Guide to Analysing Companies
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FINANCE Essencial finance
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- THE CHANGING FACE OF MARKETS
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ESSENTIAL FINANCE
01 Essential Finance 10/11/06 2:21 PM Page 14 it is today. If so, central banks such as the Federal Reserve will have to keep a firmer hand on the tiller and watch out for storms. As lenders of last resort, if no longer regulators, central bankers have to strike a delicate balance between intervening and not intervening in financial markets. In Greenspan’s words: “The question is not whether our actions are seen to have been necessary in retrospect; the absence of a fire does not mean that we should not have paid the fire insurance. Rather, the question is whether, ex ante, 1 the possibility of a systemic collapse was sufficient to warrant an intervention. Often we cannot wait to see whether, in hindsight, the problem will be judged to have been an isolated event and largely benign.” Having encouraged the deregulation of financial markets during the heady days of the 1990s, both regulators and in- vestors are now living with the consequences. While stockmar- kets remain flat or worse and the world economy is unstable, regulators will refrain from tightening controls on investment banks to the point that they threaten their profitability. However, it is likely that such institutions and the markets from which they draw their business will continue to change, perhaps at an even faster pace than before. If so, they are likely to appear to somebody who wakens from a long, deep sleep at the end of the present decade as different as they did to our Rip Van Winkle wakening today after 30 years asleep. THE CHANGING FACE OF MARKETS 15 1 As a result of something done before. 01 Essential Finance 10/11/06 2:21 PM Page 15 A to Z 01 Essential Finance 10/11/06 2:21 PM Page 17 01 Essential Finance 10/11/06 2:21 PM Page 18 This page intentionally left blank Aa Acceptance A bill of exchange that has been endorsed by a bank; that is, a bank has given its guarantee that it will pay the bill should the buyer fail to do so. This is a time-honoured way of fi- nancing trade. An exporter whose bill is accepted by a top-rank bank can then sell the bill at a discount in the financial markets, so improving the exporter’s cash flow. Or the ex- porter can wait until the importer’s bank has remitted the funds or until the bill has matured. Download 1.1 Mb. Do'stlaringiz bilan baham: 
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