Financiamiento internacional

Introduction to the Study of International Financial Markets Roberto J. Santillán-Salgado, Ph.D. ESAN, December 2010.

The Changing Financial Landscape

An Expanding Menu of Financial Choices   Greater Volatility of Financial Markets   Increased Competition Within and Among Financial Markets   Financial Crises and Contagion Effects
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Overview
  Challenges in the Study ofInternational Financial Markets and the Practice of International Financial Management:
The Importance of Foreign Exchange Markets   The Study of International Financial Markets   The Practice of International Financial Management
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Changes in Financial Markets
  Some have been gradual.
Decreasing role of the United States and the depreciation of the U.S. dollar.   The growing importance ofnew financial products, new financial institutions, and emerging markets around the world.
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  Other changes were more abrupt.
The collapse of the pegged exchange rate system in the early 1970s (Bretton Woods), the crises of the 1990s (Mexico, Thailand, Korea, etc.).   The financial catastrophe of 2007-2009.
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The Changing Financial Landscape
  Expanding financialalternatives.
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Financial engineering: Corporate issuers and private investors have at their disposal innumerable futures and option contracts to acquire or lay off risks associated with economy-wide shocks or with firmspecific events. Large price swings over the past three decades, which has led to greater emphasis on risk management.

  Financial markets experience greater volatility.
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TheChanging Financial Landscape
  There is increased competition within and among financial markets.
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This transformation places new demands on regulators: Should national financial policies and regulations be harmonized or left free to adjust to each country s individual environment and interests?

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The Changing Financial Landscape
  When there are financial crises, contagion effectsripple down different financial markets.
The increase in size and mobility of capital internationally, results in market reactions, that are faster, more severe, and broader in scope.   This raises important investor and macroeconomic policies.
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Major Themes
  Policy implications for two broad groups:
Private individuals and managers of private enterprises, for whom their ownself-interest or value maximization are the decision criteria.   Public policymakers, for whom broader measures of welfare maximization are typically invoked for decision making.
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International Financial Markets current environment
  The collapse of the pegged exchange rate system in 1973 set the stage for a change in how businesses view the foreign exchange rate.
Almost every country is nowmore reliant on foreign trade relations with the rest of the world.   Investors and borrowers have gradually diversified their portfolios internationally too.   International Capital flows have the capacity to impulse economic development, but also represent the source of potential risks for investors and firms.
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International Financial Markets current environment
  The practice ofinternational financial management has become more demanding.
There is a wider array of products and markets now.   There are also new techniques for forecasting, measuring performance, and managing risks.   Greater price volatility in the financial markets raises the opportunity cost of a wrong decision or an unexpected exchange rate change.
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A Road Map
 The
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InternationalFinancial System Exchange Markets

introduction, overview, and recent developments market structure, international parity conditions, exchange rate determination, market efficiency, exchange rate forecasting

 Foreign
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 Offshore
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Financial Markets

the eurocurrency and eurobond markets

A Road Map
 Derivatives:
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Futures, Options, and Swaps

currency and interest rate...