g.nThe government may change the pegged rate if a substantial disequilibrium（不平衡）（不平衡） in the countrys international position develops (e.g., demand for the currency is too weak to maintain the desired value).Crawling peg 爬行盯住nA crawling peg can be changed often (monthly, say) according to a set of

26、indicators or the judgment of the countrys monetary authority.nIndicators（指示器）（指示器）:qThe difference of inflation ratesqInternational reserve assetsqGrowth of the money supplyqThe current actual market exchange rate relative to the central par value of the pegged rate4.2.3 Floating rates 浮動(dòng)匯率nFloatin

27、g exchange rates means that exchange rates are determined by people buying and selling currencies in the foreign exchange markets.nFreely floating exchange rate（自由浮動(dòng)）（自由浮動(dòng)）: fully determined by market forces: the level of supply and demand.nManaged floating exchange rates（有管理的（有管理的浮動(dòng)匯率制）浮動(dòng)匯率制）: with

28、 governments interventionKEY WORDSnstimulus plan 刺激計(jì)劃刺激計(jì)劃nactive fiscal policies and moderately easy monetary policies 積極的財(cái)政政策，適度積極的財(cái)政政策，適度寬松的貨幣政策寬松的貨幣政策 nexpand domestic demand 擴(kuò)大內(nèi)需擴(kuò)大內(nèi)需nspur domestic consumption 促進(jìn)消費(fèi)促進(jìn)消費(fèi)ninfrastructure construction 基礎(chǔ)設(shè)施建設(shè)基礎(chǔ)設(shè)施建設(shè)nvalue-added tax reform 增值稅改革增值稅改革nthe

29、 stimulus plan with ten big policies involved $586 billion(4 trillion RMB) nin a range of areas including the construction of railroads, highways and airports, boosting of services sector, agriculture, education and public health, improvement of peoples income,兩年投兩年投4萬億擴(kuò)內(nèi)需國家出臺(tái)十大措萬億擴(kuò)內(nèi)需國家出臺(tái)十大措施促增長施促增長

30、 n一是加快建設(shè)保障性安居工程。一是加快建設(shè)保障性安居工程。 n二是加快農(nóng)村基礎(chǔ)設(shè)施建設(shè)。二是加快農(nóng)村基礎(chǔ)設(shè)施建設(shè)。 n三是加快鐵路、公路和機(jī)場(chǎng)等重大基礎(chǔ)設(shè)施建設(shè)。三是加快鐵路、公路和機(jī)場(chǎng)等重大基礎(chǔ)設(shè)施建設(shè)。 n四是加快醫(yī)療衛(wèi)生、文化教育事業(yè)發(fā)展四是加快醫(yī)療衛(wèi)生、文化教育事業(yè)發(fā)展。 n五是加強(qiáng)生態(tài)環(huán)境建設(shè)。五是加強(qiáng)生態(tài)環(huán)境建設(shè)。 n六是加快自主創(chuàng)新和結(jié)構(gòu)調(diào)整。六是加快自主創(chuàng)新和結(jié)構(gòu)調(diào)整。 n七是加快地震災(zāi)區(qū)災(zāi)后重建各項(xiàng)工作。七是加快地震災(zāi)區(qū)災(zāi)后重建各項(xiàng)工作。 n八是提高城鄉(xiāng)居民收入。八是提高城鄉(xiāng)居民收入。 n九是在全國所有地區(qū)、所有行業(yè)全面實(shí)施增值稅轉(zhuǎn)型改革，九是在全國所有地區(qū)、所有行業(yè)全面實(shí)

31、施增值稅轉(zhuǎn)型改革，鼓勵(lì)企業(yè)技術(shù)改造，減輕企業(yè)負(fù)擔(dān)億元。鼓勵(lì)企業(yè)技術(shù)改造，減輕企業(yè)負(fù)擔(dān)億元。 n十是加大金融對(duì)經(jīng)濟(jì)增長的支持力度十是加大金融對(duì)經(jīng)濟(jì)增長的支持力度 n4.3.1 Evolution of the International Monetary Systemn4.3.2 Current Exchange Rate Arrangementsn4.3.3 European Monetary Systemn4.3.4 The Mexican Peso Crisisn4.3.5 The Asian Currency Crisisn4.3.6 Fixed versus Flexible Exch

32、ange Rate Regimes4.3 International Monetary System4.3.1 Evolution of the International Monetary SystemnBimetallism（復(fù)本位制）（復(fù)本位制）: Before 1875nClassical Gold Standard: 1875-1914nInterwar Period: 1915-1944nBretton Woods System: 1945-1972nThe Flexible Exchange Rate Regime: 1973-PresentBimetallism: Before

33、 1875nA “double standard”（復(fù)本位制（復(fù)本位制 ） in the sense that both gold and silver were used as money.nSome countries were on the gold standard（金本（金本位）位）, some on the silver standard （銀本位）（銀本位）, some on both.nBoth gold and silver were used as international means of payment and the exchange rates among cur

34、rencies were determined by either their gold or silver contents. nGreshams Law（格勒善法則（格勒善法則 ，劣幣驅(qū)逐良幣），劣幣驅(qū)逐良幣） implied that it would be the least valuable metal that would tend to circulate. Classical Gold Standard: 1875-1914nDuring this period in most major countries:qGold alone was assured of unrestr

35、icted coinage（制造金幣）（制造金幣）qThere was two-way convertibility（雙向可兌換）（雙向可兌換） between gold and national currencies at a stable ratio.qGold could be freely exported or imported.nThe exchange rate between two countrys currencies would be determined by their relative gold contents.For example, if the dollar

36、 is pegged to gold at U.S.$30 = 1 ounce of gold, and the British pound is pegged to gold at 6 = 1 ounce of gold, it must be the case that the exchange rate is determined by the relative gold contents:Classical Gold Standard: 1875-1914$30=6$5=1Classical Gold Standard: 1875-1914nHighly stable exchange

37、 rates under the classical gold standard provided an environment that was conducive to（有益（有益于）于） international trade and investment.nMisalignment（不一致）（不一致） of exchange rates and international imbalances of payment were automatically corrected by the price-specie-flow mechanism（價(jià)格（價(jià)格-貨幣貨幣-流動(dòng)機(jī)流動(dòng)機(jī)制制 ）.

38、Price-Specie-Flow MechanismnSuppose Great Britain exported more to France than France exported to Great Britain.nThis cannot persist under a gold standard.qNet export of goods from Great Britain to France will be accompanied by a net flow of gold from France to Great Britain.qThis flow of gold will

39、lead to a lower price level in France and, at the same time, a higher price level in Britain.nThe resultant change in relative price levels will slow exports from Great Britain and encourage exports from France.Classical Gold Standard: 1875-1914nThere are shortcomings:qThe supply of newly minted gol

40、d（鑄造金幣）（鑄造金幣） is so restricted that the growth of world trade and investment can be hampered for the lack of sufficient monetary reserves.qEven if the world returned to a gold standard, any national government could abandon the standard.Interwar Period: 1915-1944nExchange rates fluctuated as countri

41、es widely used “predatory” depreciations（掠奪性貶值）（掠奪性貶值） of their currencies as a means of gaining advantage in the world export market.nThe result for international trade and investment was profoundly detrimental（有害（有害的）的）.Bretton Woods System: 1945-1972nNamed for a 1944 meeting of 44 nations at Bret

42、ton Woods, New Hampshire.nThe purpose was to design a postwar international monetary system.nThe goal was to keep exchange rate stable without the gold standard.nThe result was the creation of the IMF and the World Bank.Bretton Woods System:1945-1972nUnder the Bretton Woods system, the U.S. dollar w

43、as pegged to gold at $35 per ounce and other currencies were pegged to the U.S. dollar.nEach country was responsible for maintaining its exchange rate within 1% of the adopted par value by buying or selling foreign reserves as necessary.nThe Bretton Woods system was a dollar-based gold exchange stan

44、dard(以美元為基礎(chǔ)的金匯兌本以美元為基礎(chǔ)的金匯兌本位制位制).The Flexible Exchange Rate Regime: 1973-Present.nFlexible exchange rates were declared acceptable to the IMF members.qCentral banks were allowed to intervene in the exchange rate markets.nNon-oil-exporting countries(非非石油輸出國石油輸出國 ) and less-developed countries were gi

45、ven greater access to IMF funds.4.3.2 Current Exchange Rate ArrangementsnFree Float qThe largest number of countries, about 48, allow market forces to determine their currencys value.nManaged Float qAbout 25 countries combine government intervention with market forces to set exchange rates.nPegged t

46、o another currency qSuch as the U.S. dollar or euro (through franc or mark).nNo national currencyqSome countries do not bother printing their own, they just use the U.S. dollar. For example, Ecuador（厄瓜多爾）, Panama, and El Salvador（薩爾瓦多） have dollarized.4.3.3 European Monetary SystemnObjectives of Eur

47、opean Monetary System:qTo establish a zone of monetary stability in Europe.qTo coordinate exchange rate policies vis-vis（相對(duì)于）（相對(duì)于） non-European currencies.qTo pave the way for the European Monetary Union歐洲貨幣聯(lián)盟）歐洲貨幣聯(lián)盟）.What Is the Euro?nThe euro is the single currency of the European Monetary Union w

48、hich was adopted by 11 Member States on 1 January 1999. nThese original member states were: Belgium（比利時(shí)）（比利時(shí)）, Germany, Spain, France, Ireland, Italy, Luxemburg（盧森（盧森堡）堡）, Finland（芬蘭）（芬蘭）, Austria（奧地利）（奧地利）, Portugal（葡萄牙）（葡萄牙） and the Netherlands（荷蘭）（荷蘭）.What is the official sign of the euro? nThe s

49、ign for the new single currency looks like an “E” with two clearly marked, horizontal parallel lines across it. nIt was inspired by the Greek letter epsilon（第五個(gè)希臘字母）（第五個(gè)希臘字母）, in reference to the cradle of European civilization and to the first letter of the word Europe. Value of the Euro in U.S. Do

50、llarsJanuary 1999 to October 2008 The Long-Term Impact of the EuronThe euros success will advance the political integration of Europe in a major way, eventually making a “United States of Europe” feasible.nThe U.S. dollar loses its place as the dominant world currency.nThe euro and the U.S. dollar b

51、ecome the two major currencies.4.3.4 The Mexican Peso CrisisnOn 20 December, 1994, the Mexican government announced a plan to devalue the peso against the dollar by 14 percent.nThis decision changed currency traders expectations about the future value of the peso.nIn their rush to get out，the peso f

52、ell by as much as 40 percent.The Mexican Peso CrisisnThe Mexican Peso crisis is unique in that it represents the first serious international financial crisis touched off（觸發(fā)）（觸發(fā)） by cross-border flight of foreign capital （跨國資本外逃）（跨國資本外逃）.nTwo lessons emerge:qIt is essential to have a multinational sa

53、fety net（安全網(wǎng)）（安全網(wǎng)） in place to safeguard the world financial system from such crises.qAn influx（流入）（流入） of foreign capital can lead to an overvaluation in the first place.4.3.5 The Asian Currency CrisisnThe Asian currency crisis turned out to be far more serious than the Mexican peso crisis in terms

54、 of the extent of the contagion（蔓延） and the severity of the resultant economic and social costs.nMany firms with foreign currency bonds were forced into bankruptcy.nThe region experienced a deep, widespread recession.Currency Crisis ExplanationsnIn theory, a currencys value mirrors the fundamental s

55、trength of its underlying economy, relative to other economies, In the long run.nIn the short run, currency traders expectations play a much more important role.nThus, fears of depreciation become self-fulfilling prophecies(預(yù)言預(yù)言).nIn todays environment, traders and lenders, using the most modern com

56、munications, act by fight-or-flight(戰(zhàn)斗或逃跑戰(zhàn)斗或逃跑 ) instincts. 4.3.6 Fixed versus Flexible Exchange Rate RegimesnArguments in favor of flexible exchange rates:qEasier external adjustments.qNational policy autonomy.nArguments against flexible exchange rates:qExchange rate uncertainty may hamper internat

57、ional trade.qNo safeguards to prevent crises.Chinas CPI Rises 4% in October nChinas consumer price index, the main gauge(標(biāo)尺標(biāo)尺) of inflation, rose four percent year on year（與去年同期相比（與去年同期相比 ） in October.nThe figure, released by the National Bureau of Statistics（國家統(tǒng)計(jì)局）（國家統(tǒng)計(jì)局） on Tuesday, was down 0.6 p

58、ercent from that of September and it has dropped for six consecutive months.nQi Jingmei, a senior researcher with the State Information Centre（國家信息中心）（國家信息中心）, attributes the decline to the governments macroeconomic controls in dealing with the rapid rise of the CPI in the first half of the year. nS

59、he adds the drop in food prices also contributed to the decline of Octobers CPI. nMeanwhile, global food prices dropped dramatically after the hike in the first half. It also gradually lowered the domestic food prices.nQi Jingmei says she remains optimistic about the CPI in the upcoming two months.n

60、I think the CPI in the fourth quarter will continue to decline. It will ease pressure on the government to beat inflation, and shift the focus from macro-economic control to sustaining economic growth.nThe average CPI in the first 10 months of 2008 rose 6.7 percent year on year, higher than the year