货币银行学双语复习提纲

Chapter 1Financial marketsMarkets in which funds are transferred from people who have an excess of available funds to people who have a shortage.SecurityIs a claim on the issuer’s future income or assets.BondIs a debt security that promises to make payments periodically for a specified period of time.Interest rateIs the cost of borrowing or the price paid for the rental of funds.Common stock (stock)Represents a share of ownership in a corporation.●To raise funds to finance their activities.● A higher price for a firm’s shares means that it can raise a larger amount of funds, which canbe used to buy production facilities and equipment.The foreign exchange marketFor funds to be transferred from one country to another, they have to be converted from the currency in the country of origin(say, dollars) into the currency of the country they are going to (say, euros). The foreign exchange market is where this conversion takes place.The foreign exchange rateThe price of one country’s currency in terms of another’s.Financial intermediariesInstitutions that borrow funds from people who have saved and in turn make loans to others.BanksAre financial institutions that accept deposits and make loans.●Commercial banks●Saving and loan associations●Mutual saving banks●Credit unionsOther financial institutions●Insurance companies●Finance companies●Pension funds●Mutual funds●Investment banksTypes of financial intermediaries●Depository institutions存款机构Commercial banksSavings and loan associations and mutual savings banksCredit unions信用社●Contractual savings institutions契约型储蓄机构Life insurance companies人寿保险Fire and casualty insurance companies意外伤害险Pension funds and government retirement funds养老和政府退休资金●Investment intermediaries投资中介Finance companiesMutual fundsMoney market mutual fundsInvestment banksA budget deficit is the excess of government expenditures over tax revenues for a particular time period, typically a year, while a budget surplus arises when tax revenues exceed government expenditures.Chapter 2Financial markets perform the essential economic function of channeling funds from households, firms, and governments that have saved surplus funds by spending less than their income to those that have a shortage of funds because they wish to spend more than their income.Direct financeBorrowers borrow funds directly from lenders in financial markets by selling them securities, which are claims on the borrower’s future income or assets.●Advantages➢Borrower can communicate with investor➢Finance cost is lower as no middleman●Disadvantages➢Professional skill & knowledge (surplus units)➢High risk (surplus units)➢Threshold is high (deficit units)SecuritiesAre assets for the person who buys them but liabilities for the individual or firm that sells them.The process of indirect finance using financial intermediaries, called financial intermediation, is the primary route for moving funds from lenders to borrowers.Indirect financeThe process of indirect finance using financial intermediaries, called financial intermediation, is the primary route for moving funds from lenders to borrowers.●Advantages➢Transaction costsThe time and money spent in carrying out financial transactions, are a major problem for people who have excess funds to lend.Financial intermediaries can substantially reduce transaction costs because they have developed expertise in lowering them; and because their large size allows them to take advantage of economies of scale.➢Risk sharingRisk sharingThey create and sell assets with risk characteristics that people are comfortable with, and the intermediaries then use the funds they acquire by selling these assets to purchase other assets that may have far more risk.Low transaction costs allow financial intermediaries to share risk at low cost, enabling them to earn a profit on the spread between the returns they earn on risky assets and the payments they make on the assets they have sold. This process sometimes referred to as asset transformation, because in a sense, risky assets are turned into safer assets for investors.Diversification entails investing in a collection(portfolio) of assets whose returns do not always move together, with the result that overall risk is lower than for individual assets.●Disadvantages➢Asymmetric information: adverse selection and moral hazardAsymmetric informationIn financial markets, one party often does not know enough about the other party to make accurate decisions.Adverse selection is the problem created by asymmetric information before the transaction occurs.Moral hazard is the problem created by asymmetric information after the transaction occurs.Structure of financial markets●Debt and equity markets债务市场和债权市场➢Returns to buyersDebt: The borrower to pay the holder of the instrument fixed dollar amounts at regular intervals (interest and principal payments) until a specified date (the maturity date), when a final payment is made.Equities: Equities often make periodic payments (dividends) to their holders and are considered long-term securities because they have no maturity date.➢Decision makingEquities: Owning stock means that you own a portion of the firm and thus have the right to vote on issues important to the firm and to elect its directors.➢ClaimantEquities: The corporation must pay all its debt holders before it pays its equity holders.➢BenefitEquities: Equity holders benefit directly from any increases in the corporation’s profitability or asset value because equities confer ownership rights on the equity holders.Debt: Debt holders do not share in this benefit, because their dollar payments is fixed.●Primary and secondary markets一级市场和二级市场➢ A primary market is a financial market in which new issues of a security.➢ A secondary market is a financial market in which securities that have been previously issued can be resold.●Exchanges and over-the-counter markets场内交易市场和场外交易市场➢Exchanges, where buyers and sellers of securities meet in one central location to conduct trades.➢OCT market, in which dealers at different locations who have an inventory of securities stand ready to buy and sell securities ”over the counter”to anyone who comes to them and is willing to accept their prices.●Money and capital markets货币市场和资产市场➢The money market is a financial market in which only short-term debt instruments are traded. ➢The capital markets is the market in which longer-term debt and equity instruments are traded.Chapter 3MoneyAs anything that is generally accepted in payment for goods or services or in the repayment of debts.Currency vs. moneyMoney =currency+ deposits.Income is a flow of earnings per unit of time.Functions of money●Medium of exchangeIt is used to pay for goods and services.The use of money as a medium of exchange promotes economic efficiently by minimizing the time spent in exchanging goods and services.The time spent trying to exchange goods or services is called transaction cost. In a barter economy, transaction costs are high because people have to satisfy a “double coincidence of wants”.For a commodity to function effectively as money, it has to meet several criteria:(1)it must be easily standardized, making it simple to ascertain its value;(2)it must be widely accepted;(3)it must be divisible, so that it is easy to “make change”;(4)it must be easy to carry; and (5)it must not deteriorate quickly.●Unit of accountIt is used to measure value in the economy. We measure the value of goods and services in terms of money.Using money as a unit of account reduces transaction costs.●Store of valueIt is a repository of purchasing power over time.LiquidityThe relative ease and speed with which an asset can be converted into a medium of exchange.Money is the most liquid asset of all because it is the medium of exchange; it does not have to be converted into anything else to make purchases.Evolution of the payments system●Commodity money实物货币Money made up of precious metals or another valuable commodity.The problem with a payments system based exclusively on precious metals is that such a form of money is very heavy and is hard to transport one place to another.●Fiat money不兑现货币Paper currency decreed by governments as legal tender but not convertible in to coins or precious metal.●Checks支票Is an instruction from you to your bank to transfer money from your account to someone else’s account when she deposits the check.➢AdvantagesNo currency need be moved.Reduces the transportation costs.Improves economic efficiency.Can be written for any amount up to the balance in the account.➢DisadvantagesTakes time to get checks from one place to another.Takes several business days before a bank will allow you to make use of the fundsAll the paper shuffling required to process checks is costly.●Electronic payment电子支付●E-Money电子货币Measures of the monetary aggregatesM1=currency+traveler’s checks+demand deposits活期存款+other checkable deposits可开具支票的存款M2=M1+small-denomination time deposits小额定期存款+savings deposits and money market deposit accounts+money market mutual fund shares货币市场共同基金Chapter 4Simple interest单利-只在本金的基础上计算利息I=P*r*n/ S=P+ICompounded interest复利-包括利息一起计算利息S=P(I+r)nI=S-P[n=duration; r=interest rate; P=principle]Present valueA dollar paid to you one year from now is less valuable to you than a dollar paid to you today. Future valueFour types of credit market instruments● A simple loan普通贷款The lender provides the borrower with an amount of funds that must be repaid to the lender at the maturity date, along with an additional payment for the interest.● A fixed-payment loan固定回报贷款The lender provides the borrower with an amount of funds, which must be repaid by making the same payment every period, consisting of part of the principle and interest for a set number of years.● A coupon bond债券息票Pays the owner of the bond a fixed interest payment every year until the maturity date, whena specified final amount is repaid.● A discount bond贴现债券Is bought at a price below its face value, and the face value is repaid at the maturity date. Comparison1&4 make payments only at their maturity.2&3 have payments periodically until maturity.Yield to maturityThe interest rate that equates the present value of cash flow payments received from a debt instrument with its value today.从债务工具中获得的现金流的回报的现值与其今天的价值相等的利率● A simple loann i CF PV )1(+= [PV=present value; CF=future cash flow; i=interest rate; n=number of years]● A fixed-payment loanni FP i FP i FP LV )1()1(12++⋅⋅⋅++++= [LV=loan value; FP=fixed yearly payment; n=number of years until maturity]● A coupon bondnn i F i C i C C P )1()1()1(i 12++++⋅⋅⋅++++= [P=price of coupon bond; C=yearly coupon payment; F=face value of the bond; n=years to maturity date]● A discount bondPP F i -= [F=face value of the discount bond; P=current price of the discount bond]现金流终值rr A S n 1)1(-+= 现金流现值 年初：n r A r A r A A P )1()1()1(2++⋅⋅⋅+++++= 年尾：nn r A r A r A r r A P )1()1(1)1(12++⋅⋅⋅++++=+-=-Chapter 9Balance sheetA list of the bank ’s assets and liabilities.Total assets = total liabilities + capitalA bank balance sheet is also a list of its sources of bank funds (liabilities) and uses to which thefunds are put (assets).Liabilities●Checkable deposits支票存款Are bank accounts that allow the owner of the account to write checks to third parties.➢Non-interest-bearing checking accounts (demand deposit)不计息的支票存款（活期存款）➢Interest-bearing NOW (negotiable order of withdrawal) accounts计息可转让的提款通知账户➢Money market deposit accounts (MMDAs)货币市场存款账户MMADs are not subject to reserve requirements and are not included in the M1 definition of money.Checkable deposits and money market deposit accounts are payable on demand.●Nontransaction deposits非交易性存款Are the primary source of bank funds.Owners cannot write checks on nontransaction deposits, but the interest rates paid on these deposits are usually higher than those on checkable deposits.➢Savings accounts储蓄存款Funds can be added or from which funds can be withdrawn at any time, transactions andinterest payments are recorded in a monthly statement or in a passbook held by theowner of the account.➢Time deposits定期存款Have a fixed maturity lengthSmall-denomination time deposits (less than $100,000) are less liquid for the depositorthan passbook savings (saving accounts), earn higher interest rates, and are a morecostly source of funds for the banks.Large-denomination CDs are negotiable; like bonds, they can be resold in a secondarymarket before they mature.●Borrowings借款Banks also obtain funds by borrowing from the Federal Reserve System the Federal Home Loan banks, other banks, and corporations.➢Discount loans贴现贷款Borrowings from the Fed.➢Reserves overnight隔夜准备金Banks borrow funds overnight to have enough deposits at the Federal Reserve to meetthe amount required by the Fed.➢Repurchase agreements回购协议Other sources of borrowed funds are loans made to banks by their parent companies(bank holding companies), loan arrangements with corporations (such as repurchaseagreements), and borrowings of Eurodollars.●Bank capital银行资本Equals the difference between total assets and liabilities.Is a cushion against a drop in the value of its assets.Assets●Reserves准备金Are these deposits plus currency that is physically held by banks.➢Required reserves法定准备金Some reserves are held because of reserve requirements, the regulation that for everydollar of checkable deposits at a bank, a certain fraction must be kept as reserves. Thisfraction is called the required reserve ratio.➢Excess reserves超额准备金They are the most liquid of all bank assets and can be used by a bank to meet itsobligations when funds are withdrawn.●Cash items in process of collection应收现金项目（站在开户人的角度）Suppose that a check written on an account at another bank is deposited in your bank and the funds for this check have not yet been received from the other bank●Deposits at other banks银行同业存款Many small banks hold deposits in larger banks in exchange for a variety of services.●Securities证券A bank’s holdings of securities are an important income-earning asset.➢U.S. government and agency securities联邦政府证券➢State and local government securities州和地方证券➢Other securities其他证券The U.S. government and agency securities are the most liquid because they can be easily traded and converted into cash with low transaction costs. Because of their high liquidity, short-term U.S. government securities are called secondary reserves.State and local government and other securities both less marketable (less liquid) and riskier than U.S. government securities, primarily because of default risk.●Loans贷款Loans are typically less liquid than other assets.流动性较低Have a probability of default than other assets.违约性高Because of the lack of liquidity and higher default risk, the bank earns its highest return on loans.贷款回报率高●Other assets其他资产The physical capital (bank buildings, computers, and other equipment) owned by the banks is included in this category.General principles of bank management银行管理●Liquidity management and the role of reserves流动性管理The acquisition of sufficiently liquid assets to meet the bank’s obligations to depositors.➢To acquire reserves to meet a deposit outflow by borrowing them from other banks in the federal funds market or by borrowing from corporations.➢To sell some of its securities to help cover the deposit outflow.➢Meet a deposit out flow is to acquire reserves by borrowing from the Fed.➢Reducing its loans by the amount of the deposit outflow and then deposit it to the Fed.●Asset management资产管理The bank manager must pursue an acceptably low level of risk by acquiring assets that have a low rate of default and by diversifying asset holdings.Banks try to find borrowers who will pay high interest rates and are unlikely to default on their loans.Banks try to purchase securities with high returns and low risk.In managing their assets, banks must attempt to lower risk by diversifying.The bank must manage the liquidity of its assets so that it can satisfy its reserve requirements without bearing huge costs. (That means that it will hold liquid securities even if they earn a somewhat lower return than other assets.●Liability management负债管理To acquire funds at low cost.●Capital adequacy management (To prevent bank failure 资本充足率管理The manager must decide the amount of capital the bank should maintain and then acquire the needed capital.High capital bank vs. Low capital bank(ROA; ROE; EM; ER; ROE=ROA*EM(Given the return on assets, the lower the bank capital, the higher the return for the owners of the bank.Managing credit risk●Screening and monitoring●Specialization in lending●Monitoring and enforcement of restrictive covenants.●Long-term customer relationships●Loan commitments●Collateral and compensating balances●Credit rationingChapter 13The Fed’s balance sheet央行资产负债表Federal Reserve SystemAssets LiabilitiesGovernment securities Currency in circulationDiscount loans ReservesMonetary baseTreasury’s monetary liabilities(treasury currency in circulation, primary coins.Control of the monetary baseThe monetary base(also called high-powered moneyMB=C+R●Federal reserve open market operations公开市场业务A purchase of bonds by the Fed is called an open market purchase, and a sele of bonds by the Fed is called an open market sale.➢Open market purchase from a bankBanking system Federal reserve system Assets liabilities Assets Liabilities Securities -$100 securities +$100 Reserves +$100 Reserves +$100Because there has been no change of currency in circulation, the monetary base has also risen by $100.➢Open market purchase from the nonbank publicBanking system Federal reserve system Assets liabilities Assets liabilities Reserves +$100 checkable deposits +$100 securities +$100 Reserves +$100Because increase by the amount of the open market purchase, and the monetary base increase by the same amount.Nonbank public Federal reserve systemAssets Liabilities Assets Liabilities Securities -$100 securities +$100 Reserves +$100 Currency +$100The effect of an open market purchase on reserves depends on whether the seller of the bonds keeps the proceeds from the sale in currency or in deposits.The effect of an open market purchase on the monetary base, however, is always the same(the monetary base increases by the amount of the purchase) whether the seller of the bonds keeps the proceeds in deposits or in currency.➢Open market saleNonbank public Federal reserve systemAssets Liabilities Assets Liabilities Securities -$100 securities -$100 Reserves -$100 Currency +$100●Shifts from deposits into currency存款向通货的转换Such a shift will have no effect on the monetary base.●Discount loans贴现贷款The net effect on the monetary liabilities of the Fed, and hence on the monetary base.Multiple deposit creation: A simple model 多倍存款创造Multiple deposit creationWhen the Fed supplies the banking system with $1 of additional reserves, deposits increasse bu amultiple f this amount--a process.Bank AAssets LiabilitiesReserves +$100 Checkable deposits +$100Bank AAssets LiabilitiesReserves +$10 Checkable deposits +$100Loans +$90Bank BAssets LiabilitiesReserves +$90 Checkable deposits +$90Bank BAssets LiabilitiesReserves +$9 Checkable deposits +$90Loans +$81Bank AAssets LiabilitiesReserves +$10 Checkable deposits +$100Securities +$90Whether a bank chooses to use its excess reserves to make loans ot to purchase securities, the effect on deposit expansion is the same.Chapter 17Exchange rateThe price of one currency in terms of another.Transactions conducted in the foreign exchange market determine the rates at which currencies are exchanged, which in turn determine the cost of purchasing foreign goods and financial assets.Spot transactions即期汇率The predominant ones, involve the immediate( two-day)exchange of bank deposits.Forward transactions远期汇率Involve the exchange of bank deposits at some specified future date.AppreciationWhen a currency increases in value.DepreciationWhen it falls in value and it worth fewer U.S. Dollars.Exchange rate are important because they affect the relative price of domestic and foreign goods. When a country’s currency appreciates, the country’s goods abroad become more expensive andforeign goods in that country become cheaper(holding domestic prices constant in the two countries), Conversely, when a country’s currency depreciates, its goods abroad become cheaper and foreign foods in that country become more expensive.Exchange rate in the long run●Law of one priceIf two countries produce an identical good, and transportation costs and trade barriers are very low, the price of the good should be the same throughout the world no matter which country produces it.●Theory of purchasing power parityIt states that exchange rates between any two currencies will adjust to reflect changes in the price levels of the two countries. The theory of PPP is simply an application of the law of one price to national price level rather than to individual prices.Factors that affect exchange rates in the long run长期中影响汇率的因素●Relative price levelsIn the long run, a rise in a country’s price level(relative to the foreign price level) causes its currency to depreciate, and a fall in the country’s relative price level causes its currency to appreciate.●Trade barriersIncreasing trade barriers cause a country’s currency to appreciate in the long run.●Preferences for domestic versus foreign foods●ProductivityExchange rates in the short run●Comparing expected returns on domestic and foreign assets●Interest parity condition●Demand curve for domestic assetsExplaining changes in exchange ratesShift in the demand for domestic assets●Domestic interest rate, i DWhen the domestic interest rate on dollar assets i D rises, the return on dollar assets increases relative to foreign assets, so people will want to hold more dollar assets. The quantity of sollar assets demanded increases.●Foreign interest rate, i FWhen the foreign interest rate i F rises, the return on foreign assets rises relative to dollar assets. People want to hole fewer dollar assets, and the quantity demanded decreases.An increase in the foreign interest rate i shift the demand curve D to the left and causes the domestic currency to depreciate; a fall in the in the in the foreign interest rate i shifts the demand curve D to the right and causes the domestic currency to appreciate.●Changes in the expected future exchange rate, E e t+1A rise in the expected future exchange rate,E e t+1 ,shifts the demand curve to the right and causes an appreciation of the domestic currency, a fall in the expected future exchange rate,E e t+1 , shifts thedemand curve to the left and causes a depreciation of the currency.。