金融英语PPT1.pptVIP

The Players Advantages in the intermediary role 1. Pool sources of small investors and lend considerable amount to firms or conduct large-scale trading 2. By lending to many borrowers to achieve the diversification and reduce the risk they bear 3. Due to economies of scale, intermediaries can build expertise to estimate or monitor risk The next two slides will show significant differences between the balance sheets of financial intermediaries and nonfinancial business Table 1.3 Balance Sheet of Commercial Banks ※ Financial intermediaries earn interest rate spread at the expense of suffering default risk of business firms ※ Financial intermediaries are usually with a high percentage level of liability, which can increase the profitability for shareholders substantially ※ The risk for financial intermediaries is high, so they need rigorous risk management systems Table 1.4 Balance Sheet of Nonfinancial U.S. Business The Players Investment Bankers Financial institutions specializing in the sale of new securities to the public, typically by underwriting (承銷) the issue Differences from commercial banks Don’t conduct the business of retail deposits and loans Raise their funds through issuing corporate bonds or borrowing money from other financial institutions Firms do not directly market their securities to the public. Instead, they hire investment bankers to represent them to the investing public Primary market: a market in which new issues of securities are offered to the public Secondary market: previously issued securities are traded among investors 1.7 RECENT TRENDS Globalization (國際化) Tendency toward a worldwide investment environment, and the integration of international capital markets Raise money in other currency American Depository Receipts (ADR): For Americans, ADR are domestically traded securities that represent claims on foreign stock shares Diversification to improve performance World Equity Benchmark Share (WEBS): By the same depository structure a