Beruflich Dokumente
Kultur Dokumente
1
Syllabus
2
Recommended reading
3
Grading and assessment
• exam (40%)
– one-hour, short multiple choice or open-ended questions
– to be held in class on November 18, 2017
4
This lecture
5. Investment funds
6
1. Financial markets and institutions
7
Source: Mishkin Eakins 2015
1. Financial markets and institutions
14
Source: http://markets.ft.com/investmentBanking/tablesAndTrends.asp
A. Underwriting
16
Source: Mishkin Eakins 2015
B. Dealmaking
17
B. Dealmaking
18
Source: http://markets.ft.com/investmentBanking/tablesAndTrends.asp
1.1 Financial markets – brokers and dealers
21
B. Risk sharing
• asset transformation
– create and sell assets with lesser risk to investors
– buy assets with greater risk from borrowers
23
C. Asymmetric information
24
1.2 Financial intermediaries
Investment intermediaries
• Finance companies
– funds from commercial paper (short-term debt), bonds, stocks
– make consumer loans for durable goods, small business loans
• Mutual funds
– funds from selling shares to individual investors (often held in
retirement accounts)
– invest in large, diversified portfolios of financial securities
• Money market mutual funds
– funds from checkable deposit-like shares to individual investors
– invest in liquid and safe short-term money market instruments
28
1.3 Financial regulation
29
1.3 Financial regulation
A. Entry requirements
• must hold government license
• granted only with strong credentials and large initial funds
D. Corporate governance
• requirements on corporate form and location
– e.g. banks must be incorporated in local jurisdiction
• requirements on organizational structure
– must have certain offices and officers
– officers may need to be approved persons
• constitution or articles of association that is approved, or
33
contains or does not contain particular clauses
1.3 Financial regulation
E. Deposit insurance
• depositors insured for loss if intermediary fails
• Federal Deposit Insurance Corporation (FDIC) insures deposits
of up $250k at a commercial bank or mutual savings bank
• National Credit Union Share Insurance Fund (NCUSIF)
34
1.3 Financial regulation – U.S.
40
Source: FintechGroup, http://fintechzone.hu/magyar-fintech-showcase-75