Chapter 3
International Financial Markets
Lecture Outline
Foreign Exchange Market
History of Foreign Exchange
Foreign Exchange Transactions
Foreign Exchange Quotations
Interpreting Foreign Exchange Quotations
Currency Derivatives
International Money Market
European and Asian Markets
Money Market Interest Rates Among Currencies
Risk Among Money Market Securities
International Credit Market
Syndicated Loans in the Credit Market
Bank Regulations in the Credit Market
Impact of the Credit Crisis
International Bond Market
Eurobond Market
Development of Other Bond Markets
Risk of International Bonds
Impact of the Greece Crisis on Bonds
International Stock Markets
Issuance of Stock in Foreign Markets
Issuance of Foreign Stock in the U.S.
Comparing the Size Among Stock Markets
How Governance Varies Among Stock Markets
Integration of International Stock Markets and Credit Markets
How Financial Markets Serve MNCs
Chapter Theme
This chapter identifies and discusses the various international financial markets used by MNCs. These
markets facilitate day-to-day operations of MNCs, including foreign exchange transactions, investing in
foreign markets, and borrowing in foreign markets.
Topics to Stimulate Class Discussion
1. Why do international financial markets exist?
2. How do banks serve international financial markets?
3. Which international financial markets are most important to a firm that consistently needs short-term
funds? Which international markets enable MNCs to obtain long-term funding?