Unit 2 Financial Markets Learning Objectives  Understand the meaning of finance;  Name some famous financial markets through the world;  Know about the exchange of stocks and other financial instruments;  Know about the determination of foreign exchange rate.

Focus On & Difficulties Related Information  1. Money and the Banking System  2. Finance & Financial Markets  3. Types of Financial Markets Money market Capital market  4. International Financial Market (Example: the southeast Asian financial crisis)

Money and the Banking System  Money is whatever is generally accepted in exchange for goods and services — accepted not as an object to be consumed but as an object that represents a temporary abode( 住处 ) of purchasing power to be used for buying still other goods and services.”  —— Milton Friedman

Finance & Financial Markets  Finance signifies capital in monetary form that is in the form of funds lent or borrowed,  normally for capital purposes, through financial markets or financial institutions.  When talk about the finance, we should mention the currency.

 (the goods to goods exchanges; mental currency; note currency)  Because mental currency (silver&gold)is very difficult to take along with, so the financial  market appeared in order that people can change the note currency.

Types of Financial Markets Money market Money markets are the places where people can raise short term funds usually with maturity up to one year. Money markets enable market participants to borrow or lend liquid assets and thereby meet needs for cash or investment of cash. The commercial banks often borrow the funds in this market because the change amount of the preparing cash for saving account handing to the central banks.

Capital market Capital market are the places where people can raise long term funds usually with maturity up to more than one year.( Many nations just borrow the loans from this financial market)

International Financial Markets  Example: the southeast Asian financial crisis in 1997 (the attract by the quantum fund of Soros )  It first happed in the country of Thailand in the financial market. The exchange rates of the Thailand currency decreased rapid. Then the influence delivered to the southeast Asian.

1. The imperfect financial industry system in these countries (soup flourish) 2. Too much depend on the foreign direct investment 3. The attract of the Quantum fund( this fund has gain $3 billion from the southeast Asian

 financial crisis)  The presidents of china claimed that the exchange rate of Reminbi will not decrease. So  Chinese government just used the half of the foreign storage to stable the exchange rates.  In 1998, the Quantum fund also attracted the financial market of Hong Kong. The linking

 exchange rate increased rapidly. At last, the central bank of China has interrupted into the financial market with regard to the requirement of the Hong Kong government.  In this fight with the Quantum fund, the People Bank of china has used one third of the  foreign storage($20 billion)

Words and Expressions  necessities n. 生活必须品  principal n. 本金  interest n. 利息  operation n. 经营，业务  tangible adj. 有形的  exchange n. 交换

 reserve n. 准备金，储备  debit n. 借记，借方  credit n. 信用，贷方  currency n. 货币  circulation n. 流通  acquisition n. 取得，收购  lopsided adj. 不均衡的  allocation n. 分配  principal n. 本金

 penetrate adj. 渗透  finance n. 金融  financial adj. 金融的  equity n.( 常用复数 ) 所有权，股票  bond n. 债券  integrate v. 使 … 一体化  speculative adj. 投机的  float v. 浮动  pegged adj. 挂钩的，联系的  donor n. 捐赠者

Words and Expressions  rescue v. 援救  be attributed to 归因于  be familiar with 熟悉  in terms of 折合，换算  as a result of 由于  to extend credit 给予信贷  refer to 提到，所指

 to raise funds 筹集资金  be categorized into 归类为  data processing 数据处理  to apply for 请求，申请  to rush to rescue 赶来救急  due to 由于  to result in 导致  to take measures 采取措施

Phrases of texts  be attributed to 归因于  be familiar with 熟悉  in terms of 折合，换算  as a result of 由于  to extend credit 给予信贷  refer to 提到，所指

 to raise funds 筹集资金  be categorized into 归类为  data processing 数据处理  to apply for 请求，申请  to rush to rescue 赶来救急  due to 由于  to result in 导致  to take measures 采取措施