CAVENDISH UNIVERSITY UGANDA Name : Awil Mohamoud Mohamed Doing: Banking and Finance

NATIONAL CAPITAL MARKETS AS INTERNATIONAL CENTERS

The principal Functions of Financial Centers A: between savers and borrowers 1. To transfer purchasing power 2. To allocate funds

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B:International Financial Market 1.Development of most important: a. London b. New York c. Tokyo

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C. Foreign Access to Domestic Markets 1. The Foreign Bond Market a. Extension of domestic market b. Issues floated by foreign cost,or government. c. Examples: yankee bonds, samurai ,bonds.

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D:Three Major Types of Foreign Bonds. 1.) Fixed rate 2.) Floating rate 3.) Equity related

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2.The Foreign Bank Market a. Extension of domestic markets b. Important funding source: Eg. China banks used for U.S. in the firms

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3.The Foreign Equity Market

A.Cross listing internationally can

1.) diversify risk

2.) increase potential demand

3.) build base of global owners.

DEVELOPMENT BANKS
DEVELOPMENT BANKS

A. General Purpose
founded by governments to help

finance very large infrastructure projects.

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B. Types of Development Banks 1.World Bank Group includes a. International Bank for Reconstruction and Development b. International Development Association c. International Finance Corporation.

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B. Types of Development Banks (cont) 2. Regional Development Banks a) finance industry, agricultural, and b) infrastructure projects 3. National Development Banks a) concentrate on a particular b) industry or region.

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1. Gains from trade of goods and services for assets are described by the theory of intertemporal trade. 2. Gains from trade of assets for assets are described by the theory of portfolio diversification. 3. Policy makers can only choose two of the following: a fixed exchange rate, a monetary policy for domestic goals, free international flows of financial capital. 4. Even economic variables do not predict exchange rate changes well in the short run.

PROJECT FINANCE
PROJECT FINANCE frequently used mechanism to finance large-scale, long-term capital investments.

Key Attributes of Project Financing 1. Focus on economically separable projects 2. Lenders have recourse only to assets and cash flows of the project 3. Underlying assets are large and illiquid 4. Projects have a finite life.

REFERENCE

http://www.infoplease.com/ce6/bus/A0825353. html. Alan C. Shapiro & Atulya Sarin, Foundations of multinational Financial Management, edit 2009; The International monetary System. Gregory Gromov (2011). Silicon Valley History. http://www.netvalley.com/svhistory.html.