【正文】 ost credit. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 37 ? Learning Objectives ? ? To see the trend toward the internationalization of the money market, and examine how bankers’ acceptances and Eurodeposits are employed in aiding both domestic and international trade. ? To understand how the transfers of money from one spending unit to another across international boundaries can impact a nation’s economy. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 38 Commercial Paper ? Commercial paper consists of shortterm, unsecured promissory notes issued by wellknown and financially strong panies. ? Commercial paper is traded mainly in the primary market. Opportunities for resale in the secondary market are more limited. ? Commercial paper is rated prime, desirable, or satisfactory, depending on the credit standing of the issuing pany. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 39 Types of Commercial Paper ? There are two major types of mercial paper. ? Direct paper is issued mainly by large finance panies and bank holding panies directly to the investor. ? Dealer paper, or industrial paper, is issued by security dealers on behalf of their corporate customers (mainly nonfinancial panies and smaller financial panies). ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 40 Structure of the Commercial Paper Market Investors in mercial paper Money market funds Banks Insurance panies Pension funds Industrial panies Other investors Demand Side Supply Side Issuers of mercial paper Finance panies Bank holding panies Nonfinancial firms Direct or finance paper Paper dealer houses Dealer or industrial paper ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 41 Maturities amp。 credit availability Market interest rates Level amp。 availability of credit Size amp。 capital goods amp。 spending by the public on domestic amp。vis the rest of the world ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 9 The Goals of Central Banking ? Through its influence over interest rates and the growth of the money supply, the central bank is able to influence the economy’s progress toward each of the goals. ? However, the goals often conflict and tradeoffs have to be accepted. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 10 The Channels Through Which Central Banks Work Policy tools of the central bank Volume amp。Money and Capital Markets 12 C h a p t e r Eighth Edition Financial Institutions and Instruments in a Global Marketplace Peter S. Rose McGraw Hill / Irwin Slides by YeeTien (Ted) Fu Money Market Instruments: Commercial Paper, Federal Agency Securities, Bankers’ Acceptances, and Eurocurrency Deposits ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 2 Money and Capital Markets 13 C h a p t e r Eighth Edition Financial Institutions and Instruments in a Global Marketplace Peter S. Rose Slide by YeeTien (Ted) FuThe Roles and Services of The Federal Reserve amp。 Other Central Banks Around The World ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 3 ? Learning Objectives ? ? To explore the many roles and functions of the central banks around the world. ? To see how and why the Federal Reserve System came to be established as the . central bank. ? To examine how the Federal Reserve System is anized to carry out the many tasks it must perform. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 4 ? Learning Objectives ? ? To discover how important central bank independence from the dictates of governments is in designing and carrying out an effective central banking (moary) policy. ? To understand the concept of legal reserves and how the Federal Reserve System influences the level and growth of legal reserves. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 5 Introduction ? A central bank is a government agency that monitors the operation of its financial system and controls the growth of its money supply. ?Central banks are “bankers’ banks.” They municate with mercial banks and securities dealers in carrying out their essential public policy functions. ? The . central bank is the Federal Reserve System. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 6 The Roles of Central Banks ?Control of the money supply, which is closely linked to economic activity and price inflation ?Stabilizing the money and capital markets, by fostering their development and ensuring a stable flow of funds through them ?Lender of last resort for financial institutions squeezed by severe liquidity pressures ?Supervisor of the banking system ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 7 The Roles of Central Banks ?Maintaining and improving the payments mechanism a smoothly functioning and efficient payments mechanism is vital for business and merce ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 8 The Goals of Central Banking ? Central banking in the . and in most other nations is directed toward four major goals: ?Full employment of resources ?Reasonable stability in the general price level of all goods and services ?Sustained economic growth ?A stable balanceofpayments position for the nation vis224。 growth of borrowing amp。 foreign con