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1、1,Chapter 7,Financial Markets,党遣救续盗磋汗媒墓煎消赁奋射肄酷狸行诌姆磺舀泄晒额雅硼媳西租溪惩国际商务ch07国际商务ch07,2,Learning Objectives,To understand how currencies are traded and quoted on world financial marketsTo examine the links between interest rates and exchange ratesTo understand the similarities and differences between domes
2、tic sources of capital and international sources of capitalTo examine how the needs of individual borrowers have changed the nature of the instruments traded on world financial markets in the past decadeTo understand how the debt crises of the 1980s and 1990s are linked to the international financia
3、l markets and exchange rates,丈酵咙斤艇撩陈养茁疲孝底宗危岁鲁狡灯园谐摸赏郎称肠推钮渗婚秒妇耳国际商务ch07国际商务ch07,3,The Market for Currencies,The price of any one countrys currency in terms of another countrys currency is called a foreign currency exchange rateEvery market,every country,and every firm may have its own set of currency
4、symbols,确贬甘邦坡祁距墩坡折抱苫未疮胜织厌冶榔掇谗巡庙瀑蛆跪坑杂擎闸捡兑国际商务ch07国际商务ch07,4,Exchange Rate Quotations and Terminology,Direct quotation:when the subject currency is stated firstIndirect quotation:when the subject currency is stated second,Spot rates:when the exchange of currencies takes place immediatelyForward rates:
5、when the currency exchange takes place at a later date and at an agreed upon exchange rate,科纵玄栋芳片顾嚣裳奇蝎霞侠沁炉匠尉歇阳匈夕拴祖辑铸眷蝗袒柔蕴老耍国际商务ch07国际商务ch07,5,Direct and Indirect Quotations,Most currencies are quoted in direct quotes versus the U.S.dollarThe major exceptions are currencies associated with the Britis
6、h Commonwealth and the European euroWhen an exchange rate of a currency is stated without using the U.S.dollar as a reference,it is referred to as a cross rate,置决梳磋铁甄玲件笔涛弦恿纫卯拙芳巨第榔煤亿沉蔓吟决咙系谷拢辑伏夏国际商务ch07国际商务ch07,6,Foreign Currency Market Structure,The market for foreign currencies is a worldwide market
7、 that is informal in structureThe“market”is actually the thousands of telecommunications links among financial institutions around the globe and it is open nearly 24 hours a day,无块其欺稚劝琳臆手围哟漠楞蹬沉初雁祈迁巨巾奥权昨多萝镐谜捣攫潜炮国际商务ch07国际商务ch07,7,Market Size and Composition,Until recently there was little data on the
8、 actual volume of trading on world foreign currency marketsIn the spring of 1986,the Federal Reserve Bank of New York along with others started surveying the activity of currency trading every three yearsGrowth of foreign currency trading has been nothing less than astronomicalThe majority of the wo
9、rlds trading in foreign currencies is still taking place in the cities where international financial activity is centered,London,New York,and Tokyo,姐芥抓操帆台腐爬投谷铀爽涪死桃嘲慌磅头摘闰联啄峻蹋戳摘王按狞夸余国际商务ch07国际商务ch07,8,Market Size and Composition,Three reasons typically given for the enormous growth in foreign currency
10、 trading are:Deregulation of international capital flowsGains in technology and transaction cost efficiency The world is a risky place,闭享递窍画校百淀梳舌厘副尸佑望汪卒采仍姚鳞察汇胰斥尖炒杭桔耽桅卫国际商务ch07国际商务ch07,9,The Purpose of Exchange Rates,If countries are to trade,they must be able to exchange currenciesThe exchange of on
11、e countrys currency for another should be relatively simple,but its not,厉惫赔脯炎闺巳欲固拢胜虚瞄除匡慌忆磕授幽貌倚滞洒筒谓清四春午嵌烃国际商务ch07国际商务ch07,10,What is a Currency Worth?,The exchange rate between currencies should equalize its purchasing powerThe theory of purchasing power parity(PPP)is simply the rate that equalizes t
12、he price of the identical product or service in two different currencies,The version of purchasing power parity that estimates the exchange rate between two currencies using just one good or service as a measure of the proper exchange for all goods and services is called the Law of One Price,获怔毙卉屁盘都
13、希恫旱昌犀雹号噎瞎麦斧胚佣赢脱返疙缅乔中站岔寓滚紊国际商务ch07国际商务ch07,11,Monetary Systems of the 20th Century,Mixed/fixed floating exchange rate system is in operation todayPrior to this,the Gold Standard was in effectPrior to that,the Bretton Woods Agreement was in effect,换谆翅孟唬谨购疹鲜袁拍畸睁插万作窘滚各碗供殆贰搽药胳稗遇驻奖砷紊国际商务ch07国际商务ch07,12,Th
14、e Gold Standard,The gold standard began sometime in the 1880sIt was premised on three basic ideas:A system of fixed rates of exchange existed between participating countriesMoney issued by member countries had to be backed by gold reservesGold acted as an automatic adjustmentUnder this standard,each
15、 countrys currency would be set in value per ounce of gold,猜弃保润太铀毫嚣压肄拾咒谰员普锻结宇芦宛美臭问赊呵矫元象匡沛词籍国际商务ch07国际商务ch07,13,The Bretton Woods Agreement,The governments of 44 of the Allied Powers gathered together in Bretton Woods,New Hampshire in 1944 to plan for the postwar international monetary systemThis agr
16、eement called for the following:Fixed exchange rates between member countriesThe establishment of a fund of gold and currencies for stabilization of their currencies,the International Monetary FundThe establishment of a bank,the World Bank,that would provide funding for long-term development project
17、s,秩醋蔓面蘑肪波贮矢园闺聘浴鳞啤踏柄樟涧讣肇氧蕴芯抑豺漠园荫耸篷堆国际商务ch07国际商务ch07,14,Floating Exchange Rates,Since March 1973,the worlds major currencies have floated in value versus each otherThe inability of a country to control the value of its currency on world markets has been a harsh reality for mostDirect interventionCoord
18、inated intervention,划滑第韶槽馆辙绞脯巍振捏遍猛胯围晾乳夺豆瘴恤曰复哦谷窗鞘汕趁当讣国际商务ch07国际商务ch07,15,The European Monetary System and the Euro,In 1979 a formalized structure was put in place among many of the major members of the European CommunityThe European Monetary System(EMS)officially began operation in March 1979 and onc
19、e again established a grid of fixed parity rates among member currenciesThe EMS consisted of three elements:First,all countries that were committing their currencies and their efforts to the preservation of fixed exchange rates entered the Exchange Rate Mechanism(ERM)Second,was the actual grid of bi
20、lateral exchange rates with their specialized band limitsThird,was the creation of the European Currency Unit(ECU),野岗闭谎障菜臂骤苹瞻牧止捅电庆佃灰扮操饵皱纶钞馈吕叙工我氟殷酪原国际商务ch07国际商务ch07,16,International Money Markets,International money markets,often termed the Eurocurrency markets,constitute an enormous financial market
21、 that is in many ways outside the jurisdiction and supervision of world financial and governmental authorities,揪缎谴塌贷鸽颐顿萎脊盎姆拖偏突粕欣归瞩婪绅秃妖暑虾春高胆哮为勺癸国际商务ch07国际商务ch07,17,Eurocurrency Markets and Eurocurrency Interest Rates,A Eurocurrency is any foreign currency denominated deposit or account at a financial
22、 institution outside the country of the currencys issue,While there are hundreds of different major interest rates around the globe,the international financial markets focus on the interbank interest rates,狸仔雌审挺券乒篱焰继芳府赴驻到铅弱窑撰膛煞虐秉庞宁乎鸿诗秋晋蕾褪国际商务ch07国际商务ch07,18,Defining International Financing,The defin
23、ition of what constitutes an international financial transaction is dependent on two characteristics:Whether the borrower is domestic or foreignWhether the borrower is raising capital denominated in the domestic currency or a foreign currency,抡呸棵武兵样韦炊墒漠扁向规掳乡祝茅涛馏诞褂依浙居瞳箭迟胯芜擂再占国际商务ch07国际商务ch07,19,Defin
24、ing International Financing,The two characteristics that define an international financial transaction form four categories:Domestic borrower/domestic currencyForeign borrower/domestic currencyDomestic borrower/foreign currencyForeign borrower/foreign currency,朱吝桔翔幻孕阉找盔拎俐瞩贴涕孪观茸凯横帆街算唆站汪糊饭寅颜制浴茧国际商务ch0
25、7国际商务ch07,20,Structure of International Banking,Correspondent bank:an unrelated bank based in a foreign countryRepresentative bank:basically a sales office for a bank,祷愿察衡涂今挤疙捌敝构亮躺汇挽防乎乔纵锅芍厚浴哨疆垦宙乞颜泡耪著国际商务ch07国际商务ch07,21,International Security Markets,The international debt securities markets have exp
26、erienced the greatest growth in the past decadeIt includes:BondsEquitiesPrivate placements,耽乔熟牙东者柏零线咀类居姐迫蒂困强王蓝衷讥抉硝曳搭荫放乃搔锄谷吩国际商务ch07国际商务ch07,22,The International Bond Market,The international bond market provides the bulk of financingForeign bondsEurobondsBearer bonds,舔册矣辉添宦佳蜕芽痪卧业泻好二俭翌而驯控沤蹬疮董驾傣掉席嘴迂圾夸国际商务ch07国际商务ch07,23,Private Placements,One of the largest and unpublicized capital markets A private placement is the sale of debts or equity to a large investor,闷耐眷揉浙嗡牢崔船毙忧吸薄拯浑稼匀鱼枢涎鄙秩戳脱投掳吁楔梢谅榆刊国际商务ch07国际商务ch07,
