资本市场和金融机构1-1课件

CAPITALMARKETSANDFINANCIALINSTITUTIONS(BUS498)ByARTURORUBALCAVA1Thiscourseexamines:ThewayinwhichFinancialMarketsfunction

ThepivotalroleplayedbyFinancialinstitutions

Mainemphasis:CoverageofCanadianmarketsandinstitutions

Coverageofriskmeasurementandmanagement

Risk-returntradeoffsavailabletoinvestors.

2IntroductionFinancialSystemFinancialMarketsFinancialInstitutionsEconomicfunctionsofFIsFinancialInnovationRegulationoftheFinancialSystemConclusions32.FinancialMarketsMarketswherepartiesbuyandsellfinancialinstrumentsincludingstocks,bonds,options,foreignexchangecontracts.Example:BCEneedstofinancea$400milliontelecomproject.Itcangetthemoneyvia:A)FinancialMarketsbyborrowingdirectlyfrominvestors(e.g.,households)B)ByborrowingindirectlyfromhouseholdsviaaFinancialIntermediary(e.g.,acommercialbank).

Households

Nortel$$BondsBondsFinancialMarketsA)5Financialmarkets:

ClassificationMoneyMarket.ShorttermdebtinstrumentsMaturityofsecurities<1yearE.g.,commercialpaper,T-billsCapitalMarketsMaturityofsecurities>1yearDebtMarkets(GovernmentSecuritiesMarket,MunicipalBondMarkets,CorporateDebtMarkets)StockMarket(TSX),DepositaryReceiptsMarketForeignExchangemarkets.MarketsinwhichforeigncurrenciesaretradedOtherMarkets:FinancialDerivativeMarkets6FinancialMarkets:AlternativeclassificationPrimaryMarket.

Marketfornew

issueofsecuritiessoldtoinitialbuyersbyinvestmentbankers.

SecondaryMarket.

Marketinwhichalready-issuedsecuritiesaretradedamonginvestorsBrokers.Matchbuyersandsellersforafee.

Dealers.Sellandbuysecuritiesfrombuyersandsellers.7DomesticandInternationalFinancialMarketsDomesticMarketBanksMoneyMarketBondMarketStockMarketInternationalMarketInternationalBondMarketForeignBondsEurobondsEurocurrenciesForeignstockmarkets9InternationalBondMarket

A)ForeignBonds Abondissuedbyaforeignfirmorgovernmentforsalein anothercountryinthecurrencyofthatcountry.

Example?

Yankeebonds.

U.S.dollar

denominatedbonds issuedwithinthe

U.S.

byaforeignborrower(e.g.Bombardier). Others:Samuraibonds,Bulldogs

B)EurobondMarket:Eurobonds

Abondissuedbyaforeignfirmorgovernmentforsaleoutside thecountryinwhosecurrencyitisdenominated.

Example?ACanadiandollar-denominatedbondforsaleto investorsoutsideofCanada.10c)Eurocurrencymarket:Eurocurrencies

Internationalcurrenciesthataredepositedinbanksoutsidetheirhomecountries.

Examples:Eurodollars.AUSdollardepositedinabankoutsidetheUS.Otherexamples:Euroeuros,Euroyens,etc.

InternationalBankLoansandSyndicateCredits:Ex.LoansinEurocurrency(Eurocredits)ForeignStockMarketsE.g.,SharesofPotashCorp.arelistedontheTSX,andNYSE.11FinancialMarkets(Continued)Howborrowersobtainfunds? MoneyMarket.-Shorttermdebt CapitalMarkets.-Longtermdebtandequity WhentofinanceintheMoneyMkt?WhenintheCapitalMkt? WhentofinancewithLongTermDebt?WhenwithEquity? Whattypeoffirmswillfinancemorewithequitythanwithdebt?Whentofinanceinthedomesticorininternationalmarkets?Advantagesforlenders Debtvs.Equity133.FinancialInstitutions(FIs)

TheflowoffundsfromlenderstoborrowersisfacilitatedbyFinancialInstitutions ThiscanbedoneA)Directly

Inthefinancialmarketsthroughtheassistanceofsecuritiesfirms(investmentbanks).B)Indirectly

ThroughOtherfinancialintermediaries (e.g.,viaacommercialbank).

14A)DirectFinanceProcessbywhichfundsmovedirectlyfromlenderstoborrowersassistedbyaninvestmentbank.Itdoesnotimplyanassetassettransformationfunction. Forexample:Researchinmotionissues$1-billionofstockdirectlytoinvestorswiththeassistanceofCIBCWorldMarkets(investmentbank) Oncethefinancialclaimshavebeenissued,theymayberesoldtootherinvestorsalsobyInvestmentbanksthroughtheirbrokerageordealerunits.15TheFinancialSystem.FinancialInstitutionsFinancialMarketsLender-Savers1.Households2.BusinessFirms3.Governments4.Foreigners5.FIsBorrower–Spenders1.BusinessFirms2.Government3.Households4.Foreigners5.FIsDIRECTFINANCE(AssistedbySecuritiesfirms)INDIRECTFINANCEFunds(e.g.,deposits)Funds(e.g.,loans)FundsFundsFunds(e.g.,Gov’tbonds)(e.g.,shares)(e.g.,shares)17FinancialIntermediariesA)DepositoryInstitutions.

FIsthattakedepositsandmakeloansChartered(commercial)banksandnearbanks(trustandmortgageloancompanies,andcreditunions)Mainbusiness.Takedeposits(e.g.,demanddeposits,shortandlongtermdeposits)thatareusedtoprovideloans(consumer,commercial,mortgage)18

B:Non-DepositoryInstitutions

ContractualSavingsInstitutions.FIsthatacquirefundsatperiodicintervalsonacontractualbasis.LifeInsurancecompanies.LifeandhealthriskprotectionP&CInsurancecompanies.Protectionagainsttheft,fire,accidents.PensionFu