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This is evidently not a good thing for the banks, which

such as Moody’s and Standard & Poors, and given an ‘investment grade’ according to their financial situation and performance, Aaa being the best, and C the worst, i.e. nearly bankrupt

I think all these codes of conduct embody the principle that the major risks of a transaction have to be

explained to customers, and that sensitivity and scenario analysis are offered (9) unsolicited to customers, and that these analyses should be done as objectively, as possible

Bond-issuing companies are rated by private ratings companies

now have to lend large amounts of money to borrowers, that are much less secure than blue chip companies

More and more companies now issue their own bonds rather than borrow from banks, because this is often cheaper: the

or borrow, usually by issuing bonds

Obviously, the higher the rating, the lower the interest rate at which

market may be a better judge of the firm’s creditworthiness than a bank, i.e. it may lend money at a lower interest rate

Companies finance most of their activities by way of internally generated cash flows. If they need more money they can either sell shares

a company can borrow

Alternatively, you can write a put option giving someone else the right to sell the shares at 100: if the market price remains above 100, no one will

at 100 (or higher): if the price falls, you can still sell your shares at this price

The Stock Exchange was formed as a private organisation whose members could be expelled if they

did not maintain the highest standards

On the contrary, if you expect the value of a share that you own to fall below its current price of 100, you can buy a put option

exercise the option, so you earn the premium

A put option gives the right to sell an asset at a certain price during a certain period of time. These options allow organizations

to hedge their equity investments

Thirdly, firms outside the Stock Exchange, such as British and foreign banks were allowed to become members of the Stock Exchange, and fourthly, a new computerised dealing system - Stock Exchange

Automated Quotations - was introduced

For example, if you think a share worth 100 will rise, you can

buy a call option giving the right to buy at 100, hoping to sell this option, or to buy and resell the share at a profit

On the contrary, if you expect the value of a share that you own to fall below its current price of 100, you can buy a put option

(or a currency, or a commodity) at a certain price during a certain period of time

As well as currencies and commodities, there is now a huge futures market in stocks and shares. One can buy options giving the right - but not the obligation - to buy

and sell securities at a fixed price in the future

A call option gives the right to buy securities

at 100 (or higher): if the price falls, you can still sell your shares at this price

Thirdly, firms outside the Stock Exchange, such as British and foreign banks were allowed to become members of the Stock Exchange, and fourthly, a new computerised dealing system - Stock Exchange

swaps and interest rate swaps with other companies or financial institutions

Options are merely one type of derivative instrument, based on another underlying price. Many companies nowadays also arrange currency

at a preferential rate, but which also needs yen, can arrange a swap with a Japanese company in the opposite position

For example, a French company that can borrow francs

Automated Quotations - was introduced

A call option gives the right to buy securities

debt might choose to exchange some of it for another company’s floating rate loans. Whether they save or lose money will depend on the movement of interest rates

Such currency swaps, designed to achieve interest rate savings, are of course open to the risk of exchange rate fluctuations. A company with a lot of fixed interest

against you or in your favour

If it’s a hedge you manage it passively, you don’t worry too much, if rates move

(or a currency, or a commodity) at a certain price during a certain period of time

If it’s not a hedge, if it’s to take on, if a derivative is used to (1) take on risk, to increase

and sell securities at a fixed price in the future

As well as currencies and commodities, there is now a huge futures market in stocks and shares. One can buy options giving the right - but not the obligation - to buy

returns, then it requires a more (2) hands-on management approach

You need (3) stop-loss limits, you need to conduct (4) scenario analysis to see how that transaction behaves under various conditions, you need to conduct (5) sensitivity

analysis to see what market conditions they’re most sensitive to

Bond-issuing companies are rated by private ratings companies

the money supply, they sell these bills to commercial banks, and withdraw the cash received from circulation; to increase the money supply they buy them back, paying with newly created money, which is put into circulation in this way

Thus, companies have a debt-equity ratio that is determined by balancing tax savings against the risk of being declared bankrupt by creditors.

Governments, of course, unlike companies, do not have the option of issuing equities. Consequently, they issue bonds

when public spending exceeds receipts from income tax, VAT, and so on. Long-term government bonds are known as gilt-edged securities, or simply gilts, in Britain, and Treasury Bonds in the US

The British and American central banks also sell and buy short-term (three month) Treasury Bills as a way of regulating the money supply. To reduce

such as Moody’s and Standard & Poors, and given an ‘investment grade’ according to their financial situation and performance, Aaa being the best, and C the worst, i.e. nearly bankrupt

Standardized deals for fixed quantities and time periods (e.g. 25 tons of copper to be delivered next June 30) are called futures; individual, non-standard, ‘over-the-counter’ deals between two parties (e.g. 1.7 billion yen to be exchanged

for dollars on September 15, at a rate set today) are called forward contracts

Obviously, the higher the rating, the lower the interest rate at which

and sell commodities, currencies, and various financial assets, at a future date (e.g. three, six or nine months ahead), but with the price fixed at the time of the deal

Every weekday, enormous amounts of commodities, currencies and financial securities are traded for immediate delivery at their current price on spot markets. Yet, there are also futures markets on which contracts can be made to buy

a company can borrow

For example, the prices of foodstuffs, such as wheat,

maize, cocoa, coffee, tea and orange juice are frequently affected by droughts, floods and other extreme weather conditions

Every weekday, enormous amounts of commodities, currencies and financial securities are traded for immediate delivery at their current price on spot markets. Yet, there are also futures markets on which contracts can be made to buy

and sell commodities, currencies, and various financial assets, at a future date (e.g. three, six or nine months ahead), but with the price fixed at the time of the deal

Futures, options and other derivatives exist in order that companies and

individuals may attempt to diminish the effects of, or profit from, future changes in commodity and asset prices, exchange rates, interest rates, and so on

Many businesses, therefore, want to buy or sell currencies at a guaranteed future price. Speculators, anticipating currency appreciations or depreciations, or

for use today. The most appropriate one for any given transaction will depend on the needs and objectives of those taking part in the exchange

The money itself can be issued en masse by a central authority or created ad hoc by two consenting parties in a mutual credit system; it may store

interest rate movements, are also active in currency futures markets, such as the London International Financial Futures Exchange (LIFFE, pronounced ‘life’)

A growing number of currency and payment system, each oriented toward different social and material incentives, are available

value or merely mark transactions; it may be backed or valued with something tangible or merely by the issuing authority; and it may take any shape–coins and bills, some chalk marks on a blackboard, or bits of data inside a computer

All kinds of communities – large and small; local, national, international, or virtual; co-operative or competitive – may

window”, when France and the United Kingdom requested such redemptions, inaugurating the current era of “floating” exchanges in which the values of each currency and of gold are determined autonomously by market forces

In August of 1971, U.S. President Richard Nixon unilaterally reneged on the dollar-gold equivalence standard by “closing the gold

create such an agreement

Money is an agreement within a community to use something as a medium of exchange.The agreement may be voluntary or coerced, conscious

or unconscious, and may fluctuate with time or remain fixed

Each country has a Central bank, which regulates the nation’s money supply. Central Banks may be privately-owned, government-owned, or of mixed private

for use today. The most appropriate one for any given transaction will depend on the needs and objectives of those taking part in the exchange

Outside of very narrowly defined communities, where it is generally accepted that everyone’s time has equal value (retirement homes, for example, where Time Dollars are very popular), systems enforcing a certain exchange rate for everyone’s time

will chase away those people, who are exceptionally talented, thorough, efficient and/or hardworking, by not providing reasonable value for their service

A growing number of currency and payment system, each oriented toward different social and material incentives, are available

and public ownership. Global co-ordination occurs primarily through the Bank for International Settlements for the top 10 +1 Central Banks; and through the IMF for the system as a whole

For example, on a single day in September 1992 the Bank of England lost five billion pounds in a hopeless attempt to support the pound sterling. For weeks, all the world’s financial institutions and rich individuals had been selling their pounds, as everyone except the British Government believed

five billion pounds. Yet, government policy can easily be defeated by the combined action of international speculators

Many businesses, therefore, want to buy or sell currencies at a guaranteed future price. Speculators, anticipating currency appreciations or depreciations, or

that ever since it joined the ERM in 1990, the pound had been seriously overvalued. When the British central bank ran out of reserves and could no longer buy pounds, the currency was withdrawn from the ERM and allowed to float, instantly losing about 15% of its value against the D-mark

Yet, government policy can easily be defeated by the combined action of international speculators. For example, on a single day in September 1992 the Bank of England lost

interest rate movements, are also active in currency futures markets, such as the London International Financial Futures Exchange (LIFFE, pronounced ‘life’)

This established parities between member currencies, and a margin of plus or minus 24%. If the rate diverged by more than this amount from the central parity, governments and central banks had to

of their currency, when necessary. Managed (or dirty) floating exchange rates are more common than freely floating ones. In 1979, most Western European governments joined the EMS (European Monetary System), with its ERM (Exchange Rate Mechanism)

Few governments, however, leave exchange rates wholly at the mercy of market forces. Most of them attempt to influence the level

will chase away those people, who are exceptionally talented, thorough, efficient and/or hardworking, by not providing reasonable value for their service

Outside of very narrowly defined communities, where it is generally accepted that everyone’s time has equal value (retirement homes, for example, where Time Dollars are very popular), systems enforcing a certain exchange rate for everyone’s time

intervene in exchange markets, buying or selling in order to increase or decrease the value of their currency

Many businesses, therefore, want to buy or sell currencies at a guaranteed future price. Speculators, anticipating currency appreciations or depreciations, or

interest rate movements, are also active in currency futures markets, such as the London International Financial Futures Exchange (LIFFE, pronounced ‘life’)

For example, the prices of foodstuffs, such as wheat,

they are expected to fall they are at a discount on spot prices.In recent years, especially since financial deregulation, exchange rates and interest rates have also fluctuated wildly

Consequently, many producers and buyers of raw materials want to hedge, in order to guarantee next season’s prices. When commodity prices are expected to rise, future prices are obviously higher than (at a premium on) spot prices; when

maize, cocoa, coffee, tea and orange juice are frequently affected by droughts, floods and other extreme weather conditions

By leaving it to the negotiating parties to settle on a price, one solves the problem of having to pre-determine the value of everyone’s time and goods, as was

attempted unsuccessfully under the Soviet planning system

Futures, options and other derivatives exist in order that companies and

individuals may attempt to diminish the effects of, or profit from, future changes in commodity and asset prices, exchange rates, interest rates, and so on

Participants may negotiate the amount of national currency to be exchanged in any particular

transaction: One hour of a service requiring extensive training, skill, and experience, or expensive equipment, or posing high risk, may justifiably be worth several hours of less demanding work

By virtue of the treaty signed after World War II at Bretton Woods, New Hampshire (U.S.A.), all national currencies are mediated through the U.S. dollar. The agreement followed negotiations

attempted unsuccessfully under the Soviet planning system

In August of 1971, U.S. President Richard Nixon unilaterally reneged on the dollar-gold equivalence standard by “closing the gold

window”, when France and the United Kingdom requested such redemptions, inaugurating the current era of “floating” exchanges in which the values of each currency and of gold are determined autonomously by market forces

By leaving it to the negotiating parties to settle on a price, one solves the problem of having to pre-determine the value of everyone’s time and goods, as was

primarily between the United States and Britain, and provided for the convertibility of U.S. dollars into gold

Enormous amounts of money move round the world, chasing high interest rates or capital gains, as investors - including rich individuals, companies and pension funds - seek to maximize the value of their assets. In London alone, over $300 billion worth of currency is traded on an average day - the equivalent of about 30% of the value

of their currency for any other convertible currency. This has led to the current situation, in which 95% of the world’s currency transactions are unrelated to transactions in goods, but are purely speculative

Many businesses, therefore, want to buy or sell currencies at a guaranteed future price. Speculators, anticipating currency appreciations or depreciations, or

of the goods Britain produces each year. Banks make a profit from the spread between a currency’s buying and selling prices

In the late 1970s and early 1980s, the American, British and other governments deregulated their financial systems, and abolished all exchange controls. Residents in these countries are now able to exchange any amount

interest rate movements, are also active in currency futures markets, such as the London International Financial Futures Exchange (LIFFE, pronounced ‘life’)

Since exchange controls were abolished, currencies including the US$ and the Ј sterling have in turn appreciated by up to 100% and then depreciated

by more than 50% against the currencies of major trading partners

Many manufacturers are in favour of fixed exchange rates, or a single currency. Although it is possible to some extent to hedge against

that speculators have too much power. Supporters of flexible rates include monetarists, who want countries to follow strict monetary rules, as well as Keynesians, who want to be free to devalue in the attempt to reduce unemployment

Other supporters of fixed exchange rates or a single currency include extreme conservatives, who want to return to something like the gold standard, as well as people on the left, who believe

currency fluctuations by way of futures contracts, forward planning is difficult, when the price of raw materials bought from abroad, or the price of your products in export markets, can rise or fall by 50% in only a few months

For example, on a single day in September 1992 the Bank of England lost five billion pounds in a hopeless attempt to support the pound sterling. For weeks, all the world’s financial institutions and rich individuals had been selling their pounds, as everyone except the British Government believed

or at any of the thousands of selling agents world-wide

You don’t have to bank with Barclays to buy Barclays Travellers Cheques - they may be purchased at any of the 5,000 offices of Barclays in 60 countries

that ever since it joined the ERM in 1990, the pound had been seriously overvalued. When the British central bank ran out of reserves and could no longer buy pounds, the currency was withdrawn from the ERM and allowed to float, instantly losing about 15% of its value against the D-mark

Other supporters of fixed exchange rates or a single currency include extreme conservatives, who want to return to something like the gold standard, as well as people on the left, who believe

that speculators have too much power. Supporters of flexible rates include monetarists, who want countries to follow strict monetary rules, as well as Keynesians, who want to be free to devalue in the attempt to reduce unemployment

The buyer (or importer) asks his bank to ‘issue’ or ‘open’ a Letter of Credit. He has ordered goods, the seller (or exporter) has sent an invoice to show details of the cost, and the buyer instructs his bank to issue the Letter of Credit, in favour

of their currency for any other convertible currency. This has led to the current situation, in which 95% of the world’s currency transactions are unrelated to transactions in goods, but are purely speculative

In the late 1970s and early 1980s, the American, British and other governments deregulated their financial systems, and abolished all exchange controls. Residents in these countries are now able to exchange any amount

of the seller for the amount of the purchase. There is usually a special application form, which the seller fills in and sends to his bank

With Barclays Bank U.S. Dollar and Sterling Travellers Cheques you can carry money safely and conveniently, wherever and whenever you travel. You can use them throughout the world, just as you would cash, to pay for meals

in restaurants, hotel accommodation, duty-free goods, airline and rail tickets, and entertainment in night clubs and casinos - in fact for almost all travel expenses other than minor incidentals, such as taxi fares

The Barclays Group of Banks has the world’s largest international branch network. One reason why Barclays travellers

cheques are your passport to trouble-free travel. This unparalleled network ensures that the Barclays service is second to none

A special feature is that every purchaser of Barclays Travellers Cheques is provided with a booklet listing some 8,000 points around the world, where

that speculators have too much power. Supporters of flexible rates include monetarists, who want countries to follow strict monetary rules, as well as Keynesians, who want to be free to devalue in the attempt to reduce unemployment

Other supporters of fixed exchange rates or a single currency include extreme conservatives, who want to return to something like the gold standard, as well as people on the left, who believe

refunds are obtainable. All these points are authorised to make an immediate refund for limited amounts. Any balance remaining may be speedily settled after a few necessary formalities

In the late 1970s and early 1980s, the American, British and other governments deregulated their financial systems, and abolished all exchange controls. Residents in these countries are now able to exchange any amount

of their currency for any other convertible currency. This has led to the current situation, in which 95% of the world’s currency transactions are unrelated to transactions in goods, but are purely speculative

You don’t have to bank with Barclays to buy Barclays

Travellers Cheques - they may be purchased at any of the 5,000 offices of Barclays in 60 countries or at any of the thousands of selling agents world-wide

Barclays Travellers Cheques cannot be cashed without your personal on-the-spot countersignature- even if they

are stolen or accidentally lost, your money is still safe

Barclays Travellers Cheques cannot be cashed without your personal on-the-spot countersignature- even if they

and entertainment in night clubs and casinos - in fact for almost all travel expenses other than minor incidentals, such as taxi fares

With Barclays Bank U.S. Dollar and Sterling Travellers Cheques you can carry money safely and conveniently, wherever and whenever you travel. You can use them throughout the world, just as you would cash, to pay for meals in restaurants, hotel accommodation, duty-free goods, airline and rail tickets,

are stolen or accidentally lost, your money is still safe

Barclays Travellers Cheques are encashable at banks world-wide for their equivalent in local currency. They are available in denominations of U.S. $10, $20, $50,

$100 and $250 and Sterling Ј5, Ј10,Ј20, Ј50 and Ј100

Yet, they underestimated the impact of speculation, and

reflect economic realities more precisely than calculations by central bank officials

The Barclays Group of Banks has the world’s largest international branch network. One reason why Barclays travellers

the fact that companies and investors frequently follow short-term money market trends, even if these are contrary to their own long-term interests

Proponents of floating exchange rates, such as Milton Friedman, argued that currencies would automatically establish stable exchange rates, which would

cheques are your passport to trouble-free travel. This unparalleled network ensures that the Barclays service is second to none

The Barclays Group of Banks has the world’s largest international branch network. One reason why Barclays travellers

$100 and $250 and Sterling Ј5, Ј10,Ј20, Ј50 and Ј100

Barclays Travellers Cheques are encashable at banks world-wide for their equivalent in local currency. They are available in denominations of U.S. $10, $20, $50,

cheques are your passport to trouble-free travel. This unparalleled network ensures that the Barclays service is second to none

Barclays the international bank for international travellers. The Barclays Group of Banks has the world’s largest international branch network. One reason why

Barclays travellers cheques are your passport to trouble-free travel. This unparalleled network ensures that the Barclays service is second to none

The buyer (or importer) asks his bank to ‘issue’ or ‘open’ a Letter of Credit. He has ordered goods, the seller (or exporter) has sent an invoice to show

1944 and 1971, many currencies were pegged against the US dollar, i.e. their parities with the US dollar were fixed

The Bretton Woods Agreement of 1944 established fixed exchange rates, defined in terms of gold and the US dollar. Between

details of the cost, and the buyer instructs his bank to issue the Letter of Credit, in favour of the seller for the amount of the purchase. There is usually a special application form, which the seller fills in and sends to his bank

Yet, they underestimated the impact of speculation, and

the fact that companies and investors frequently follow short-term money market trends, even if these are contrary to their own long-term interests

Barclays the international bank for international travellers. The Barclays Group of Banks has the world’s largest international branch network. One reason why

details of the cost, and the buyer instructs his bank to issue the Letter of Credit, in favour of the seller for the amount of the purchase. There is usually a special application form, which the seller fills in and sends to his bank

Gold convertibility was replaced by a system of floating exchange rates. (Today, the US dollar - the unofficial world currency - is merely

Barclays travellers cheques are your passport to trouble-free travel. This unparalleled network ensures that the Barclays service is second to none

The buyer (or importer) asks his bank to ‘issue’ or ‘open’ a Letter of Credit. He has ordered goods, the seller (or exporter) has sent an invoice to show

a piece of paper on which is written ‘In God We Trust.’ God, not gold!)

Direct consumption

прямое потребление

Deposit account

каналы распределения

Distribution channels

notice account

time account

notice account

current account

checking account

bank transfer

banker’s transfer

lender

прямое потребление

Direct consumption

notice account

Deposit account

giver

Cashpoint machine

banker’s transfer

time account

cash dispencer

bank transfer

notice account