国际银行学1.ppt

Conclusion As a result of the forces of competition unleashed deregulation, financial innovation and globalisation banks have: downsized diversified restructured expanded balance sheets Clearly the expansion of balance sheets have created problems – banking crisis but the trend of consolidation will continue after the crisis. * * * * * * * * * * * * * * * * * * * * * * * * * * * * Lecture 1Prof. Kent Matthews Financial Intermediation and Trends in International Banking Lecture Structure Review the theory of financial intermediation The Loanable Funds Theory Why banks are special Trends in International Banking Two-Period Model U(C1,C2) Period 1 Period 2 Interest rate – Financial Opportunity Line Capital market OB=(1+r)OA O A B A model of Intermediation Savers lend by demanding claims to capital Investors borrow by supplying claims to capital Savings by households (and firms) represent the flow demand for financial securities (bonds, equity) Investment by firms represent the flow supply of financial securities The Model The price of financial securities and the rate of interest vary inversely The flow demand for securities varies inversely with the price of securities (positively with the rate of interest) The flow supply of financial securities varies positively with the price of securities (negatively with the rate of interest) Transactions Costs Search Costs Contract costs Screening costs monitoring costs enforcement costs Include transactions costs What do banks offer that financial markets don’t? Maturity transformation Liquidity creation Risk transformation Trends in International Banking Deregulation Financial Innovation Globalisation Forces released by this process: a) eurodollar market b) competition c) regulatory arbitrage Phases of deregulation Lifting of controls on lending and interest rate ceilings relaxation of legal separation of financial services by providers competition of incumbents, new entrants and other FIs Forces of Financial Innovat