货币银行 Chapter 3 英文原版教材课件.pptVIP

Chapter 3 Financial Instruments, Markets, and Institutions Learning Objectives Envision the flow of funds between savers and borrowers in a modern macroeconomy Describe the basic differences between debt and equity and how these tools facilitate the flow of funds between savers and borrowers Identify how financial intermediaries assist the transfer of funds from lenders to borrowers Flow of Funds Financial system provides a transmission mechanism between saver-lenders and borrower-spenders. Savers benefit—earn interest Investors benefit—access to money otherwise not available Economy benefits—efficient means of bringing savers and borrowers together Flow of Funds (Cont.) Funds flow indirectly from ultimate lenders [households] through financial intermediaries [banks or insurance companies] or directly through financial markets [stock exchange/bond markets] to ultimate borrowers [business firms, government, or other households] (See Figure 3.1) In order for financial system to function smoothly, must be adequate information about the markets and their operation FIGURE 3.1 Flow of funds from lenders to borrowers. Financial Instruments and Markets Primary Markets Market for issuing a new security and distributing to saver-lenders. Investment Banks—Information and marketing specialists for newly issued securities. Secondary Markets Market where existing securities can be exchanged New York Stock Exchange American Stock Exchange Over-the-counter (OTC) markets Financial Instruments and Markets (Cont.) Bonds Represent Borrowing Agreement by issuer to pay interest on specified dates and redeem the bond upon maturity. Consols—Bond with no maturity date, pay interest forever Coupon Securities—Attached to bond and sent in to collect interest [generally semi-annually] Zero-coupon—Sold at price well below face value. Collect interest when the bond matures. Tax Exempt—Interest earned is not taxed (issued by state, local, or municipal governments). Financial Instruments and