台中央大学货币银行学MB.Chapter 8.ppt

Chapter 8 An Economic Analysis of Financial Structure This chapter provides an economic analysis of how financial structure is designed to promote economic efficiency. It explains why financial contracts are written as they are and why financial intermediaries are more important than securities markets for getting funds to borrowers. It explains how the performance of the financial sector affects economic growth and why financial crises occur. Basic Puzzles about Financial Structure Throughout the world 1. stocks are not the most important source of external financing for businesses. 2. Issuing marketable debt and equity securities is not the primary way in which businesses finance their operations. 3. Indirect finance, which involves the activities of financial intermediaries, is many times more important than direct finance, in which businesses raise funds directly from lenders in financial markets. 4. Banks are the most important source of external funds used to finance businesses. 5. The financial system is among the most heavily regulated sectors of the economy. 6. Only large, well-established corporations have access to securities markets to finance their activities. 7. Collateral is a prevalent feature of debt contracts for both households and businesses. 8.?Debt contracts are typically extremely complicated legal documents that place substantial restrictions on the behavior of the borrower. An important feature of financial markets is that they have substantial transaction and information costs. An economic analysis of how these costs affect financial markets provides us with solutions to the eight puzzles, which in turn provides us with a much deeper understanding of how our financial system works. Transaction Costs Financial intermediaries reduce transaction costs through economies of scale and expertise. Economies of scale The reduction in transaction costs per dollar of investment as the size