30 PA R T I Introduction FINANCIAL NEWS Foreign Stock Market Indexes Foreign stock market indexes are published daily in the financial pages of newspapers and on the web The entries from Bloomberg, shown here, are explained in the text The first column identifies the market index: for example, the shaded entry for the S&P/TSX Composite Index The second column, Value, gives the closing value of the index, which was 11 508.53 for the S&P/TSX Composite on December 7, 2009 The Change column indicates the change in the index, 2.27 The % Change column indicates the percentage change in the index, 0.02% WORLD INDEXES NORTH/LATIN AMERICA Index Dow Jones Industrial Average S&P 500 Index NASDAQ Composite Index S&P/TSX Composite Index Mexico Bolsa Index Brazil Bovespa Stock Index EUROPE/AFRICA/MIDDLE EAST Index DJ Euro Stoxx 50 C Pr FTSE 100 Index CAC 40 Index DAX Index IBEX 35 Index FTSE MIB Index AEX-Index OMX Stockholm 30 Index Swiss Market Index ASIA PACIFIC Index Nikkei 225 Hang Seng Index S&P/ASX 200 Index Value Change 10 409.38 106.86 194.04 11 508.53 32 111.59 68 102.76 20.48 0.88 0.31 2.27 6.20 499.23 Value Change 900.71 321.87 844.65 793.66 12 027.90 22 839.62 321.14 966.98 476.82 9.62 0.49 1.97 23.99 4.30 86.41 0.01 0.01 24.34 Value Change 10 167.60 22 324.96 676.50 145.01 173.19 25.70 % Change 0.20 0.08 0.01 0.02 0.02 0.74 % Change 0.33 0.01 0.05 0.41 0.04 0.38 0.00 0.00 0.37 % Change 1.45 0.77 0.55 Source: Reprinted from Bloomberg.com with permission on December 7, 2009 The process of indirect finance using financial intermediaries, called financial intermediation, is the primary route for moving funds from lenders to borrowers Indeed, although the media focus much of their attention on securities markets, particularly the stock market, financial intermediaries are a far more important source of financing for corporations than securities markets are This is true not only for Canada but for other industrialized countries as well (see the Global box, The Importance of Financial Intermediaries to Securities Markets: An International Comparison) Why are financial intermediaries and indirect finance so important in financial markets? To answer this question, we need to understand the role of transaction costs, risk sharing, and information costs in financial markets