一、 China’s Financial System
1. Describe the financial system of China. (Write down three institutions’ name of each sector optionally.)
简单描述中国的金融体系。
China’s financial system consists of banking, non-banking financial sectors, financial markets and regulatory commissions.
Banking includes PBC (The People’s Bank of China), policy banks, state-owned banks and other commercial banks. And among them, policy banks contain CDB (China Development Bank), EXIMBC (The Import-Export Bank of China), ADBC(Agricultural Development Bank of China); State-owned banks contain BC (Bank of China), ICBC (Industrial and Commercial Bank of China), ABC(Agricultural Bank of China),CCB(China Construction Bank); Other commercial banks contains BComm, Citic Bank, Everbright, Huaxia, Minsheng, Guangdong D(Guangdong Development Bank), Shenzheng D, Merchants, Xingye, Pudong D, Hengfeng, Zheshang, Urban Commmercial, Rural Commercial, and so on.
Non-banking financial sectors includes Financial Asset Management CO. which manage non-performing assets of the big 4 banks: ICBC’s Huarong, ABC’s Changcheng, BC’s Dongfang, CBC’s Xinda; Insurance Co.; Trust Invest.; Securities Co.; Financial Leasing; Urban CC; Rural CC;Investment fund; Postal savings and other institutions.
Financial markets include money market, stock market, band market, futures market, VC/PE and real estate.
Regulatory commission includes CBRC（China Banking Regulatory Commission）, CSRC（China Securities Regulatory Commission）, CIRC（China Insurance Regulatory Commission）, SAFE(State Administration of Foreign Exchange), and son on.
二、 Short History of Modern Finance
1. When is the watershed year of modern finance?
Nineteen fifty-two is the watershed year for modern finance.
现代金融的分水岭是19xx年。
2. Who is the founder/ Milestone Character of modern finance?
Harry Markowitz （哈里﹒马克维茨）.
现代金融的鼻祖是哈里﹒马克维茨。
3. Before 1945, the macro finance is concerned with the monetary system, and after 1945, it pays more attention to finance market.
19xx年以前宏观金融关注的是货币制度，19xx年以后更多关注的是金融市场。 4. What is the common characteristic of macro finance and micro finance? 宏观金融和微观金融的共同特点是什么？
Spiral of silence and epidemiology.
5. Key words：
Monetarist 货币主义学派
New Keynesian school 新凯恩斯主义学派
Spiral of silence 沉默的螺旋
Asset mispricing 资产误定价
Media sentiment 媒体情感
Animal spirit 非理性的动物精神
Epidemiology 流行病学
Inflation expectation 通胀预期
Media 媒体
三、 Money Market
1. What is money market?
什么是货币市场？
The money market is actually a collection of financial markets in which investors trade financial instruments that are considered to be “just as good” as money.
2. How many types of instruments in money market? Please list three items at least.
在货币市场中有几种操作工具？至少写出三种。
-United States Treasury bills (T-bills) （国债）
-Federal agency securities (from agencies like the Federal National Mortgage
Association—Fannie Mae) （联邦机构证券）
-Commercial paper （商业汇票）
-Repurchase agreements (Repos) （回购）
-Negotiable certificates of deposit (CDs,可转让定期存单)
-Federal funds （银行间拆借资金）
-Short-term municipal securities (短期市政证券)
3. Why are those financial instruments as good as money?
为什么金融工具可以发挥与货币一样的效能？
Because they meet the following three requirements:
(1) They are generally extremely liquid——you can easily buy and sell them; (Why are they liquid)
(2) They are considered to be quite safe because they are issued by strong, credit-worthy institutions (Like the U.S. Government); (Why are they safe?)
(3) They carry very little price risk because of their short-term expirations；（Why are they low price risk?）
4. How many funding institutions that involved in the money market?
卷入货币市场的融资机构有哪些？
For example, government agency, U.S. Treasury, banks, GSE（Government-sponsored entities）, large corporations, and so on.
5. What is money market funds?
什么是货币市场基金？
Money market funds are like mutual funds. When you invest in a money market fund, you are actually buying shares in that fund. Typically, money market fund managers try to keep the price of each share in the fund equal to $1. So if you are looking to invest $1,000 in a money market fund, you are most likely going to own
1,000 shares in that fund.
6. What are the money market accounts?
什么是货币市场账户？
Money market accounts are just like any other savings or checking account you might open at your bank. When you put money into a money market account, you are depositing it with your bank, or other financial institution. You are not buying shares in a fund or investing directly in any money-market assets.
四、 LIROR
1. What does LIBOR stand for?
LIBOR的全拼是什么？
LIBOR stands for London Interbank Offered Rate.
2. What’s the definition of LIBOR?
LIBOR的定义？
LIROR is the average interest rate that banks charge when they make short-term unsecured loans to other banks.
3. Who is responsible for and undertake the calculation of LIBOR? And what is the working process of calculation?
谁负责计算LIBOR利率？怎么计算？
The LIBOR is calculated by the British Bankers’ Association(BBA,英国银行家协会) who surveys 16 different major banks and asks them what rate they are charging other banks to borrow money. Once they have compiled the results, they take an approach similar to the judges who score Olympic diving take---they throw the four high scores (or rates) and throw out the four low scores and then find the average of the remaining eight scores. (Concise expression: The British Bankers’ Association is responsible for calculating LIBOR. And they calculate the average of the middle eight scores.)
4. What does a rise LIBOR tell us?
LIBOR利率上升意味着什么？
When LIBOR is rising, it tells us one of two things: 1) it tells us that interest rates in general are rising and thus LIBOR is also rising, and/or 2) it tells us that lending banks believe the banks they are lending to have a higher risk of defaulting on the loan so the lending bank has to charge a higher interest rate to offset this risk.
（Concise expression: 1）in generally, the interest rates are rising; 2) higher defaulting risk.)
五、 TED Spread 泰德利差
1. Where is the name of TED come from?
TED的名字是怎么得来的？
The TED spread consists of two financial instruments: the 3-month Treasury Bill and the Eurodollar futures contract. Investors simply took the “T” from T-bill and combined it with “ED”, which is the ticker symbol for the Eurodollar futures contract on the Chicago Mercantile Exchange(CME,芝加哥商品交易所)，and they came up with “TED”.
2. What does TED measure? And how TED Spread is calculated? TED度量了什么？它是怎么计算出来的？s
The TED spread measures the difference between the yield on the 3-month Treasury Bill (T-bill) and the value of the Eurodollar futures contract----which is based on the 3-month LIBOR rate.
To calculate the TED spread, you simply subtract the yield on the 3-month T-bill (which is unsecure) loans from the value of the Eurodollar contract (which is risk free).
3. When TED spread increasing，what does it tell us?
当TED利差增大时，说明了什么？
When the TED spread is increasing, it tells us either that banks believe the other banks they are lending to have a higher risk of defaulting on the loans so they are charging a higher interest rate to offset this risk or that investors are flocking to buy T-bills because they believe the stock market is faltering. It also tells us that the credit markets are not functioning as smoothly as they could be—which is sign
of potential economic contraction.
(Concise expression: a higher defaulting risk; sign of potential economic contraction.)
六、 Overnight Index Swaps(OIS)
1. Please write out the full name of OIS.
请全拼OIS.
Overnight Index Swap.
2. What’s the working process of the OIS?
OIS的运作机制是什么？
To create an OIS, we need to have two financial institutions. One institution has an overnight interest rate and the other institution has a fixed short-term interest rate. The two institutions agree to swap each other’s obligations. So at the end of a specified period, whoever ends up paying less interest will make up the difference to the other institution.
(Concise expression: whoever ends up paying less interest will make up the difference to the other institution.)
3. What does LIBOR-OIS tell us?
LIBOR-OIS告诉我们什么信息？
Liquidity risk premium. (流动性风险溢价)
4. What does the overnight index swap tell us?
隔夜指数掉期说明什么？
By itself, the overnight index swap rate doesn’t tell us much---other than what the overnight rate is. However, when you combine the overnight index swap rate with another indicator, like LIBOR, and create a spread like the LIBOR OIS spread, you can get a glimpse into the health of the global markets.
七、 The Fed in Post Subprime Crisis(无考题)
八、 The Economic of Structured Finance
1. What is the essence of structured finance activities?
结构性融资活动的本质是什么？
The essence of structured finance activities is the pooling of economic assets like loans, bonds, and mortgages, and the subsequent issuance of a prioritized capital structure of claims, known as tranches, against these collateral pools.
2. What is tranche?
什么是分层？
A prioritized capital structure of claims.
3. What are the features of structured finance products?
结构性金融产品的特点是什么？
We argue that both of these features of structured finance products—the extreme
fragility of their ratings to modest imprecision in evaluating underlying risks and their exposure to systematic risks—go a long way in explaining the spectacular rise and fall of structured finance.
（注：红色题目为第一次上课时老师说的考题，但是最后讲考题时没讲到，可以大概复习一下。）