An Introduction to Global Financial Markets

Seventh edition

by Stephen Valdez and Phillip Molyneux

Preface

What started off as what we expected to be a modest update on the 2010 text has become a major revision. It is hard to believe that so much has happened in global financial markets since 2010! And that the book reviewers have so many great suggestions. The main areas where there have been changes are as follows. Chapter 3's discussion on monetary policy has been substantially extended with coverage of the recent quantitative easing in the U.S., UK and Europe. There is a new Chapter 6 on Regulation that covers issues around dealing with systemic risk as well as insights into the 2010 U.S Dodd-Frank Act; U.K Vickers Commission Report, EU initiatives as well as Basel 3. Especial thanks go to John Thornton for providing valuable analysis and information for this new chapter. Chapter 12 on European Economic and Monetary Union is substantially extended to deal with the Eurozone sovereign debt crisis. Chapter 8 has a new section covering the efficient market hypothesis and its limitations with discussion of behavioural finance issues. Chapter 16 is extended to cover emerging and growth leading economies (EAGLES) as well as China and India. Chapter 17 is also revised to cover a variety of new topical issues including: social, environmental, ethical and trust (SEET) issues impacting the financial sector; alternative energy investments; and the impact of financial sector consolidation.

Throughout the text we have done our best to update tables, figures and commentary relating to changes over the last few years. A big thanks to Dr Jo Wells for checking through our discussion of derivatives products in Chapter 12 to 14 and for the excellent insights provided.

For the first time we have included revision questions at the end of every chapter and also offer a brief summary of the content of the suggested readings. This should help give students a good guide to the readings provided.

We very much hope you enjoy the new substantially revised and updated text and hope it helps you obtain a contemporary insight into the key features of trends and developments in global financial markets.

Philip Molyneux