金融学（第四版）课件：Financial Innovation

FinancialInnovation

2InnovationThedrivingforcebehindinnovationisthatparticipantsintheeconomyaresimplytryingtocameascloseaspossibletoachievingtheirobjectivesifcircumstancesposeabarriertoachievinganobjective,thereisanincentivetofindawayaroundtheobstacle“necessityisthemotherofinvention”3CausesofFinancialInnovationNewcomputerandinformationtechnologiesavailableAvoidanceofregulationsIncreasedcompetitionfromotherfinancialandnonfinancialinnovationsHighervolatilityofprices,inflation,interestrates,andexchangerates4TheBeginningRegulatoryStructureTheregulatorystructureinplaceatthebeginningofthe1970swasaproductoftheGreatDepressionTheGlass-SteagallActof1933createdinterestrateceilings(RegulationQ)createddepositinsuranceplacedlimitsonthetypesofassetsthatcommercialbankscouldhold5TheBeginningRegulatoryStructureInterestRateCeilingsinterestpaymentsondemanddepositswereprohibitedinterestratesontimeandsavingsdepositswerenottoexceedceilingssetbyregulatorsbyholdingdowninterestratesondeposits,theratesonloanscouldalsobehelddownreducingthebanks’incentivestoseekhigh-risk,high-yieldloans6TheBeginningRegulatoryStructureFDICthepresenceofdepositinsuranceeliminatedbankrunsorpanics7TheBeginningRegulatoryStructureLimitationsonAssetstheGlass-SteagallActseparatedcommercialbankingfrominvestmentbankingbankswerenolongerallowedtoownorunderwritecorporatesecuritiestheassetsthatbankswerepermittedtoholdwerelimitedtocashassets,governmentsecurities,andloans8TheBeginningRegulatoryStructureInaddition,tocurbloanstostockspeculators,limitswereputontheproportionofstockpurchasesthatcouldbefinancedbyborrowingtheselimitswerecalledmarginrequirements9FinancialInnovationAnFIcomparesthecostsandbenefitsassociatedwithalteringaprevailingportfoliopracticeifthebenefits>costs,theFIhasaclearincentivetoinnovateandaltertheprevailingpractice10FinancialInnovationSincethe1970s,computerandtelecommunicationstechnologieshavebecomeincreasinglyavailablehavereducedthetransactionscostsassociatedwithmanaging,moving,andmonitoringfundshaveallowedfortheglobalizationoffinancialmarkets11FinancialInnovationTechnologicaladvanceshavealsoallowedtherisksassociatedwithaparticularfinancialassettobeunbundledallowsthespecificrisksofonefinancialassettobebornebydifferentinvestorsmakesthefinancialmarketmoreefficient12FinancialInnovationThepersistentinflationandrisinginterestratesinthelate1960sand1970sledtoanincentiveforbankstodevelopnewproductstoavoidthebindingeffectsofRegulationQnetlenderssimplylookedforalternativesoutsidethebankingsystem(disintermediation)banksrespondedbydevelopingmoneymarketmutualfunds13FinancialInnovationSincethemid-1970s,bankshavebeenchallengedbyasharpriseincompetitionformotherdomesticandglobalfinancialandnonfinancialinstitutionstorespond,allFIshavebecomelessspecializedandmorealikebankholdingcompaniesofferinvestmentandfinancialadvice,leasing,dataprocessing,andtaxplanningfinancialholdingcompaniesprovideservicesthatgofarbeyondthescopeofbanking14FinancialInnovationThegreatervolatilityofprices,stockvalues,interestrates,andexchangeratesincreasestherisksassociatedwithintermediationthishasledtothedevelopmentofnewassetsfinancialforwards,futures,andoptionsmarketsattempttohedgeinterestrateandexchangeraterisks15TheReasonsforFinancialInnovationoverthePast40YearsCostsFellComputerandtelecommunicationstechnologyreducedthetransactionscostsofmanaging,moving,andmonitoringfunds.BenefitsIncreasedTheriseininflationandinterestratescauseddisintermediationandincreasedtheprofitsofgettingaroundcertainregulationssuchasRegulationQ.Increasedglobalanddomesticcompetitionfromotherfinancialintermediariesincreasedthebenefitsofinnovationtomeetandbeatthecompetition.Increasedvolatilitycausedthedevelopmentofinnovationstohedgetherisksoflossesfromincreaseduncertainty.16EarlyFinancialInnovationsReserverequirementsspecifythereserveassetsthatbanksandotherdepositoryinstitutionsmustholdasaproportionoftheirdepositliabilitiesifthererequirementsforcebankstoholdmorereservesthantheyotherwisewould,thisconstitutesataxonbankearningswhatcannotbeloanedcannotearninterest17EarlyFinancialInnovationsOnewaytoreducethisburdenisforbankstoshiftfromdepositstonondepositliabilitiestheseincludeEurodollarborrowings,fedfunds,andrepurchaseagreementsexemptfromreserverequirementsnotsubjecttoRegulationQceilings18EarlyFinancialInnovationsEurodollarsdollar-denominateddepositsheldabroadU.S.banksborrowEurodollardepositstoobtainadditionalfunds19EarlyFinancialInnovationsFedFundsreservesthatbankstradeamongthemselvesforperiodsofonetoseveraldaystheinterestratedeterminedinthemarketforfedfundsisthefedfundsratestartinginthe1960s,largebankscametolookatthefedfundsmarketasapermanentsourceoffundssmallerbankswithfewerlendingopportunitiestendedtobenetlendersinthismarket20EarlyFinancialInnovationsOvernightRepurchasingAgreementanagreementinwhichabanktakesagovernmentsecurityfromitsassetportfolioandsellsitwiththesimultaneousagreementtobuyitbacktomorrowatapricesettodaythedifferenceinthesellingandbuyingpricesistheinterestthelenderreceivesfromthebank21EarlyFinancialInnovationsRetailSweepAccountssweepbalancesoutoftransactionsaccountsthataresubjecttoreserverequirementsandputstheminotherdeposits(suchasmoneymarketdepositaccounts)thatarenot22EarlyFinancialInnovationsNegotiableCertificatesofDeposit(CDs)creationofasecondarymarketforCDsin1961acorporationwithexcessfundscaninvestinanegotiableCDwiththeknowledgethattheCDcouldbesoldinthesecondarymarketiffundswereneededbeforetheCDmaturesreserverequirementsonallnegotiableCDswereeliminatedbytheendof197323EarlyFinancialInnovationsAstheseinnovationsweakenedtheeffectivenessofvariousregulations,regulatorsrecognizedthedifficultyofcontrollingfinancialflowsandthemarketforfinancialservicestheydecidedtoderegulatethemarketintheearly1980s24DeregulationLegislationwasenactedbyCongressin1980and1982phasedoutregulationQexpandedtheassetandliabilitypowersofbanksandthriftsallowedthriftstooffercheckabledepositsestablishedreserverequirementsthatappliedtoandwerethesameforalldepositoryinstitutions25DeregulationTwootherlawsinthemid-andlate-1990sprovidedfurtherderegulationeliminatedmostrestrictionsoninterstatebankingallowedbankstomergewithsecuritiesandinsurancefirms26InnovationinthePaymentsSystemThepaymentsmechanismisthemeansbywhichtransactionsarecompletedhowmoneyistransferredamongtransactorsThepaymentsmechanismhasbeensignificantlyaffectedbychangesintechnologyATMmachines,cashcards,debitcards,homebanking,directpaydeposit,directbilling27InnovationinthePaymentsSystemAnelectronicfundstransfersystemdoesnoteliminatetheneedfordepositaccountsitisjustamoreefficientwayoftransferringfundsfromonedepositaccounttoanother28DerivativesandOtherRecentInnovationsAderivativeisaninstrumentthatisroutinelyusedtoseparatethetotalriskofafinancialassetintosubpartsderivesitsvaluefromtheunderlyingassetsexamplesincludeforward,futures,options,andswapagreements29Forward,Futures,andOptions

AgreementsAfirmcanhedgeexchangerateriskthroughaforeignexchangeforwardagreementAlendercanusefuturesoroptionstohedgetheinterestrateriskassociatedwithalong-termloan30SwapAgreementsInterestrateswapsareafinancialinnovationusedtoreduceinterestraterisktwofinancialinstitutionswilltradeinterestpaymentstreamstoguaranteethattheirrespectivepaymentinflowswillmorecloselymatchtheiroutflows31ASimpleInterestRateSwap32CurrencySwapsInacurrencyswap,onepartyagreestotradeperiodicpayments,overaspecifiedperiodoftime,inagivencurrency,withanotherpartywhoagreestodothesameinadifferentcurrencyusedasahedgeagainstforeignexchangeriskoveramultiyearperiod33CreditDerivativesCreditderivativestransfertheriskthatthereturninacredittransactionfallsbelowacertainratederivetheirvaluefromtheunderlyingdebtinstrumentsforthepurchaser,theyhedgedefaultriskfortheseller,ariskistakenoninreturnforafee34SecuritizationSecuritizationistheprocesswherebyrelativelyilliquidfinancialassetsarepackagedtogetherandsoldtoinvestorsturnsrelativelyilliquidinstrumentsintoliquidinvestmentscalledasset-backedsecuritiesoriginatedinthemortgagemarketintheearly1980shasspreadtootherloanandleasemarkets35OtherCharacteristicsoftheFinancialSystemIncreasedcompetitionhasledtolowerprofitmarginsFIsandnonfinancialinstitutionshavemovedintoeachothers’marketsMergersarebringingaboutincreasedconcentrationFIshavebecomeincreasinglyautomatedGeographicalbarriersareeroding36FinancialMarketChangesinthe1990sandEarly2000sFinancialMarketChangesInterestrateceilingsareeliminated,therebyincreasingcompetitionandreducingprofitmargins.Securitizationisincreasingandspreadingfromthemortgagemarkettomanyothermarkets.Collateralizedmortgageobligationsallowprepaymentriskstobedifferentfordifferentclassesofbondholders.FIsandpaymentsmechanismsaremoreautomated.FIsarelessspecializedduetomergerswithotherfinancialservicesfirmsandengaginginotheractivities.Banksarerelyingonfeeincomeastheirshareofintermediationdeclines.FIsaremakingextensiveuseofderivativesandotherinstrumentstounbundlerisks.Geographicalbarrierstodeposittaking,andloangranting,andotherfinancialservicesarereduced.37SummaryofMajorPointsFinancialinnovationiscreationofnewfinancialinstruments,markets,andinstitutionstoincreaseprofitabilitythelast40yearshaveseenahighleveloffinancialinnovationthebenefitsofinnovatinghavebeengreaterthanthecostsmanyoftheinnovationshavebeenduetoadvancesininformationandcomputertechnologies38SummaryofMajorPointsInthe1970s,muchinnovationcenteredaroundevadingregulationsregulationsincludedsettingreserverequirements(RegulationD)andinterestrateceilings(RegulationQ),limitingentry,separatingcommercialandinvestmentbanking,andspecifyingmarginrequirements39SummaryofMajorPointsInadditiontoinformationandcomputertechnologyadvances,theincentivestoinnovatehaveincludedrisinginterestratesthatledtodisintermediation,volatileinterestratesthatincreasedinterestraterisk,andincreasedcompetition40SummaryofMajorPointsTherelabelingofdepositliabilitiesasnondepositliabilities,whichavoi