新编金融英语教程 Chapter15 Financial Innovation and Development
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Chapter 15
Financial Innovation and Development
CONTENTS
15.1 L e a d - i n 15.2 K e y Po i n t s 15.3 L a n g u a g e N o t e s 15.4 F o l l o w - u p Ta s k s 15.5 E x t e n d e d Ta s k s
( ) 1. currency swap ( ) 2. bondholder ( ) 3. Cash flow ( ) 4. derivative contract ( ) 5. hedge risk ( ) 6. insurance company ( ) 7. financial derivative ( ) 8. financial institution ( ) 9. securities firm ( ) 10. unbundle risks
15.3 Language Notes
II. Phrases
• collateralized mortgage obligations • credit derivative • credit transaction • D regulations • derivative contracts • financial claim • financial innovation • hedge risks • interest-bearing checkable deposit
Swap agreements
Credit derivatives
Securitization
reduce interest rate and exchange rate risks
used by banks and other lenders to unbundle credit risk
15.3 Language Notes
I. Words
barrier [ˈbæriə(r)] 障碍 ceiling [ˈsi:lɪŋ] 上限 deregulate [ˌdi:ˈregjuleɪt] 放松监管 disintermediation [dɪsˌɪntəmi:dɪ'eɪʃən] 非居间化，不干预 payoff ['peɪɔ:f] 收益 fungible ['fʌndʒɪbl] 代替的 hedge [hedʒ] 避免 malleability [ˌmælɪə'bɪlətɪ] 延展性，可塑性 merge [mɜ:dʒ] 兼并 mortgage [ˈmɔ:gɪdʒ] 抵押 proceeds [ˈprəʊsi:dz] 收入，收益 securitization [sɪ'kjʊrətɪzeɪʃn] 证券化 unbundle [ʌn'bʌndl] 解绑，分散 volatile [ˈvɒlətaɪl] 易变的，不稳定的
in the 1990s
Two other laws eliminated barriers to interstate branching and allowed banks, securities firms, and insurance companies to merge.
in a globalized financial environment
15.3 Language Notes
III. Sentences
1. The fact that financial claims are fungible makes the trading of them highly receptive to computer advances. 2. Forwards, futures and option agreements are financial innovations used by financial institutions and others to reduce interest rate and exchange rate risks. 3. Securitization is the process whereby relatively illiquid financial assets are packaged together and sold off to individual investors. In essence, securitization turns these relatively illiquid instruments into quite liquid investments called asset-backed securities. 4. Securitization became popular because it provides a way of protecting against interest rate risk in an environment of increased interest rate volatility. 5.Collateralized mortgages redirect the cash flows (principal and interest) of mortgage-related products to various classes of bondholders, thus creating financial instruments with varying prepayment risks and varying returns.
15.2 Key PFra Baidu bibliotekints
15.2.2 Development of Financial Innovation
In the 1970s
many innovations were centered on evading regulations.
Beginning in 1980
the banking system was deregulated.
1. Many of the recent financial innovations can be attributed to the progress in information and computer technologies. ( ) 2. Since 1980, the control of the banking system is becoming tighter and tighter. ( ) 3. Innovations have made the financial sector more and more competitive in the various markets of the world. 4. Although the derivative security market had existed for centuries, it didn’t undergo a fast development until the mid of the 20th Century. ( ) 5. The derivative security market is the newest type of the financial security markets. ( )
Advances in computer and information technologies have made the increased competition possible and have transformed the financial system into a global system.
the mid-1960s. Finally, it will take a look at the various financial derivatives.
15.2 Key Points
15.2.1 Foundations of Financial Innovation
On the cost side, the malleability of financial claims and the application of emerging computer and telecommunications technology reduced the transactions costs associated with managing, moving and monitoring funds. On the benefits side, three factors came into play: Firstly, the rise in interest rates increased the benefits in terms of higher profits associated with avoiding various regulations. Secondly, increased domestic and global competition from other financial institutions increased the benefits of financial innovation to meet and beat this competition. Finally, the benefits and costs of financial innovations are often interdependent.
Securitization is the process
whereby relatively illiquid
financial
assets
are
packaged together and sold
off to individual investors.
Forwards, futures, and option agreements
15.1Lead-in
This chapter will first of all introduce the foundations of financial innovation. Then it will explain why the financial innovation has developed at a fast pace ever since
• interest rate ceiling • mortgage-backed security • option agreements • profit margins • Q regulations • reduce losses • swap agreements • rules and regulations • tax planning the U.S. Treasury 美国财政部 unit of account计量单位
A. 降低风险 B. 金融机构 C. 保险公司 D. 证券公司 E. 货币互换 F. 债券持有人 G. 分散风险 H. 衍生品合约 I. 现金流 J. 金融衍生产品
15.4 Follow-up Tasks
II. Judgments
Directions: Decide whether each of the following statements is true (T) or false (F).
15.4 Follow-up Tasks
I. Matching
Directions: Match the English words and phrases in the left column with the proper Chinese equivalents in the right column.
15.2 Key Points
15.2.3 Financial Derivatives
An interest rate swap is a financial innovation that can be used to reduce the risk of future interest rate changes.
Financial Innovation and Development
CONTENTS
15.1 L e a d - i n 15.2 K e y Po i n t s 15.3 L a n g u a g e N o t e s 15.4 F o l l o w - u p Ta s k s 15.5 E x t e n d e d Ta s k s
( ) 1. currency swap ( ) 2. bondholder ( ) 3. Cash flow ( ) 4. derivative contract ( ) 5. hedge risk ( ) 6. insurance company ( ) 7. financial derivative ( ) 8. financial institution ( ) 9. securities firm ( ) 10. unbundle risks
15.3 Language Notes
II. Phrases
• collateralized mortgage obligations • credit derivative • credit transaction • D regulations • derivative contracts • financial claim • financial innovation • hedge risks • interest-bearing checkable deposit
Swap agreements
Credit derivatives
Securitization
reduce interest rate and exchange rate risks
used by banks and other lenders to unbundle credit risk
15.3 Language Notes
I. Words
barrier [ˈbæriə(r)] 障碍 ceiling [ˈsi:lɪŋ] 上限 deregulate [ˌdi:ˈregjuleɪt] 放松监管 disintermediation [dɪsˌɪntəmi:dɪ'eɪʃən] 非居间化，不干预 payoff ['peɪɔ:f] 收益 fungible ['fʌndʒɪbl] 代替的 hedge [hedʒ] 避免 malleability [ˌmælɪə'bɪlətɪ] 延展性，可塑性 merge [mɜ:dʒ] 兼并 mortgage [ˈmɔ:gɪdʒ] 抵押 proceeds [ˈprəʊsi:dz] 收入，收益 securitization [sɪ'kjʊrətɪzeɪʃn] 证券化 unbundle [ʌn'bʌndl] 解绑，分散 volatile [ˈvɒlətaɪl] 易变的，不稳定的
in the 1990s
Two other laws eliminated barriers to interstate branching and allowed banks, securities firms, and insurance companies to merge.
in a globalized financial environment
15.3 Language Notes
III. Sentences
1. The fact that financial claims are fungible makes the trading of them highly receptive to computer advances. 2. Forwards, futures and option agreements are financial innovations used by financial institutions and others to reduce interest rate and exchange rate risks. 3. Securitization is the process whereby relatively illiquid financial assets are packaged together and sold off to individual investors. In essence, securitization turns these relatively illiquid instruments into quite liquid investments called asset-backed securities. 4. Securitization became popular because it provides a way of protecting against interest rate risk in an environment of increased interest rate volatility. 5.Collateralized mortgages redirect the cash flows (principal and interest) of mortgage-related products to various classes of bondholders, thus creating financial instruments with varying prepayment risks and varying returns.
15.2 Key PFra Baidu bibliotekints
15.2.2 Development of Financial Innovation
In the 1970s
many innovations were centered on evading regulations.
Beginning in 1980
the banking system was deregulated.
1. Many of the recent financial innovations can be attributed to the progress in information and computer technologies. ( ) 2. Since 1980, the control of the banking system is becoming tighter and tighter. ( ) 3. Innovations have made the financial sector more and more competitive in the various markets of the world. 4. Although the derivative security market had existed for centuries, it didn’t undergo a fast development until the mid of the 20th Century. ( ) 5. The derivative security market is the newest type of the financial security markets. ( )
Advances in computer and information technologies have made the increased competition possible and have transformed the financial system into a global system.
the mid-1960s. Finally, it will take a look at the various financial derivatives.
15.2 Key Points
15.2.1 Foundations of Financial Innovation
On the cost side, the malleability of financial claims and the application of emerging computer and telecommunications technology reduced the transactions costs associated with managing, moving and monitoring funds. On the benefits side, three factors came into play: Firstly, the rise in interest rates increased the benefits in terms of higher profits associated with avoiding various regulations. Secondly, increased domestic and global competition from other financial institutions increased the benefits of financial innovation to meet and beat this competition. Finally, the benefits and costs of financial innovations are often interdependent.
Securitization is the process
whereby relatively illiquid
financial
assets
are
packaged together and sold
off to individual investors.
Forwards, futures, and option agreements
15.1Lead-in
This chapter will first of all introduce the foundations of financial innovation. Then it will explain why the financial innovation has developed at a fast pace ever since
• interest rate ceiling • mortgage-backed security • option agreements • profit margins • Q regulations • reduce losses • swap agreements • rules and regulations • tax planning the U.S. Treasury 美国财政部 unit of account计量单位
A. 降低风险 B. 金融机构 C. 保险公司 D. 证券公司 E. 货币互换 F. 债券持有人 G. 分散风险 H. 衍生品合约 I. 现金流 J. 金融衍生产品
15.4 Follow-up Tasks
II. Judgments
Directions: Decide whether each of the following statements is true (T) or false (F).
15.4 Follow-up Tasks
I. Matching
Directions: Match the English words and phrases in the left column with the proper Chinese equivalents in the right column.
15.2 Key Points
15.2.3 Financial Derivatives
An interest rate swap is a financial innovation that can be used to reduce the risk of future interest rate changes.