TAILIEUCHUNG - Lecture International finance: An analytical approach (2/e) – Chapter 8: The Eurocurrency market and international banking

The goals of this chapter are: To define the Eurocurrency market, to identify Eurocurrencies and Eurocurrency banking centres, to identify reasons for the growth of the Eurocurrency market, to identify the main features of Eurobanking,. | Chapter 8 The Eurocurrency Market and International Banking Objectives To define the Eurocurrency market. To identify Eurocurrencies and Eurocurrency banking centres. To identify reasons for the growth of the Eurocurrency market. Objectives (cont.) To identify the main features of Eurobanking. To illustrate the determination of the bid-offer spread and the risk premium in Eurocurrency deposit rates. To describe international banking. The Eurocurrency Market The market is comprised of banks that accept short-term deposits and make short-term loans in currencies other than that of the country in which they are located. Eurocurrencies US dollar Euro Japanese yen British pound Swiss franc Prerequisites for Eurocurrency Centres Political stability Favourable environment for international finance Good telecommunications system Favourable time zone High quality of life Eurocurrency Centres European centres: London, Luxembourg, Paris, Zurich and Frankfurt Centres outside developed countries: the Bahamas, Bahrain and Hong Kong North America and Japan: International Banking Facilities (IBFs) and the Japan Offshore Market (JOM) Evolution and Growth The market started in the 1950s. In 1957, the Bank of England introduced tight controls. In 1958, European currencies were made convertible. Evolution and Growth (cont.) The rise of oil prices in the 1970s Efficiency What Explains Efficiency? Eurobanks are not subject to regulations (. Regulation Q, interest equalisation tax) No reserve requirements Economies of scale Features of Eurobanking International banking encompasses Eurobanking. Liabilities are time or call deposits. Eurobanks cannot create deposits by writing claims against themselves. Features of Eurobanking (cont.) Eurobanks accept deposits and make loans in a variety of currencies. A Eurobank is often a branch of an international bank. There are no formal restrictions on entry. Features of Eurobanking (cont.) Transactions are large. The geographical spread is very .

• Tài chính doanh nghiệp
• International Finance
• Lecture International finance
• Tài chính quốc tế
• Bài giảng Tài chính quốc tế
• Eurocurrency market
• International banking
• International monetary system
• Exchange rate arrangements
• Internal financing
• International short term financing
• International long term financing
• Foreign bonds
• Foreign direct investment
• International capital budgeting
• International bank loans
• Financial analysis
• Financial management
• Lecture Introduction to finance
• Financial markets
• International trade
• International business firms
• Financial manager
• Bond investment
• Equity investment
• International arbitrage
• Multipoint arbitrage
• Basel accords