In the financial market, it is both a supplier of funds (corporate provident funds, depreciation, undistributed earnings, corporate annuities, etc.)

They are also those in need of funds (to meet short-term liquidity needs and long-term investment needs)

The largest demander of funds in the financial market and the supplier of risk-free assets

Through the issuance of government bonds (the subject matter of the central bank's open market operations), we can make up for the fiscal deficit and meet the financial market's demand for safe financial assets.

The final consumer is the main provider of funds in the financial market.

Their savings are rarely invested directly but enter the financial market through the purchase of financial instruments.

intermediary sector of financial markets

Mainly engaged in credit business (providing loans to other departments to obtain spread income) and brokerage business (managing the public's financial assets to obtain commission income)

Therefore, in essence, financial institutions are not providers of funds to the financial market

It is both a government department and a banking institution. Provide government macro-control through indirect financial transaction business

It is not for the purpose of profit, but for the purpose of stabilizing economic fluctuations and maximizing social welfare.

In practice, the central bank cannot pursue maximizing returns from open market operations, but continued losses and profits are not conducive to financial market stability.

Direct financing is when companies issue stocks, bonds, etc. to borrow money from investors.

Indirect financing is when companies borrow money from banks

Direct financing is borne by investors

Indirect financing is borne by bank shareholders

Indirect financing spreads among banks and enterprises, which may cause systemic financial risks

Direct financing spreads only among bond investors and may also pass losses on to banks

Indirect financing is decided through negotiation between both parties, and there is no active secondary loan transaction market.

Direct financing has an active secondary securities trading market. The price is mainly determined by market supply and demand. It has strong liquidity and a high degree of marketization.

In countries where the indirect financing model is dominant, the central bank mainly adopts quantitative monetary policy for macro-control, and bank credit is the main transmission channel of monetary policy.

In countries with developed direct financing markets, price-based monetary policies that focus on regulating interest rates are more effective, and the investment portfolio of financial assets is the main transmission channel of monetary policy.

Base money (central bank liabilities) refers to commercial banks’ reserves at the central bank. Obtaining reserves is the main purpose of commercial banks’ financing in the money market.

Deposits of enterprises and individuals in commercial banks (commercial bank liabilities), enterprises issue bonds to obtain commercial bank deposits, and individuals purchase bonds to reduce bank deposits. Therefore, the liquidity of enterprises and individuals falls under the category of M2

The various businesses of China’s money market are mainly concentrated in China’s inter-bank market

The Chinese inter-bank trading market consists of the China Foreign Exchange Trading Center and the National Interbank Funding Center.

Interbank lending:

Bond transactions

Derivatives trading

RMB foreign exchange spot trading

RMB foreign exchange forward transactions

RMB foreign exchange swaps

RMB foreign exchange currency swap transaction

RMB to foreign exchange options trading

Foreign currency pair trading

government. Businesses and Financial Institutions

Determined based on market currency supply and demand and the credit rating of the bond

Underwriter:

Public offering (the issuer issues bonds to an unspecified majority of investors. The issuance scale is large, agency ratings must be obtained, financial information must be disclosed to the market, and regulatory approval is required)

Private placement (issuance of bonds to a small number of specific investors. Targeted issuance and targeted disclosure of financial information, institutions generally have strong securities analysis capabilities)

Specifically, one-time registration, multiple issuance and rolling issuance models can be implemented.

Fixed income sales method (applicable to long-term treasury bonds), competitive bidding method (public bidding, applicable to short- and medium-term government bonds), continuous distribution method (setting up special counters in the market, applicable to non-transferable bonds), direct sales method (applicable to non-transferable bonds) Treasury bonds issued by countries with relatively stable market interest rates)

British auction, Dutch auction, American auction

Price auction (the face price and coupon rate are fixed, and the bidding price is proposed based on the expected changes in market interest rates)

Yield auction (bonds are sold at a fixed price and bids are placed on the bond interest rate)

Fee auction (the issuance price and interest rate are determined, and subscribers can only request fees)

Payment auction (auction is conducted based on the length and order of payment periods of treasury bond subscribers)

Accurately reflects market liquidity supply and demand conditions and interest rate levels, and can provide a benchmark for pricing other financial assets.

The central bank uses the term structure relationship between short-term interest rates and long-term interest rates to implement monetary policy operations by affecting the shape of the yield curve.

Cash coupon buyout:

repurchase transaction

Futures trading:

The issuer entrusts a financial intermediary to issue shares to the public

Issuers must disclose detailed information about their operations and financial status to the market by issuing prospectuses and other means. (1. Raise a large amount of funds in a short period of time. 2. You can apply for listing on the exchange, which is conducive to enhancing stock liquidity and improving the credibility of the issuer)

Underwriting options include agency sales (no issuance risk, low commission) and underwriting (underwriter bears issuance risk, high commission)

An issuer sells securities directly to specific investors. Generally, a small number of investors who have close relationships with the issuer or manager are targeted.

Par issuance, premium issuance (market price issuance and mid-price issuance) and discount issuance

A market for centralized trading of stocks organized by a stock exchange.

Stock exchanges are divided into membership systems and corporate systems.

The membership system is a non-profit legal person established in the form of a membership association. Only brokers (who engage in buying and selling on behalf of clients and collect commissions) and traders (who directly engage in securities buying and selling, and whose income comes from the bid-ask spread) who have obtained exchange membership can conduct transactions on the exchange. The highest authority is the General Assembly.

The corporate system is a corporate legal person established with the purpose of profit and joint investment by various investors. It bears guarantee responsibility for securities transactions within the Exchange. Implement a model that separates operators and participants. The highest authority is the shareholders' meeting.

Securities trading markets other than exchanges. (Over-the-counter or over-the-counter market)

Unorganized, non-centralized and fixed trading place

The trading objects are mainly unlisted securities

You can entrust a securities firm as an agent, or you can trade directly with the securities firm. The transaction price of securities is generally determined by negotiation between the two parties.

A kind of negotiable security with circulation function.

Bill behavior refers to the laws and regulations that can create a relationship between creditor's rights and debts, and there are six types: bill issuance, acceptance, guarantee, acceptance, and guaranteed payment.

A credit note issued by the drawer that unconditionally agrees or requires others to pay a certain amount to the holder.

Completely valuable: the rights of the instrument are inseparable from the instrument. Possession of the instrument means possession of the value of the instrument.

Essential securities: the format is specified by law

No-cause securities: When the holder exercises his rights, he does not need to explain the reason for obtaining the note.

Negotiable securities: If a bill cannot be circulated, it cannot become a bill.

Wenyi Securities: The rights and obligations on the bill must be based on the written records on the bill.

Promissory note:

draft:

Cheque:

Real bills:

Financial instruments:

Definition: Securities in which the issuer promises to repay principal and interest on a specified date in accordance with legal procedures.

type:

Treasury bonds: (risk-free assets) debt certificates issued by the central government, specifically issued by the Ministry of Finance. They are sovereign bonds and have the highest credit rating.

Local government bonds:

Central Bank Notes:

Financial bonds are a type of securities issued by commercial banks and other financial institutions in order to adjust their liability structure and absorb relatively stable long-term funding sources.

Issuing financial bonds to raise funds is more stable and proactive than taking deposits

Financial bonds are issued through CCDC, traded in the inter-bank bond market, and held in custody at CCDC

Policy financial bonds:

Financial institution bonds:

Subordinated bonds: refers to a form of debt that has a higher order of repayment to creditors than the company's equity but lower than the company's general debt.

Regulators allow commercial banks to issue subordinated bonds and hybrid capital bonds as a supplementary source of capital

Hybrid capital instruments can and must be used to share a bank's losses without having to cease trading

Subordinated bonds can only be used to pay off the bank's losses when the bank is bankrupt and liquidated, and cannot be used to make up for the bank's daily operating losses.

Subordinated bonds only provide banks with a buffer period to improve their operating conditions and adjust their asset structure.

Credit bonds are bonds issued by entities other than the government and have agreed upon a certain cash flow for repayment of principal and interest.

Credit bonds have higher yields and higher credit risk

Corporate bonds:

Corporate bonds:

High Yield Bonds:

Corporate short-term financing bonds:

A bond whose repayment source is the cash flows generated by the pool of assets that back the security.

Including financial asset-backed securities and corporate asset-backed securities.

The principal payment time of asset-backed securities is unpredictable, and the debtor and the debtor of the underlying assets are often not the same economic entity.

Asset securitization: Assets that lack liquidity but have predictable income are sold to obtain financing by issuing securities in the capital market to maximize the liquidity of the assets.

Shareholders of common shares are the most basic shareholders of a joint-stock company

The rights owned by shareholders include: company decision-making rights, profit distribution rights, preemptive stock options, and remaining asset distribution rights.

While enjoying rights, you must also bear the company's operating losses.

When a company undergoes financial liquidation, common stockholders end up receiving the remaining property.

Preferred shares are shares that give investors certain priority rights when a company raises capital.

Priority rights mainly include: fixed dividends, which do not fluctuate with the company's performance and can receive dividends before ordinary shareholders.

When a company undergoes financial liquidation, preference shareholders have the right to claim the company's remaining property before common shareholders.

However, they generally do not participate in the company's dividend distribution, and shareholders do not have voting rights and cannot participate in the company's operation and management.

Stocks rated as non-investment grade (BB or below)

Companies with operating problems, newly listed high-tech companies, or stocks issued by companies with too much financial leverage

Domestic junk stocks mainly include the following three parts:

It refers to the stocks of companies with excellent performance and relatively stable returns.

Refers to long-term stable growth, large-scale, traditional industrial stocks and financial stocks.