国际金融英文课件：Lecture 2.ppt

1、INTERNATIONAL FINANCIAL MANAGEMENT EUN / RESNICK Second Edition 2 McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-1 Essential Readings P29-49 P53-57 McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-2 International M

2、onetary System lInternational monetary system can be defined as the institutional framework in which international payments are made, movements of capital are accommodated , and exchange rates among currencies are determined. lIt is a complex whole of arrangements, rules, institutions, mechanisms, a

3、nd policies regarding exchange rates, international payments, and the flow of capital. McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-3 Main Contents lEvolution of the International Monetary System lRelated Theories: Trilemma and Optimum Currency Areas. lT

4、he Asian Currency Crisis McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-4 Evolution of the International Monetary System lBimetallism: Before 1875 lClassical Gold Standard: 1875-1914 lInterwar Period: 1915-1944 lBreton Woods System: 1945-1972 lThe Flexible

5、 Exchange Rate Regime: 1973- Present McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-5 Bimetallism: Before 1875 lA “double standard” in the sense that both gold and silver were used as money. lBoth gold and silver were used as international means of payment

6、 and the exchange rates among currencies were determined by either their gold or silver contents. lGrashamlaw phenomenon has only made the less valuable metal to circulate. McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-6 Classical Gold Standard: 1875-1914

7、 lDuring this period in most major countries: nGold alone was assured of unrestricted coinage nThere was two-way convertibility between gold and national currencies at a stable ratio. nGold could be freely exported or imported. lThe exchange rate between two countrys currencies would be determined b

8、y their relative gold contents. McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-7 Classic Gold Standard lFor Example: lIf 1 ounce gold=12Francs l 1 ounce gold=6pounds lThen 1pound=2Francs McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. A

9、ll rights reserved. 2-8 Classical Gold Standard: 1875-1914 lAdvantages of the Gold Standard: lHighly stable exchange rates under the classical gold standard provided an environment that was conducive to international trade and investment. lMisalignment of exchange rates and international imbalances

10、of payment were automatically corrected by the price-specie-flow mechanism. McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-9 Classical Gold Standard: 1875-1914 lThere are shortcomings: nThe supply of newly minted gold is so restricted that the growth of wo

11、rld trade and investment can be hampered for the lack of sufficient monetary reserves. McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-10 Interwar Period: 1915-1944 lExchange rates fluctuated as countries widely used “predatory” depreciations of their curre

12、ncies as a means of gaining advantage in the world export market. lAttempts were made to restore the gold standard, but participants lacked the political will to “follow the rules of the game”. lThe result for international trade and investment was profoundly detrimental. McGraw-Hill/Irwin Copyright

13、 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-11 Bretton Woods System: 1945-1972 lNamed for a 1944 meeting of 44 nations at Bretton Woods, New Hampshire. lThe purpose was to design a postwar international monetary system. lThe goal was exchange rate stability without the gold stand

14、ard. lThe result was the creation of the IMF and the World Bank. McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-12 Bretton Woods System: 1945-1972 lBritish Pound German Mark French Franc l USD l Pegged at $35/oz l Gold McGraw-Hill/Irwin Copyright 2001 by T

15、he McGraw-Hill Companies, Inc. All rights reserved. 2-13 Bretton Woods System: 1945-1972 lUnder the Bretton Woods system, the U.S. dollar was pegged to gold at $35 per ounce and other currencies were pegged to the U.S. dollar. lEach country was responsible for maintaining its exchange rate within 1%

16、 to 2.25% of the adopted par value by buying or selling foreign reserves as necessary. lThe Bretton Woods system was a dollar-based gold exchange standard. McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-14 Bretton Woods System: 1945-1972 lCollapse of the S

17、ystem nTriffin Paradox nThe rapid development of Germany, France and Japan McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-15 Bretton Woods System: 1945-1972 lThe process of the collapse of the system nThe first Dollar crisis:1960 lThe creation of the Swap

18、Agreement ,and the Gold Pool nThe second Dollar crisis:1968 lThe two-tier gold price system , and The creation of SDR nThe third Dollar crisis:1971 lThe creation of the Smithsonnian Agreement McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-16 The Flexible E

19、xchange Rate Regime: 1973-Present. lThe flexible exchange rate regime was ratified after the settlement of the Jamaica Agreement in 1976. nFlexible exchange rate were declared to IMF members, and central banks were allowed to intervene in the exchange market. nGold was officially abandoned as an int

20、ernational reserve. nNon-oil-exporting countries and less developed countries were given great access to IMF funds. McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-17 McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2

21、-18 The Flexible Exchange Rate Regime: 1973-Present. lPlaza Accord : In Sept.1985, the so-called G5 countries reached Plaza Accord. They agreed that it would be desirable for the dollar to depreciate against most major currencies to solve the US trade deficit. lLouvre Accord: To address the problem

22、of exchange rate volatility , the G-7 countries signed the Louvre Accord.This marked the inception of the managed-float system . McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-19 Current Exchange Rate Arrangements lThe Fixed lThe floating nFree floating nM

23、anaged floating lThe Pegged System nCurrency Board nPegged within crawling bands nPegged within horizontal bands n. McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-20 Current Exchange Rate Arrangements lFixed nExchange rates are either held constant or allo

24、wed to fluctuate within very narrow boundaries. Examples are Morocco, Saudi Arabia, and Ukraine. McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-21 Current Exchange Rate Arrangements lThe Floating nFree Float :The exchange rate is market determined, with an

25、y foreign exchange intervention aimed at moderating the rate of change and preventing undue fluctuations in the exchange rate rather than at establishing a level for it. Examples include the US, the UK, Japan, Canada, Australia, Switzerland, Korea, and Mexico. nManaged Float :The monetary authority

26、influences the movements of the exchange rate through active intervention in the foreign exchange market without specifying a preanounced path for the exchange rate. Examples are China, Singapore, Russia, Thailand, India .etc. McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All r

27、ights reserved. 2-22 Current Exchange Rate Arrangements lThe Currency board arrangement: A monetary regime based on an explicit legislative commitment to exchange domestic currency for a specified foreign currency at a fixed exchange rate, combined with restrictions on the issuing authority to ensur

28、e the fulfillment of its legal obligation. Examples are China-Hong Kong SAR fixed to the USD; and Estonia fixed to Euro. McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-23 Fixed versus Flexible Exchange Rate Regimes lArguments in favor of fixed exchange rat

29、e system: nLess foreign exchange risk, helpful to foreign trade and investment. Arguments AGAIST fixed exchange rate system nexposure to currency crisis neasy transmission of inflation nLoss of monetary policy autonomy McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights re

30、served. 2-24 Fixed versus Flexible Exchange Rate Regimes lArguments in favor of flexible exchange rates: nEasier external adjustments. nNational policy autonomy. nSpeculation avoidance lArguments against flexible exchange rates: nExchange rate uncertainty may hamper international trade. nNo safeguar

31、ds to prevent crises. McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-25 Fixed versus Flexible Exchange Rate Regimes lThe disadvantage of the pegging system: nThe countrys economy is highly influenced by the pegged country. McGraw-Hill/Irwin Copyright 2001

32、by The McGraw-Hill Companies, Inc. All rights reserved. 2-26 Question lQustion 1 lThe Hong Kong Dollars value is pegged to the U.S. Dollar. Explain how the following patterns would be affected by appreciation in the Japanese Yen against U.S. dollar: l(a) Hong Kong exports to Japan l(b) Hong Kong exp

33、orts to the United States. McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-27 What a monetary system should a country adopt？ lThe Trilemma by Mundell: nWhen money can move freely across borders, policy markers must choose between exchange-rate stability and

34、 an independent monetary policy. They cant have both. McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-28 Current Exchange Rate Arrangements l Liquidity l Confidence Adjustment McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights re

35、served. 2-29 The Theory of the Optimum Currency Areas lThe theory founded by Professor Robert Mundell holds that the relevant criterion for identifying and designing a common currency is the degree of factor( capital and labor)mobility within the zone; a high degree of factor mobility would provide

36、an adjustment mechanism, providing an alternative to country-specific monetary adjustment. McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-30 30 The Map of Europe 30 McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-

37、31 The Process of European Monetary Union lThe Werner Report: 1969 nThe Snake floating System: nThe establishment of the European Unit of Account lThe European Monetary System set up in 1979 nEuropean currency unit nEuropean monetary fund lThe Maastricht Treaty signed in 1991 nIntroduce a common cur

38、rency nThe European central bank, to be located in Frankfurt, Germany will conduct monetary policy in the European Union. McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-32 The Benefits of European Monetary Union lSaving Transaction costs lElimination of fo

39、rex uncertainty lPromoting corporate restructuring via merger and acquisitions. lCreating conditions conducive to continental capital markets lPolitical cooperation and peace in Europe. McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-33 The Cost Of Internat

40、ional Monetary Umion lLoss of national monetary policy independence. McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-34 The Asian Currency Crisis lThe three currency crisis in the 1990th nThe ERM currency crisis in 1992 nThe Mexico Peso crisis in 1994 nThe

41、Asian currency crisis in 1997 McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-35 The Asian Currency Crisis lThe Asian currency crisis turned out to be far more serious than the Mexican peso crisis in terms of the extent of the contagion and the severity of

42、the resultant economic and social costs. lMany firms with foreign currency bonds were forced into bankruptcy. lThe region experienced a deep, widespread recession. McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-36 McGraw-Hill/Irwin Copyright 2001 by The Mc

43、Graw-Hill Companies, Inc. All rights reserved. 2-37 McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 2-38 Currency Crisis Explanations lIn theory, a currencys value mirrors the fundamental strength of its underlying economy, relative to other economies. In the

44、 long run. lIn the short run, currency traders expectations play a much more important role. lIn todays environment, traders and lenders, using the most modern communications, act by fight-or-flight instincts. For example, if they expect others are about to sell Brazilian reals for U.S. dollars, they want to “get to the exits first”. lThus, fears of depreciation become self-fulfilling prophecies.