Global Financial Markets, 1/Ed.

This book is about the financial markets, domestic and international, that are used by multinational corporations, government agencies, and banks in the conduct of their business. While it is not about financial management per se, it explains much about the markets in which corporate international financial managers have to deal. The global financial markets include the market for foreign exchange, the Eurocurrency and related money markets, the international capital markets, notably the Eurobond and global equity markets, the commodity market and last but not least, the markets for forward contracts, options, swaps and other derivatives. The book seeks to explain how these markets work both in the context of basic principles of finance and by means of examples and applications. The aim of the book is to construct a story employing the most current state of the art in the markets themselves with a solid foundation of theory. The markets and institutions of international finance have, in recent years, undergone significant changes. To great extent the institutions that dominated global finance in earlier decades–commercial banks and supranational organizations like the International Monetary Fund–have been displaced by disinter- mediated, private finance. There has been an enormous shift of expertise and market power away from banks and towards corporations. The latter increasingly issue commercial paper, bonds and medium term notes, and manage their financial risks internally. The International Monetary Fund, originally designed to resurrect the post-World War II international monetary system, has become a lender to less developed countries in financial distress and no longer performs in the main arena of the international financial circus. National capital markets have gained importance, to some extent at the expense of external markets like the Eurobond market, as barriers are eroded and domestic institutions face the harsh wind of international competition. All these changes make the field one of continual excitement, a case study that never ends. Global Financial Markets is written in a style that reflects the author's view that learning at its best is an active process, not passive absorption. Frequent examples, case studies and illustrations give the reader the opportunity to see the markets through the eyes of the practicing banker or corporate financial officer.