货币金融史学生用课件.pdf

Chapter 8 An Economic Analysis of Financial Structure © 2005 Pearson Education Canada Inc. Puzzles of Financial Structure 1. Stocks are not most important source of external finance for businesses 2. Issuing marketable securities not primary funding source for businesses 3. Indirect finance (financial intermediation) is far more important than direct finance 4. Banks are most important source of external finance 5. Financial system is among most heavily regulated sectors of economy 6. Only large, well established firms have access to securities markets 7. Collateral is prevalent feature of debt contracts 8. Debt contracts are typically extremely complicated legal documents with restrictive covenants 2 Sources of External Finance in Canada and US Canada US 3 Sources of Foreign External Finance 4 Transaction Costs and Financial Structure 1. Transaction costs hinder flow of funds to people with productive investment opportunities 2. Financial intermediaries make profits by reducing transaction costs (1) Take advantage of economies of scale Example: Mutual Funds (2) Develop expertise to lower transaction costs Explains Puzzle 3 5 Adverse Selection and Moral Hazard: definitions 1. Adverse Selection (1) Before transaction occurs (2) Potential borrowers most likely to produce adverse outcomes are ones most likely to seek loans and be selected 2. Moral Hazard: (1) After transaction occurs (2) Hazard that borrower has incentives to engage in