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International banking and money market 12/20/2010 B02013 - INTERNATIONAL FINANCEAND TECHNOLOGY TRANSFER 1... The impact of foreign direct investment FDIon economic growth.. The role of F

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CHAPTER 3: INTERNATIONAL FINANCE

AND TECHNOLOGY TRANSFER

1 International investment

2 The market for foreign exchange

3 International banking and money market

1 International investment

2 The market for foreign exchange

3 International banking and money market

12/20/2010 B02013 - INTERNATIONAL FINANCEAND TECHNOLOGY TRANSFER 1

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1 International investment

1.1.Foreign direct investment (FDI)

• Forms of FDI : export and Multinational

corporation

• Reasons for FDI

1.1.Foreign direct investment (FDI)

• Forms of FDI : export and Multinational

corporation

• Reasons for FDI

12/20/2010 B02013 - INTERNATIONAL FINANCEAND TECHNOLOGY TRANSFER 2

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1.2 The impact of foreign direct investment (FDI)

on economic growth

1.3 The role of FDI:

Foreign direct investment (FDI) plays a special role in stimulating the growth of countries’

competitiveness and FDI has the positive

growth effects the economy around the world

1.2 The impact of foreign direct investment (FDI)

on economic growth

1.3 The role of FDI:

Foreign direct investment (FDI) plays a special role in stimulating the growth of countries’

competitiveness and FDI has the positive

growth effects the economy around the world

12/20/2010 B02013 - INTERNATIONAL FINANCE ANDTECHNOLOGY TRANSFER 3

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1.4 International portfolio investment:

• Definition of international portfolio investment

• The benefits of international portfolio investment

- Advantages

- International diversification

1.4 International portfolio investment:

• Definition of international portfolio investment

• The benefits of international portfolio investment

- Advantages

- International diversification

12/20/2010 B02013 - INTERNATIONAL FINANCE ANDTECHNOLOGY TRANSFER 4

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2.1 Function and Structure of the FOREX Market

– FX Market Participants

– Correspondent Banking Relationships

2 The Market for Foreign Exchange

2.1 Function and Structure of the FOREX Market

– FX Market Participants

– Correspondent Banking Relationships

12/20/2010 B02013 - INTERNATIONAL FINANCEAND TECHNOLOGY TRANSFER 5

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2.2 The Spot Market

– Spot Rate Quotations

– The Bid-Ask Spread

– Spot FX Trading

– Cross Exchange Rate Quotations

– Triangular Arbitrage

– Spot Foreign Exchange Market Microstructure

2.2 The Spot Market

– Spot Rate Quotations

– The Bid-Ask Spread

– Spot FX Trading

– Cross Exchange Rate Quotations

– Triangular Arbitrage

– Spot Foreign Exchange Market Microstructure

12/20/2010 B02013 - INTERNATIONAL FINANCE ANDTECHNOLOGY TRANSFER 6

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2.3 The Forward Market

– Forward Rate Quotations

– Long and Short Forward Positions

– Forward Cross-Exchange Rates

– Swap Transactions

– Forward Premium

2.3 The Forward Market

– Forward Rate Quotations

– Long and Short Forward Positions

– Forward Cross-Exchange Rates

– Swap Transactions

– Forward Premium

12/20/2010 B02013 - INTERNATIONAL FINANCE ANDTECHNOLOGY TRANSFER 7

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3 International Banking and Money Market

3.1.International Banking Services

- The World’s Largest Banks

3.2 Types of International Banking Offices:

- Representative Offices

- Foreign Branches

- Subsidiary and Affiliate Banks

- Edge Act Banks

- Offshore Banking centers

- International Banking Facilities

- Correspondent Bank

3.1.International Banking Services

- The World’s Largest Banks

3.2 Types of International Banking Offices:

- Representative Offices

- Foreign Branches

- Subsidiary and Affiliate Banks

- Edge Act Banks

- Offshore Banking centers

- International Banking Facilities

- Correspondent Bank

12/20/2010 B02013 - INTERNATIONAL FINANCEAND TECHNOLOGY TRANSFER 8

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3.3 Reasons for International Banking:

- Low Marginal Costs

- Knowledge Advantage

- Home Nation Information Services

- Prestige

- Regulatory Advantage

- Wholesale Defensive Strategy

- Retail Defensive Strategy

- Transactions Costs

- Growth

- Risk Reduction

3.3 Reasons for International Banking:

- Low Marginal Costs

- Knowledge Advantage

- Home Nation Information Services

- Prestige

- Regulatory Advantage

- Wholesale Defensive Strategy

- Retail Defensive Strategy

- Transactions Costs

- Growth

- Risk Reduction

12/20/2010 B02013 - INTERNATIONAL FINANCE ANDTECHNOLOGY TRANSFER 9

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Discuss about arbitrage: Bonds, Stocks,

Derivatives, Commodities and Currencies and

how to make money with Arbitrage trading

Discussion questions

Discuss about arbitrage: Bonds, Stocks,

Derivatives, Commodities and Currencies and

how to make money with Arbitrage trading

12/20/2010 B02013 - INTERNATIONAL FINANCEAND TECHNOLOGY TRANSFER 10

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