Handbook of Key Global Financial Markets, Institutions, and Infrastructure

Handbook of Key Global Financial Markets, Institutions, and Infrastructure

1st Edition - November 27, 2012
  • Editor-in-Chief: Gerard Caprio
  • Hardcover ISBN: 9780123978738
  • eBook ISBN: 9780124058989

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Description

Understanding twenty-first century global financial integration requires a two-part background.  The Handbook of Key Global Financial Markets, Institutions, and Infrastructure begins its description of how we created a financially-intergrated world by first examining the history of financial globalization, from Roman practices and Ottoman finance to Chinese standards, the beginnings of corporate practices, and the advent of efforts to safeguard financial stability.  It then describes the architecture itself by analyzing its parts, such as markets, institutions, and infrastructure.  The contributions of sovereign funds, auditing regulation, loan markets, property rights, compensation practices, Islamic finance, and others to the global architecture are closely examined.  For those seeking substantial, authoritative descriptions and summaries, this volume will replace books, journals, and other information sources with a single, easy-to-use reference work.

Key Features

  • Substantial articles by top scholars sets this volume apart from other information sources
  • Diverse international perspectives result in new opportunities for analysis and research
  • Rapidly developing subjects will interest readers well into the future

Readership

Undergraduates and graduate students worldwide working in all areas of finance and economics.  Researchers will typically be examining the global aspects and implications of their particular interests.

Table of Contents

  • Volume 1

    Section Editors for this volume

    Preface

    Contributors

    I: Globalization of Finance: An Historical View

    Chapter 1. History of Financial Globalization, Overview

    References

    Chapter 2. Banking Fragility, United States, 1790–2009

    Introduction

    Banking Fragility in Theory and in Historical Reality

    US Banking Crises: 1790–1933

    A Worldwide Tale of Two Banking Eras: 1875–1913 and 1978–2009

    Glossary

    References

    Further Reading

    Chapter 3. Bretton Woods and Monetary Regimes

    Introduction

    Types and Examples of Monetary Regimes

    The Classical Gold Standard

    The Interwar Years, the Gold-Exchange Standard, and the Great Depression

    Bretton Woods and the Anglo-American Compromise

    Conclusion

    Further Reading

    Chapter 4. British Corporate Finance, 1500–1860

    World in 1500

    Impact of the Voyages of Discovery

    Emergence of the Joint-Stock Company

    Rise of the Secondary Market in Shares

    War Financing – State and Capital Markets

    Into the Nineteenth Century

    References

    Chapter 5. Chinese Finance, 1348–1700

    Public and Private Finance in China, 1000–1700

    The Monetary System

    Public Finance

    Credit and Private Finance

    Summary

    Glossary

    Further Readings

    Chapter 6. Chinese Money and Monetary System, 1800–2000, Overview

    A Conceptual Framework

    1800–50

    1850–1911

    1911–30

    1930–49

    Acknowledgments

    Glossary

    References

    Chapter 7. Dutch Bank Finance, 1600–1800

    An Exchange Bank

    The First Five Decades

    Fiat Money

    Monetary Policy

    Eighteenth Century

    Conclusion

    Further Reading

    Chapter 8. Dutch Corporate Finance, 1602–1850

    Introduction

    From Partnerships to Chartered Public Companies, 1602–1680

    Branching Out, 1680–1795

    New Challenges, 1795–1850

    Conclusion

    Further Reading

    Relevant Websites

    Chapter 9. The Financial Revolution in England

    Introduction

    The Origins of the Financial Revolution in England

    The Development of the Instruments of State Debt

    Controlling the Costs of Debt

    The Question of Credibility

    The Consequences of England’s Financial Revolution

    Glossary

    Further Reading

    Chapter 10. Commercial Finance in Europe, 1700–1815

    Introduction

    The Instrument: Bills of Exchange

    Sources

    Mapping Commercial Finance

    The Cost of Commercial Finance: Searching for Interest Rate

    Conclusion

    See also

    References

    Chapter 11. Exchanges, Rules Governing

    France

    Germany

    Great Britain

    Owners Versus Operators

    United States

    Further Reading

    Chapter 12. French Corporate Finance, 1500–1900

    Glossary

    References

    Chapter 13. Genoese Finance, 1348–1700

    Introduction

    The Origins of the Genoese Public Debt (Twelfth–Twenty-fourth Centuries)

    The Birth of the Officium Comperarum Sancti Georgii

    The Governance of the Office of Saint George

    The Birth of the Republic of Genoa

    The Banking Activity of the House of Saint George

    The Genoese Exchange Fairs

    The New Debt of the Republic: The Creation of the Monti

    Conclusion

    See also

    Glossary

    Further Readings

    Relevant Websites

    Chapter 14. The Political Economy of Global Financial Liberalization in Historical Perspective

    Introduction

    What Is There to Explain?

    Theory

    History

    Conclusion

    Acknowledgments

    References

    Chapter 15. Alexander Hamilton

    Introduction

    Hamilton’s Origins

    War and Finance

    The Confederation Interim

    Secretary of the Treasury

    Conclusion: The US Financial Revolution and Economic Growth

    Further Reading

    Chapter 16. Hanseatic Merchants and Credit, 1300–1700

    Introduction

    Origins of Banking in Northern Germany

    Credit Instruments in the Fifteenth and Sixteenth Centuries

    Immigration and Innovation

    The Adaptation of Western Credit Instruments in the Baltic Trade

    Conclusion

    References

    Chapter 17. John Law and his Experiment with France, 1715–1726

    The Beginnings

    The Pinnacle

    The Debacle

    The Impact

    See also

    Further Reading

    Chapter 18. Low Countries Finance, 1348–1700

    Introduction

    Common Origins

    Going Separate Ways: The Dutch Revolt

    Holland’s Exceptionalism

    Entering a Vicious Debt Circle

    Constrained by Local Particularism: The Austrian Netherlands

    Conclusion

    Further Reading

    Chapter 19. Milanese Finance, 1348–1700

    The Viscontis and the Emergence of a Tax State (Mid-Fourteenth Century to 1447)

    The Consolidation of the Government Financing System Between the Ambrosiana Republic and the Sforzas (1447–1535)

    The Rise of a Fiscal State Under the Habsburgs (1535–1706)

    See also

    References

    Chapter 20. Finance in the Ottoman Empire, 1453–1854

    Introduction

    Money, Credit, and Islam

    Business Partnerships

    Flexibility in the Monetary System

    Fiscal Institutions and Public Finance

    Linkages with Western European Capital Markets?

    From Debasements to Bimetallism

    Financing the State: The Galata Bankers

    Conclusion

    See also

    Further Reading

    Chapter 21. Papal Finance, 1348–1848

    The Making of the Papal States

    The Role of Public Debt

    The Growth of Financial Structures

    The Times of Decline

    See also

    Glossary

    Further Reading

    Relevant Websites

    Chapter 22. Precious Metals and Moneys, 1200–1800

    Islamic Market Unification; Chinese Silver Exports During the Mongol Period

    Intensification of Chinese Silverization from the Mid-Fifteenth Century

    The First Global Cycle of Silver (1540–1640): Bimetallic Ratios and the Silver-for-Gold Trade

    The First Global Cycle of Silver (1540–1640): The Role of Japan

    The First Global Cycle of Silver (1540–1640): Spanish-American Silver

    Globalization’s Sixteenth-Century Birth and Subsequent Ramifications

    The Mexican Cycle of Silver (1700–1750) and American Crops and Seeds

    Conclusions

    References

    Chapter 23. Rentes and the European ‘Financial Revolution’

    Chief Features of the Modern Financial Revolution

    The Geographic Origins of the ‘Financial Revolution’: Public Finances in the Low Countries and France

    The Historical Origins of the Rente Contracts: In Private Agricultural Finance

    The Usury Doctrine and the Revival of the Anti-Usury Campaign

    The Relationship Between Franco-Flemish Urban Rentes and the Anti-Usury Campaign in the Thirteenth Century

    The Ecclesiastical Debate About the Usurious or Licit Nature of Rentes

    Payments to Rentiers in Later-Medieval Flemish Towns

    The Development of a Permanent Funded National Debt in Early-Modern France

    The Development of Permanent Funded National Debts in Spain (Castile)

    The Public Finances of the Later Medieval Italian City States: Forced Loans

    Protestant England and the Usury Question

    The Beginnings of the English Financial Revolution, from 1693

    Excise Taxes in Funding the English National Debt

    The Three Sisters and the English National Debt

    The Role of Annuities in the English National Debt (to 1719–20)

    The Aftermath of the South Sea Bubble and Pelham’s Conversion: 1721–57

    Economic Contributions of the Financial Revolution

    See also

    Glossary

    Appendix Yields on Perpetual Rents, Life Rents, and Loans

    References

    Chapter 24. Ancient Roman Finance

    References

    Chapter 25. Spanish Finance, 1348–1700

    Introduction

    Political Organization

    Revenues

    Debt

    See also

    Glossary

    Further Reading

    Chapter 26. The Financial Revolution in Sweden, 1650–1900

    Introduction

    The Swedish Financial Revolution

    Conclusions

    See also

    References

    Chapter 27. Global Financial Brands and the Underwriting of Foreign Government Debt since 1815

    Introduction

    Focus, Figures, and Facts

    Prospecting

    Planning

    Placing

    Post-Issue Support and Performance

    Conclusion: The Global Financial System as a Structured Product

    Acknowledgments

    References

    Relevant Websites

    Chapter 28. Venetian Finance, 1400–1797

    Revenues

    Taxation

    Taxpayers

    Financial Needs

    Public Debt

    The Floating Debt

    See also

    Glossary

    Further Reading

    Chapter 29. Wars and the International Trading System, 1900–2000

    See also

    Further Reading

    II: Key Market, Institutions, and Infrastructure In Global Finance

    Chapter 30. Development of Accounting Standards

    United States

    United Kingdom, Canada, Australia, France, Germany, and Japan

    International Accounting Standards Board

    See also

    Conclusion

    Acknowledgment

    Glossary

    References

    Chapter 31. Contemporary Audit Regulation – Going Global!

    Introduction: Audit Regulation

    Key Players in the Audit Regulatory Arena

    The Global Regulatory Involvement of Audit Firms

    The Global Regulatory Involvement of National Professional Accounting Bodies

    Audit Regulation and Audit Quality

    Regulatory Compliance and Enforcement

    Conclusion: Maintaining Public Interest in Global Regulation

    See also

    Appendix Abbreviations

    Further Reading

    Relevant Websites

    Chapter 32. Justifications for Audits of Financial Statements

    Introduction

    Justifications for Financial Statement Audits

    The Justification for Government Intervention into Auditing

    The Implementation of External Audits

    Auditing After the Securities Acts

    The Structure and Growth of the Industry

    Competition Rules Change in the 1970s

    Modern Firm Structure

    Competing Incentives for Firms in the 1990s

    Sarbanes–Oxley Act of 2002

    The Future of Auditing

    References

    Chapter 33. Global Banks and Financial Intermediaries

    Introduction

    The Standard Model of Banking

    Banking in the Postwar Period

    The Emergence of a New Banking System

    Distinctive Features of Modern Banking

    Conclusion

    References

    Chapter 34. Corporate Governance

    Basic Concepts

    Corporate Governance as a System

    Internal Institutions

    External Institutions

    References

    Chapter 35. Credit Ratings and Credit Rating Agencies

    Introduction

    Objects of Credit Ratings

    Business Models of Credit Rating Agencies

    Functions of Credit Ratings and Credit Rating Agencies

    Market Structure and Competition

    Regulation of Credit Rating Agencies

    See also

    Further Reading

    Chapter 36. Earnings Quality

    A Case in Point

    What Exactly Is Earnings Quality?

    Who Cares About Earnings Quality?

    What Affects Earnings Quality?

    Can Investors See Through the Quality Veil?

    Are Things Getting Better?

    And Earnings Quality Around the World?

    From Descriptive to Prescriptive: How to Assess Earnings Quality?

    Conclusion

    Acknowledgments

    Further Reading

    Chapter 37. Exchanges

    Exchanges and Their Evolution

    Exchange-Traded Instruments

    Organization and Governance of Exchanges

    Regulation of Exchanges

    Best Execution and the National Market System

    Globalization and Transnational Exchanges

    Chapter 38. Equity Markets

    Definition, Structure, and Functions of Equity Markets

    Evolution of Equity Markets

    Equity Markets Around the World

    Globalization and Localization

    The Future of Equity Markets

    Glossary

    See also

    Further Reading

    Relevant Websites

    Chapter 39. Fair Value and Accounting

    Introduction

    The Purpose of the Balance Sheet

    Fair Value Measurement Standards

    Fair Value and Historical Cost Accounting

    Assets That Generate Cash Directly

    Fair Value and the Financial Crisis

    Fair Value and Financial Instruments After the Crisis

    Full Fair Value Financial Statements

    Conclusion

    Glossary

    Further Reading

    Chapter 40. Fair Value Accounting, Disclosure and Financial Stability

    Introduction

    The Role of Accounting Standards

    How Might FVA Have Exacerbated the Financial Crisis?

    See also

    References

    Chapter 41. Investment Banks

    Introduction

    Concepts

    Origins

    Functions and Objectives

    Investment Banks and Commercial Banks

    Business Streams

    Markets in Information and Reputational Capital

    Questions, Concerns, and Post-crisis Outcomes

    See also

    Glossary

    Further Reading

    Chapter 42. Overview of Islamic Finance

    What Is Forbidden (Ḥarām): Gharar (Uncertainty)

    What Is Forbidden (Ḥarām): Ribā (Interest)

    Legal Devices (Ḥiyal) to Circumvent the Proscriptions on Gharar and Ribā

    Islamic Bonds (Ṣukuk) and Securitization

    Insurance (Takaful) and Transfers (Ḥawālah)

    New Islamic Products: Sharī‘a Compliant Investment Funds

    Further Reading

    Chapter 43. Loan Markets

    Overview

    Advantages of Loan Markets to Borrowers

    Key National and Regional Loan Markets

    Leading Industry Associations

    Evolution of the Loan Asset

    The Financial Institutions Involved in the Loan Markets

    Two Stages of the Loan Cycle: Primary and Secondary

    Law, Regulation, and Litigation

    The Global Financial Crisis and its Impact on Loan Markets

    The Future

    See also

    Further Reading

    Relevant Websites

    Chapter 44. Microfinance: Costs, Lending Rates, and Profitability

    Introduction

    Introduction to Microfinance

    High Profitability?

    Outreach: The MFI’s Social Mission

    Conclusions

    References

    Further Reading

    Relevant Websites

    Chapter 45. OTC – Derivative Market

    The Over-the-Counter Derivatives Market

    Understanding the CDS Market and the Use of CDS Data

    Glossary

    Appendix: Typical OTC Derivative Position from an SIFI’s Financial Statement

    References

    Further Reading

    Chapter 46. Global Payment and Settlement Systems

    Introduction

    Foreign Exchange Transactions

    Payment System Risk

    The Failure to Complete Settlement on Participant’s Default

    Conclusion

    Further Reading

    Chapter 47. Pension Funds

    Introduction

    What are Pension Plans, Funds, and Firms?

    Key Policy Issues with Pension Funds

    References

    Chapter 48. Project and Asset Finance

    Introduction

    Project and Asset Finance and Economics

    Project Finance

    Major Asset Financing: Ships and Aircraft

    Endnote

    See also

    Glossary

    Further Reading

    Relevant Websites

    Chapter 49. Property Rights in an Era of Global Finance

    Introduction

    The Nature of Property Rights

    The Local Origins of Property

    Supranational Property Instruments: A General Survey

    The Challenge of Globalization: Resource-Specific Comments

    Conclusion

    References

    Chapter 50. Securities Settlement Systems

    Definition

    The Legal Requirements for Transferring Securities

    The Creation of the Contemporary Depository Model

    The Legal Characteristics of Settlement in the Currently Dominant, Depository Model

    Disadvantages of the Depository Model

    Ameliorating the Disadvantages of the Depository Model

    The Future of Securities Settlement

    Glossary

    Further Reading

    Relevant Websites

    Chapter 51. Securitization and Structured Finance

    Overview of Securitization

    The Economics of Securitization

    Potential Abuses of Securitization

    The Future of Securitization

    See also

    Further Reading

    Chapter 52. Sovereign Funds

    Overview: Definition, Type, Size, and Number

    Background and Context: Global Imbalances

    Investment Strategies and Performance of SWFs

    Issues and Concerns Over SWFs

    Regulatory Response to the Rise of SWFs

    Implications of SWFs for the Global Financial System

    Further Reading

    Relevant Websites

    Chapter 53. Finance

    Introduction

    Cash in Advance

    Documentary Sale with Confirmed Letter of Credit

    Open Account

    Commercially Based Working Capital Financing

    Export Credit Insurance and Financing

    Factoring and Forfaiting

    Additional Points

    Further Reading

    Index

Product details

  • No. of pages: 634
  • Language: English
  • Copyright: © Academic Press 2012
  • Published: November 27, 2012
  • Imprint: Academic Press
  • Hardcover ISBN: 9780123978738
  • eBook ISBN: 9780124058989

About the Editor in Chief

Gerard Caprio

Gerard Caprio
Gerard Caprio is William Brough Professor of Economics and Chair, Center for Development Economics at Williams College. He has served as the Head of Financial Sector Policy at The World Bank and Vice President and Head of Global Economics at J.P. Morgan.

Affiliations and Expertise

Williams College, Williamstown, MA