岭南学院货币银行学课件

1、Course: Money and bankingLecturer: zhou tianyun 2011-91共四十九页Information:SyllabusTextbook WSJ and EconomistCalculators and ExcelTests and MemosOffice Hours:共四十九页GradingClass participation + Assignments：20%Group Project 20% Final exam：60% (Multi choices + Q&A）3共四十九页Domestic resources 财经网 中国财经信息网 东方财富网

2、 中金在线(zi xin)中国证券报上海证券报 中国债券信息网和讯财经网 中国证券网4共四十九页Foreign Resources Wall Street Journal/ Asia CNN MONEY New York Times online Free registration required. Washington Post online BBC news online Reuters online The Economist Course readings from NY Fed Perspectives and Data from Haver5共四十九页International

3、OrganizationsInternational Monetary Fund Bank for International Settlements.Central banks central bank. Organization for Economic Cooperation and Development. Developed country research organization6共四十九页Road MapFinancial market (bond /stock/foreign exchange market)Financial institutionsStructure of

4、 financial systemBanks and other financial institutionsFinancial innovationMoney and monetary policyMoney and business cycleMoney and inflation Money and interest rate Conduct of monetary policy Fiscal and monetary policy 7共四十九页Chapter 1Why Study Money, Banking, and Financial Markets? 共四十九页Why Study

5、 Financial Markets? 1.Channel funds from savers to investors, thereby promoting economic efficiency2. Affect personal wealth and behavior of business firmsWhy Study Banking and Financial Institutions? 1.Financial IntermediationHelps get funds from savers to investors2.Banks and Money SupplyCrucial r

6、ole in creation of money3. Financial InnovationWhy Study Money and Monetary Policy?1.Influence on business cycles, inflation, and interest rates9共四十九页To examine how financial markets, such as bond, stock and foreign exchange markets work1.Channel funds from savers to investors, thereby promoting eco

7、nomic efficiency2.Affect personal wealth and behavior of business firmsWhy Study Financial Markets?10共四十九页Bond Market11共四十九页The Bond Market and Interest RatesA security (financial instrument) is a claim on the issuers future income or assetsA bond is a debt security that promises to make payments pe

8、riodically for a specified period of time （特定的时间(shjin)内定期支付）An interest rate is the cost of borrowing or the price paid for the rental of fundsQ1: What happened in the late 1970s?12共四十九页Stock Market13共四十九页The Stock MarketCommon stock represents a share of ownership in a corporationA share of stock

9、is a claim on the earnings and assets of the corporationQ1: How is a stock valued?Q2: What is the Dow Jones Industrial Avg?Q3: What is the difference between Real and Nominal?14共四十九页Foreign Exchange Market15共四十九页The Foreign Exchange MarketThe foreign exchange market is where funds are converted from

10、 one currency into anotherThe foreign exchange rate is the price of one currency in terms of another currencyThe foreign exchange market determines the foreign exchange rateQ1: What is Purchasing Power Parity and what does that have to do with hamburgers?16共四十九页Why Study Banking and Financial Instit

11、utions?To examine how financial institutions such as banks and insurance companies work.1.Financial Intermediation Helps get funds from savers to investors2.Banks and Money Supply: Crucial role in creation of money3.Financial Innovation17共四十九页Banking and Financial InstitutionsFinancial Intermediarie

12、sinstitutions that borrow funds from people who have saved and make loans to other peopleBanksinstitutions that accept deposits and make loansOther Financial Institutionsinsurance companies, finance companies, pension funds, mutual funds and investment banksFinancial Innovationin particular, the adv

13、ent of the information age and e-finance18共四十九页Why Study Money and Monetary Policy?To examine the role of money in the economy Influence on business cycles, inflation, and interest rates19共四十九页Money and Business Cycles20共四十九页Money and Business CyclesEvidence suggests that money plays an important ro

14、le in generating business cyclesRecessions (unemployment) and booms (inflation) affect all of usMonetary Theory ties changes in the money supply to changes in aggregate economic activity and the price level.21共四十九页Money and the Price Level22共四十九页Money Growth and Inflation23共四十九页Money and InflationTh

15、e aggregate price level is the average price of goods and services in an economyA continual rise in the price level (inflation) affects all economic playersData shows a connection between the money supply and the price levelQ1: What is a regression? Plot a regression line on the cross country data a

16、bout inflation. 24共四十九页Money Growth and Interest Rates25共四十九页Money and Interest RatesInterest rates are the price of moneyPrior to 1980, the rate of money growth and the interest rate on long-term Treasure bonds were closely tiedSince then, the relationship is less clear but still an important deter

17、minant of interest ratesQ1: When the US had a large budget surplus, there was no more need to issue long term T-Bonds, given their importance for financial firms what could they do to replace the lost bonds?26共四十九页Fiscal Policy and Monetary Policy27共四十九页Fiscal Policy and Monetary PolicyMonetary poli

18、cy is the management of the money supply and interest ratesConducted in the U.S. by the Federal Reserve Bank (Fed)Fiscal policy is government spending and taxationBudget deficit is the excess of expenditures over revenues for a particular yearBudget surplus is the excess of revenues over expenditure

19、s for a particular yearAny deficit must be financed by borrowing28共四十九页How We Study Money and BankingBasic Analytic Framework1.Simplified approach to the demand for assets2.Concept of equilibrium3.Basic supply and demand approach to understand behavior in financial markets4.Search for profits5.Trans

20、actions cost and asymmetric information approach to financial structure6.Aggregate supply and demand analysisFeatures1.Applications 2. Special-interest boxes 3. Following the Financial News boxes4.Reading the Wall Street Journal 5.Web Exercises and URLs29共四十九页DefinitionsAggregate OutputGross Domesti

21、c Product (GDP) = Value of all final goods and services produced in domestic economy during yearAggregate IncomeTotal income of factors of production (land, capital, labor) during yearDistinction Between Nominal and RealNominal = values measured using current pricesReal = quantities, measured with c

22、onstant prices30共四十九页DefinitionsAggregate Price Level nominal GDPGDP Deflator（GDP平减指数(zhsh)） = real GDP $10 trillion GDP Deflator = = 1.11 $9 trillionConsumer Price Index (CPI) price of “basket” of goods and services31共四十九页DefinitionsGrowth Rates and the Inflation Rate32共四十九页Chapter 2Chapter 2 An Ov

23、erview of the Financial System共四十九页Purpose of the Financial SystemProvides channels to transfer funds from savers to borrowers. Savers are suppliers of funds.Borrowers are demanders of funds.Financial markets issue claims on borrowers directly to savers.Financial intermediaries act as go-betweens by

24、 holding a portfolio of assets and issuing claims to savers.34共四十九页Moving Funds Through the Financial System35共四十九页Classifications of Financial MarketsDebt Markets: Equity Markets: Common stocksPrimary Market: New security issues sold to initial buyersSecondary Market: Securities previously issued a

25、re bought and soldExchanges: Trades conducted in central locations Over-the-Counter Markets: Dealers at different locations buy and sellMoney Market: Short-term (maturity 1 year)36共四十九页Internationalization of Financial MarketsInternational Bond Market1. Foreign bonds2. Eurobonds Now larger than U.S.

26、 corporate bond marketWorld Stock MarketsU.S. stock markets are no longer always the largest: Japan sometimes larger （20世纪80年代(nindi)中期）37共四十九页Key Services Provided by the Financial System38共四十九页Financial IntermediariesDepository InstitutionContractual Savings InstitutionsInvestment Intermediaries1.

27、Engage in process of indirect finance2.More important source of finance than securities markets3.Needed because of transactions costs and asymmetric information39共四十九页Transactions Costs1. Financial intermediaries make profits by reducing transactions costs2.Reduce transactions costs by developing ex

28、pertise and taking advantage of economies of scale40共四十九页Risk Sharing1. Create and sell assets with low risk characteristics and then use the funds to buy assets with more risk (also called asset transformation).2.Also lower risk by helping people to diversify portfolios41共四十九页Asymmetric Information

29、: Adverse Selection, and Moral HazardAdverse Selection1.Before transaction occurs2.Potential borrowers most likely to produce adverse outcomes are ones most likely to seek loans and be selectedMoral Hazard1.After transaction occurs2.Hazard that borrower has incentives to engage in undesirable (immoral) activities making it more likely that wont pay loan backFinancial intermediaries reduce adverse selection and moral hazard problems, enabling them to make profits