Capital Markets and Institutions: A Global Perspective

Author: Allen Wang Wen et al. [USA]
Publisher:
Publish Date: 2003-05-01
Features: The purpose of this book is to make finance less difficult to understand. The story of finance is about how people make various decisions based on their personal interests, somewhat like grasshoppers deciding to play while ants decide to work all day. In the fable, grasshoppers and ants have different attitudes toward risk and the timing of cash flows. These two concepts—risk and the timing of cash flows—are the driving forces behind all financial innovations by financial intermediaries. In this book, we will discuss how financial intermediaries utilize financial markets to provide services such as risk transfer and intertemporal arrangements of cash flows for their clients. The book aims to connect financial markets and financial intermediaries. We believe that without understanding financial intermediaries, one cannot fully understand financial markets, as institutions shape the market. On one hand, financial intermediaries provide standardized financial instruments for transactions in global financial markets. On the other hand, they also offer various personalized services for businesses, consumers, and institutional clients in risk transfer and cash management. This is an encyclopedic introductory textbook on finance, divided into two parts. Part I (Chapters 1–9) focuses on various financial intermediaries, while Part II (Chapters 10–21) focuses on analyzing various financial markets. However, throughout the book, the two are always interrelated in the discussion. Professor Linda Allen, the author of this book, consistently emphasizes that modern financial decisions are reflected in two core concepts—risk management and the intertemporal arrangement of cash flows—these are the fundamental functions of the financial system. To achieve these functions, on one hand, financial intermediaries continuously provide and create financial instruments and technologies; on the other hand, these instruments and technologies are traded and widely promoted through financial markets. This book can serve as both a foundational textbook for finance and a practical guide for MBA programs. It also holds significant reference value for readers who wish to delve deeper into the subject.