Introduction to Financial Markets for International Operations
Introduction to Financial Markets for International Operations
This hypothetical case is meant to demonstrate the interdependence of capital markets and industrial growth worldwide. It may seem farfetched to assume that events in Hong Kong could influence a steelworker's job in Ohio, but stranger things have happened. Economic problems in Brazil and Mexico certainly have had a strong influence on the activities of the large multinational banks.
The small firm involved only tangentially in international business may be concerned only about the functions of the foreign-exchange section of its commercial bank. The larger MNE investing and operating abroad cares about access to capital in local markets as well as the large global capital markets. These capital markets and the institutions set up to make them run are primarily in the private sector. However, banks in some countries are owned by the government, and some lending institutions, such as the World Bank, are either government-owned or receive most of their funding from governments.
This chapter examines the financial markets and institutions that allow firms to grow globally and service customers around the world. Initially, the focus will be primarily on the markets themselves, especially the Eurocurrency, Eurobond, and equity markets. In the section on banking, we discuss the institutions and the services. Then we concentrate on the financial institutions distinct from banks that make the securities markets work. We close with a discussion on development banks and their contribution to corporate finance.
This hypothetical case is meant to demonstrate the interdependence of capital markets and industrial growth worldwide. It may seem farfetched to assume that events in Hong Kong could influence a steelworker's job in Ohio, but stranger things have happened. Economic problems in Brazil and Mexico certainly have had a strong influence on the activities of the large multinational banks.
The small firm involved only tangentially in international business may be concerned only about the functions of the foreign-exchange section of its commercial bank. The larger MNE investing and operating abroad cares about access to capital in local markets as well as the large global capital markets. These capital markets and the institutions set up to make them run are primarily in the private sector. However, banks in some countries are owned by the government, and some lending institutions, such as the World Bank, are either government-owned or receive most of their funding from governments.
This chapter examines the financial markets and institutions that allow firms to grow globally and service customers around the world. Initially, the focus will be primarily on the markets themselves, especially the Eurocurrency, Eurobond, and equity markets. In the section on banking, we discuss the institutions and the services. Then we concentrate on the financial institutions distinct from banks that make the securities markets work. We close with a discussion on development banks and their contribution to corporate finance.
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