Chapter 5 Money and capital markets
Chapter 5 Money and Capital Markets
5. 1 The Government Bond Market 5. 1. 1 when the government runs a deficit it has to get the funds There are three ways for the government to get funds
5.1 The Government Bond Market 5.1.1 when the government runs a deficit, it has to get the funds. There are three ways for the government to get funds
o printing new dollar bills 8 borrowing: selling government securities to individuals, to banks to foreigners. etc ☆ Increasing tax
v printing new dollar bills v borrowing:selling government securities to individuals, to banks ,to foreigners,etc. v increasing tax
5.1.2 types of securities treasury bills: the shortest-term government securities with original maturities of 3 months, 6 months or one year treasury notes: securities with an original maturity of between one year and ten years treasury bonds: which may be issued with any maturity longer than ten years
5.1.2 types of securities treasury bills: the shortest-term government securities with original maturities of 3 months, 6 months or one year. treasury notes: securities with an original maturity of between one year and ten years. treasury bonds: which may be issued with any maturity longer than ten years
513 repurchase agreements(回购协议 repos The sale of securities with a commitment to buy them back at a specified date and at a specified price
5.1.3 repurchase agreements(回购协议 repos) The sale of securities with a commitment to buy them back at a specified date and at a specified price
o Repurchase agreements market is closely related to the market for borrow ing and lending reverses owned by banks, cal led the federal funds market dern(银行间的日拆贷款): An unsecured loan between banks where the funds that are lent are transferred the same day the loan is made
vRepurchase agreements market is closely related to the market for borrowing and lending reverses owned by banks ,called the federal funds market. vfederal funds (银行间的日拆贷款):An unsecured loan between banks where the funds that are lent are transferred the same day the loan is made
5.2 Bank-related Securities 5.2.1CDs >Banks can raise funds by issuing certificates of deposit, which are called CDs >Large-sized CDS, which can be traded, transferred are negotiable certificates of deposit The differences between negotiable certificates of deposit and common time certificates deposit
5.2 Bank-related Securities： 5.2.1 CDs ØBanks can raise funds by issuing certificates of deposit, which are called CDs. ØLarge-sized CDS ,which can be traded, transferred, are negotiable certificates of deposit. ØThe differences between negotiable certificates of deposit and common time certificates deposit
522 EURODOLLARS(欧洲美元) Eurodo //ars are do/lars-denominated time deposits held abroad in foreign bank or in foreign branches of Us banks
5.2.2 EURODOLLARS（欧洲美元） Eurodollars are dollars-denominated time deposits held abroad in foreign bank or in foreign foreign branche branches of US banks
)a number of large banks in London act as dealers in Eurodollars, they quote rates at which they are willing to borrow and lend >The rate they will lend at is called libor(London interbank offered rate) >The rate they will borrow at is called LIBID(London interbank bid rate)
ØA number of large banks in London act as dealers in Eurodollars, they quote rates at which they are willing to borrow and lend.. ØThe rate they will lend at is called LIBOR(London interbank offered rate). ØThe rate they will borrow at is called LIBID(London interbank bid rate)
The eurodollar market has become so active in recent years that liBor is now the reference rate in many financial contract。 Q
The Eurodollar market has become so active in recent years that LIBOR is now the reference rate in many financial contracts
