Financial Markets, Banking, and Monetary Policy.
Thomas D. Simpson
Bok Engelsk 2014 · Electronic books.
| Omfang | 1 online resource (387 pages)
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| Utgave | 1st ed.
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| Opplysninger | Intro -- Financial Markets, Banking, and Monetary Policy -- Contents -- Preface -- CHAPTER 1 Introduction -- What You Will Learn in This Chapter -- Overview -- Where We Are Going in This Book -- Contributions Made by the Financial System -- Transfers of Resources from Surplus to Deficit Units -- Other Contributions -- Recurring Themes in the Chapters Ahead -- Resources -- CHAPTER 2 Overview of the Financial System -- What You Will Learn in This Chapter -- Introduction -- Features of an Effective Financial System -- Direct Methods of Finance -- Investment Banks -- Debt versus Equity -- Money versus Capital Markets -- Asymmetric Information -- Adverse Selection -- Moral Hazard -- Indirect Methods of Finance -- Primary versus Secondary Markets -- Primary-Market Transactions -- Secondary-Market Transactions -- Trading Platforms -- Brokers -- CHAPTER 3 The Special Role of Commercial Banks -- What You Will Learn in This Chapter -- Background -- Commercial Bank Balance Sheet -- Assets -- Liabilities -- Net Worth (Capital) -- Payment System and Money -- Commercial Banks and the Payment System -- Payment System Infrastructure -- Credit and Stored Value Cards -- Payments Media in the Money Stock -- Velocity (Turnover of Money) -- Liquidity Provision -- Dealing with Asymmetric Information -- Maturity Transformation -- The Safety Net and Regulatory Policy -- CHAPTER 4 The Pricing of Financial Assets -- What You Will Learn in This Chapter -- Background -- Present Value -- Value of a Single Future Payment -- Value of a Coupon Security -- Other Applications -- Solving for Yield to Maturity -- Solving for Fixed Payments -- The Special Case of a Consol -- Maturity and Price Sensitivity -- Holding Periods versus Maturities -- Return versus Yield -- Duration -- Nominal versus Real Yields -- Appendix A: Variations of the Valuation Relationship.. - Actual and Potential Output in Practice -- Addressing Inflation -- Addressing a Shortfall in Output -- Okun's Law -- CHAPTER 14 Monetary Policy: Challenges Faced by Policymakers -- What You Will Learn in This Chapter -- Background -- Other Forces Affecting Output and Inflation -- Lags and Other Complications -- Need to Be Forward Looking -- Importance of the Expected Path of Short-Term Rates -- Forward Guidance -- Policy Rules -- Money Stock Rule -- Taylor Rule -- Expectations and Central Bank Credibility -- Inflation Targeting -- The Zero-Bound Constraint and the Slow Recovery from the Great Recession -- CHAPTER 15 Financial Crises -- What You Will Learn in This Chapter -- Background -- Classic Banking Panics -- The Nightmare of the Great Depression -- Gold Standard Restraints -- The Stock Market Crash -- Bank Runs -- Massive Damage -- Broader Financial Crises -- Big Drop in Asset Values -- Runs on Suspected Institutions -- Fire Sales -- The Financial Crisis -- Background Factors -- Proliferation of Nonstandard Mortgages -- Growing Exposures of Key Financial Institutions -- The Unraveling -- Shadow Banking Stress -- Major Credit Crunch -- Policy Responses -- Dodd-Frank -- Common Threads -- CHAPTER 16 The Foreign Exchange Market and Exchange Rate Regimes -- What You Will Learn in This Chapter -- Background -- Features of the Market -- The Relation between Spot and Forward Exchange Rates -- Long-Run Exchange Rate Relationships -- The Real Exchange Rate -- Exchange Rate Determination in the Shorter Run -- Demand Schedule -- Supply Schedule -- Equilibrium -- Floating Exchange Rate Regime -- Fixed Exchange Rate Regime -- An Undervalued Exchange Rate -- The Dynamics of an Undervalued Currency -- An Overvalued Currency -- Variations on Fixed Exchange Rate Regimes -- CHAPTER 17 Depository Institutions -- What You Will Learn in This Chapter -- Background.. - Appendix B: Solutions Using a Financial Calculator -- Future Value -- Future Value-A Higher Interest Rate -- Present Value of Single Cash Flow -- Lottery Choice -- Current Price of a Coupon Security -- Price of an Aasset Providing Uneven Cash Flows -- Yield to Maturity -- CHAPTER 5 Factors Affecting Yields -- What You Will Learn in This Chapter -- Background -- The Term Structure of Interest Rates -- The Expectations Hypothesis -- The Term Premium Hypothesis -- Market Segmentation Hypothesis -- Implicit Forward Rates -- The Role of the Term Structure -- Credit Risk -- Credit Rating Agencies -- Investment-Grade versus Below-Investment-Grade Debt -- Cyclical Behavior of Credit Risk and Spreads -- Credit Default Swaps (CDSs) -- Changing Investor Tolerance for Risk -- Liquidity -- Taxation -- Embedded Options -- Flights to Safety -- CHAPTER 6 Principles of Portfolio Selection and Efficient Markets -- What You Will Learn in This Chapter -- Overview -- Uncertainty, Expected Return, and Risk -- Selecting a Portfolio -- Expected Return -- Risk -- Interpreting the Expression for Risk -- An Illustration -- These Principles in Practice -- Efficient Portfolios and Risk-Return Trade-Offs -- Efficient Markets Hypothesis -- Implications for a Random Walk -- Other Implications -- Asset Bubbles -- Evidence -- CHAPTER 7 The Money Market -- What You Will Learn in This Chapter -- Background and Basic Features of the Money Market -- Pricing -- Treasury Bills -- Auction Procedures -- The Role of Primary Dealers -- Purpose for Issuing Bills -- Commercial Paper -- Credit Quality -- Maturities -- Asset-Backed Commercial Paper (ABCP) -- Retreat of the ABCP Market -- Commercial Paper Placement -- The Role of Commercial Banks in the Money Market -- Letters of Credit and Bankers' Acceptances -- Monetary Policy Effects on the Money Market -- CHAPTER 8 The Bond Market.. - Organization of Commercial Banks and Other Depository Institutions.. - The Mortgage Market and Monetary Policy -- CHAPTER 11 The Equity Market -- What You Will Learn in This Chapter -- Background -- Equities as a Source of Corporate Finance -- Preferred versus Common Shares -- Types of Preferred -- Primary and Secondary Markets -- Valuation of Individual Shares -- Basic Model -- Dividend Growth -- Price-Earnings -- Some Implications -- Extending These Principles to the Stock Market -- Monetary Policy and the Stock Market -- Indexes of Stock Prices -- CHAPTER 12 Central Banking and the Federal Reserve -- What You Will Learn in This Chapter -- Background -- Origins of Central Banks -- Constitutional Foundations -- The Century and a Quarter without a Central Bank -- Creation of the Federal Reserve -- Early Years of the Federal Reserve -- Reforms of the 1930s -- Fed Independence -- Central Bank Accountability and Transparency -- Central Bank Responsibilities -- Monetary Operations -- The Demand for Reserves -- The Supply of Reserves -- Market Equilibrium -- Setting the Federal Funds Rate through Open Market Operations -- Permanent versus Temporary Transactions -- Payment of Interest on Excess Reserves -- The Effect of the Financial Crisis on the Reserves Market -- Interaction of Policy Instruments in the Reserves Market -- CHAPTER 13 Monetary Policy: The Basics -- What You Will Learn in This Chapter -- Background -- Effects of Monetary Policy on Output and Prices -- The Goal of Price Stability -- The Dual Mandate in the United States -- The Operational Counterparts to Maximum Employment and Price Stability -- Maximum Employment -- Price Stability -- Aggregate Demand and Aggregate Supply -- Aggregate Supply -- Aggregate Demand -- Monetary Policy and Aggregate Demand -- The Model -- Steady Inflation -- Rising Inflation -- Falling Inflation -- The Important Role of Inflation Expectations.. - What You Will Learn in This Chapter -- Background -- Treasury Notes and Bonds -- Maturities -- Features of TIPS -- Placement -- When-Issued Trading -- STRIPS -- Secondary-Market Trading -- Reopening -- Purposes for Issuing Coupon Securities -- Credit Quality -- Corporate Bonds -- Placements -- Tension between Bond and Shareholders -- Indentures and the Role of Covenants -- Credit Default Swaps (CDSs) -- Below-Investment-Grade Market -- Private Placements -- Secondary-Market Trading -- Munis -- Tax Considerations -- Credit Risk and Liquidity Differences -- General Obligation versus Revenue Bonds -- Placement -- Indentures -- Ratings -- Government-Sponsored Enterprises (GSEs) -- Fannie Mae and Freddie Mac -- Federal Home Loan Banks -- Features of GSE Bonds -- The Impact of Monetary Policy on the Bond Market -- CHAPTER 9 Securitization -- What You Will Learn in This Chapter -- Background -- Obstacles to Overcome -- Asymmetric Information and Adverse Selection -- Corrective Measures -- Regulatory Capital on Ordinary Loans -- Beginnings of Securitization-MBSs -- Ginnie Mae -- Illustration of the Process -- Fannie Mae and Freddie Mac -- Secondary-Market Trading -- Other Mortgage Pools -- Other Securitized Loans-Consumer ABSs -- Auto ABSs -- Credit Card ABSs -- Other Consumer ABSs -- Common Features -- The Effects of the Financial Crisis -- ABSs Involving Business Credit-CDOs and Structured Securities -- Standard Types of Pools-CLOs, CBOs, and CMBSs -- Structured Securities -- CMOs -- Senior-Subordinated Securities -- Effects of the Financial Crisis -- Securitization and the Integration of Credit Markets -- Monetary Policy and Securitization -- CHAPTER 10 The Mortgage Market -- What You Will Learn in This Chapter -- Background -- Home Mortgages -- Homeowner Choices -- Standard Features of Home Mortgages -- Commercial Mortgages.. - Electronic reproduction. Ann Arbor, Michigan : ProQuest Ebook Central, 2021. Available via World Wide Web. Access may be limited to ProQuest Ebook Central affiliated libraries.
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| ISBN | 9781118872055
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