WeekAmodernfinancialsystemanoverview资料实用教案

1、Learning objectives Explain the functions of a financial system Categorise the main types of financial institutions Describe the main classes of financial instruments issued in a financial system Discuss the flow of funds between savers and borrowers, and through the financial system and economy Dis

2、tinguish between various types of financial markets according to function.第1页/共43页第一页，共44页。Lecture organisation Functions of a financial system Financial institutions Financial instruments Financial markets Flow of funds, market relationships and stability Summary第2页/共43页第二页，共44页。1.1 Functions of a

3、financial system Role of markets Facilitate exchange of goods and services by: 促进(cjn) bringing opposite parties together & enable double coincidence of wants establishing rates of exchange; i.e. prices 双重需求偶合 Money Acts as medium of exchange and a store of value 易货贸易 Solves the divisibility pro

4、blem that can arise in barter exchange; Allows specialisation in production 专门化 Facilitates saving (by acting as a store of wealth) Increases the speed & efficiency of economic transactions第3页/共43页第三页，共44页。1.1 Functions of a financial system (cont.) Surplus units 盈余单位 Savers of funds available f

5、or lending Deficit units 赤字单位 Borrowers of funds for capital investment and consumption Financial instrument 金融工具/票据 Issued by a party raising funds, acknowledging a financial commitment and entitling the holder to specified future cash flows 承诺 给权利 提出条件(tiojin)，使具有特性第4页/共43页第四页，共44页。1.1 Functions o

6、f a financial system (cont.) Flow of funds 资金流动 Movement of funds through the financial system between savers and borrowers giving rise to financial instruments 导致，造成，引起 Financial system Comprises financial institutions, instruments and markets facilitating transactions for goods and services and fi

7、nancial transactions 包括(boku)，由构成(cont.)第5页/共43页第五页，共44页。1.1 Functions of a financial system (cont.)(cont.)第6页/共43页第六页，共44页。1.1 Functions of a financial system (cont.) Attributes of financial assets 归于属于(shy) Return or yield 收益 Total financial compensation received from an investment expressed as a

8、percentage of the amount invested 报酬 Risk Probability that the actual return on an investment will vary from the expected return(cont.)第7页/共43页第七页，共44页。1.1 Functions of a financial system (cont.) Attributes of financial assets (cont.) Liquidity 流动性，资产(zchn)折现能力 Ability to sell an asset within a reas

9、onable time at current market prices and for reasonable transaction costs Time-pattern of cash flows 资产(zchn)流动的频率 When the expected cash flows from a financial asset are to be received by the investor or lender(cont.)第8页/共43页第八页，共44页。1.1 Functions of a financial system (cont.) Facilitation of portf

10、olio restructuring 证券投资(tu z)组合 The combination of assets and liabilities comprising the desired attributes of return, risk, liquidity and timing of cash flows Implementation of monetary policy Actions of a central bank taken to influence interest rate levels to achieve certain economic outcomes Pri

11、mary target is inflation(cont.)第9页/共43页第九页，共44页。1.1 Functions of a financial system (cont.) An efficient financial system: encourages savings directs savings to the most efficient users implements the monetary policy of governments by influencing interest rates 货币政策(hu b zhn c) 构成 is a combination o

12、f assets and liabilities comprising the desired attributes of return, risk, liquidity and timing of cash flows(cont.)第10页/共43页第十页，共44页。1.1 Functions of a financial system (cont.) Since 2007, the financial markets have been characterised by a great deal of volatility 反复无常 What started as a liquidatio

13、n of credit derivatives sparked by a fall in house prices in the United States has become a watershed moment in modern financial history 清算 衍生品 触发(chf) 标志转折的，分水岭 As nations continue to battle the economic effects of the GFC, debate continues to rage about the regulatory response necessary to bring s

14、tability to the system 风行第11页/共43页第十一页，共44页。1.2 Financial institutions Most people have used the services of a financial institution at some stage, even if the service was simply a basic bank account Financial institutions may specialise in: taking deposits, providing advice to corporate and governm

15、ent clients or offering financial contracts such as insurance Financial institutions are essential to the operation of the modern financial system(cont.)第12页/共43页第十二页，共44页。1.2 Financial institutions (cont.) Financial institutions permit the flow of funds between borrowers and lenders by facilitating

16、 financial transactions 允许(ynx) Institutions may be categorised by differences in the sources and uses of funds 分类(cont.)第13页/共43页第十三页，共44页。1.2 Financial institutions (cont.) Categories of financial institutions Depository financial institutions Investment banks and merchant banks Contractual saving

17、s institutions 契约型储蓄机构 Finance companies Unit trusts第14页/共43页第十四页，共44页。Categories of financial institutions Depository financial institutions Mainly attract the savings of depositors through on-demand deposit and term deposit accounts; e.g. commercial banks, building societies and credit cooperative

18、s 定期存款(dn q cn kun) 信用合作社 Mainly provide loans to borrowers in household and business sectors(cont.)第15页/共43页第十五页，共44页。Categories of financial institutions (cont.)Investment banks and merchant banks 商业银行商业银行(shn y yn xn)Mainly provide off-balance-sheet (OBS) advisory services to support corporate an

19、d government clients; e.g. advice on mergers and acquisitions, portfolio restructuring, finance and risk management 咨询的咨询的May also provide some loans to clients but are more likely to advise on raising funds directly in capital markets(cont.)第16页/共43页第十六页，共44页。Categories of financial institutions (c

20、ont.)Contractual savings institution 契约契约(qyu)储蓄类机构储蓄类机构The liabilities of these institutions are contracts that require, in return for periodic payments to the institution, the institution to make payments to the contract holders if a specified event occurs; e.g. life and general insurance companie

21、s and superannuation fundsThe large pool of funds is then used to purchase both primary and secondary market securitiesPayouts are made for insurance claims and to retirees 支出支出(cont.)第17页/共43页第十七页，共44页。Categories of financial institutions (cont.)Finance companiesFunds are raised by issuing financia

22、l securities, such as commercial paper, medium-term notes and bonds, directly into money markets and capital markets 商业商业(shngy)票据票据 中期票据中期票据 债券债券Funds are used to make loans and provide lease finance to customers in the household and business sectors(cont.)第18页/共43页第十八页，共44页。Categories of financial

23、 institutions (cont.)Unit trusts 信托基金信托基金Formed under a trust deed and controlled and managed by a trustee 信托公司信托公司(xn tu n s)Funds raised by selling units to the public; investors purchase units in the trustFunds are pooled and invested by fund managers in a range of asset classes specified in the

24、trust deedTypes of unit trusts include equity, property, fixed interest and mortgage trusts抵押抵押第19页/共43页第十九页，共44页。1.2 Financial institutions (cont.)第20页/共43页第二十页，共44页。1.3 Financial instruments Equity Ownership interest in an asset Residual claim on earnings and assets 剩余的 Dividend Liquidation Types

25、Ordinary share Hybrid (or quasi-equity) security 证券(zhngqun) Preference shares 优先股 Convertible notes 可转换票据(cont.)第21页/共43页第二十一页，共44页。1.3 Financial instruments (cont.) Debt Contractual claim to: periodic interest payments repayment of principal Ranks ahead of equity Can be: short-term (money market i

26、nstrument) or medium- to long-term (capital market instrument) secured or unsecured negotiable (ownership transferable; e.g. commercial bills and promissory notes) or non-negotiable (e.g. term loan obtained from a bank)(cont.)第22页/共43页第二十二页，共44页。1.3 Financial instruments (cont.) Derivatives 衍生品 A sy

27、nthetic security providing specific future rights that derives its price from: a physical market commodity gold and oil financial security Interest-rate-sensitive debt instruments, currencies and equities Used mainly to manage price risk exposure and to speculate (cont.)第23页/共43页第二十三页，共44页。1.3 Finan

28、cial instruments (cont.) Four basic derivative contracts 衍生合约(hyu) 1.Futures contract (Chapter 18 and 19) 期货合约(hyu) 2.Forward contract (Chapters 17, 18 and 19) 远期合约(hyu) 3.Option contract (Chapters 18 and 20) 期权合约(hyu) 4.Swap contract (Chapters 18 and 21) 掉期合约(hyu)第24页/共43页第二十四页，共44页。1.4 Financial m

29、arkets Matching principle Primary and secondary market transactions Direct and intermediated finance Wholesale and retail markets Money markets Capital markets第25页/共43页第二十五页，共44页。Matching principle Short-term assets should be funded with short-term (money market) liabilities; e.g. seasonal inventory

30、 needs funded by overdraft Longer term assets should be funded with equity or longer term (capital market) liabilities; e.g.: equipment funded by debentures lack of adherence to this principle accentuated effects of frozen money markets with the sub-prime market collapse第26页/共43页第二十六页，共44页。Primary a

31、nd secondary market transactions Primary market transaction The issue of a new financial instrument to raise funds to purchase goods, services or assets by: businesses company shares or debentures governments Treasury notes or bonds individuals mortgage Funds are obtained by the issuer(cont.)第27页/共4

32、3页第二十七页，共44页。Primary and secondary market transactions (cont.) Secondary market transaction The buying and selling of existing financial securities No new funds raised and therefore no direct impact on original issuer of security Transfer of ownership from one saver to another saver Provides liquidi

33、ty, which facilitates the restructuring of portfolios of security owners第28页/共43页第二十八页，共44页。Direct and intermediated finance Direct finance Users of funds obtain finance through primary market via direct relationship with providers (savers) Advantages Avoids costs of intermediation Increases access

34、to diverse range of markets Greater flexibility in range of securities users can issue for different financing needs Disadvantages Matching of preferences Liquidity and marketability of a security Search and transaction costs Assessment of risk, especially default risk(cont.)第29页/共43页第二十九页，共44页。Dire

35、ct and intermediated finance (cont.)(cont.)第30页/共43页第三十页，共44页。Direct and intermediated finance (cont.) Intermediated financial flow markets A financing arrangement involving two separate contractual agreements whereby the saver provides funds to an intermediary and the intermediary provides funding

36、to the ultimate user of the funds(cont.)第31页/共43页第三十一页，共44页。Direct and intermediated finance (cont.)(cont.)第32页/共43页第三十二页，共44页。 Advantages Asset transformation Borrowers and savers are offered a range of products Maturity transformation 成熟完备(wnbi) Borrowers and savers are offered products with a ran

37、ge of terms to maturity Credit risk diversification and transformation 变化，多样性 Savers credit risk limited to the intermediary, which has expertise and information Liquidity transformation Ability to convert financial assets into cash Economies of scale Financial and operational benefits of organisati

38、onal size and business volumeDirect and intermediated finance (cont.)第33页/共43页第三十三页，共44页。 Wholesale markets Direct financial flow transactions between institutional investors and borrowers Involves larger transactions Retail markets Transactions conducted primarily with financial intermediaries by t

39、he household and small- to medium-sized business sectors Involves smaller transactions(cont.)Wholesale and retail markets第34页/共43页第三十四页，共44页。Wholesale and retail markets (cont.)第35页/共43页第三十五页，共44页。 Wholesale markets in which short-term securities are issued (primary market transaction) and traded (s

40、econdary market transaction) Securities highly liquid Term to maturity of one year or less Highly standardised form Deep secondary market No specific infrastructure or trading place Enable participants to manage liquidity(cont.)Money markets第36页/共43页第三十六页，共44页。(cont.)Money markets (cont.)第37页/共43页第三

41、十七页，共44页。 Money market submarkets exist for: central banksystem liquidity and monetary policy inter-bank market bills market commercial paper market negotiable certificates of deposit (CDs) marketMoney markets (cont.)第38页/共43页第三十八页，共44页。Capital markets Markets in which longer term securities are iss

42、ued and traded with original term-to-maturity in excess of one year Equity market Corporate debt market Government debt market Also incorporate use of foreign exchange markets and derivatives markets Participants include individuals, business, government and overseas sectors第39页/共43页第三十九页，共44页。1.5 Flow of funds and market relationships Sectorial flow of funds 扇形(shn xn)的 The flow of funds between business, financial institutions, government and household sectors and the rest