3 BF 732 INT. MONEY AND CAPITAL MARKETS.ppt - BACHELOR IN BANKING AND FINANCE SECOND YEAR 2015\/2016 INTERNATIONAL TRADE FINANCE Agenda 3 International

3 BF 732 INT. MONEY AND CAPITAL MARKETS.ppt - BACHELOR IN...

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BACHELOR IN BANKING AND FINANCE SECOND YEAR : 2015/2016 INTERNATIONAL TRADE FINANCE
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Agenda 3 International Money Markets and International Capital Markets 12/05/19 2 Facilitator: MUSSA E!!!
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Sub - Topics International Money Markets International Capital Markets The Exchange Rate Mechanism The World Bank Group European Monetary System 12/05/19 3 Facilitator: MUSSA E!!!
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Introduction The overall financial environment in which global businesses and global investors operate is known as The International Financial Market. The International Financial Market is made up of three sectors; 1. Foreign Exchange Markets 2. International Money Markets 3. International Capital Markets NB: The Forex Market will be discussed separately . 12/05/19 4 Facilitator: MUSSA E!!!
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Part One International Money Markets 12/05/19 5 Facilitator: MUSSA E!!!
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Introduction The International Money Market represents the short and intermediate term borrowing and investment market. Global firms have access to the international money markets either through; Financial intermediaries (primarily large global banks) or through access to Direct financial markets. 12/05/19 6 Facilitator: MUSSA E!!!
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Introduction Intermediary markets include: Eurocurrency Loan Market (i.e., Euro- Lines of Credit) Eurocredits Market (i.e., Syndicated Euro credits) Direct markets include: Short Term and Medium Term Euronotes Market Eurocommercial Paper Market 12/05/19 7 Facilitator: MUSSA E!!!
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The Eurocurrency Market The international money market has as its core the euro-currency deposit market, also called the offshore currency market. A Eurocurrency is a freely convertible currency deposited in a bank outside its country of origin. For example, Eurodollars are U.S. dollar- denominated time deposits in banks located outside of the United States. 12/05/19 8 Facilitator: MUSSA E!!!
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The Eurocurrency Market This deposit market supports the borrowing and lending of “offshore” currencies. Banks accepting euro-currency deposits can be local banks (i.e., domestic to the financial market), or foreign banks operating in the local market (including U.S. banks). These banks are referred to as Eurobanks. Major Eurobanks include Citi, Deutsche, and UBS(Union Bank of Switzerland). 12/05/19 9 Facilitator: MUSSA E!!!
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The Eurocurrency Market Participants in the Eurocurrency market include large global banks and other large financial institutions, large multinational corporations, and governments. The market is confined to time deposits. The market is primarily a Eurodollar. Eurocurrency markets exist all over the world, but the major and largest market is in London. 12/05/19 10 Facilitator: MUSSA E!!!
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The Eurocurrency Market In the London interbank Eurocurrency market there are two major interest rates: London Interbank Bid Rate: The interest rate which a Eurobank will offer on deposit (“deposit rate”); referred to at LIBID.
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