PURPOSE AND STRUCTURE OF TEXT In the preface to the first edition published in 1994, we wrote that the prior 30 years 'glad been a time of profound, indeed revolutionary, change in the financial markets and institutions of the world. The hallmarks of that change were innovation, globalization, and deregulation. Since 1994, those forces have actually gathered more strength, and the financial landscape continues to undergo large and visible changes around the globe. The discipline that we know as finance has attracted the talents and energies of people from Chicago to Singapore and from Paris to Bombay. Our purpose in writing this book is to instruct students about this fascinating revolution. We describe the wide array of financial securities that are now available for investing, funding operations, and controlling various types of financial risk. We help the students to see each kind of security as a response to the needs of borrowers, lenders, and investors, who manage assets and liabilities in a world of constantly changing interest rates, asset prices, regulatory constraints, and international competition and opportunities. Our book devotes a considerable amount of space to explaining how the world's key financial institutions manage their assets and liabilities and how innovative instruments support that management. Also, the text gives students a thorough introduction to financial regulation and to major facets of international finance. It is a safe bet that change will mark the discipline of finance over the foreseeable future and will produce new kinds of institutions, markets, and securities. Our extensive explanation of the developments that dominate today's financial scene provides students with the sense of institutional structure and the analytical tools that they will need to understand the innovations that will surely occur throughout their careers. Our coverage of institutions, investors, and instruments is as current and up-to-date as we can produce in the face of frequent and significant change both in the United States and around the world. We have made a major effort to get the latest information and data on the players in the global financial game and the rules by which it is played. We think our focus on the actual practices of financial institutions is particularly beneficial to students who will, as noted above, inevitably have to respond to changes in those institutions and their environment. We believe that our book differs in several key respects from many texts on financial institutions and markets. What follows is an outline of the key differences. The first difference, and a special feature of this text, is its lengthy coverage of the securitization of assets and the large mortgage market (both residential and commercial). Securitization is the process by which a security, whose collateral is the cash flow from a pool of individually illiquid and often small assets, is created and sold-in the capital markets. Asset securitization has been a major innovation of the past 20 years and represents a radical departure from the traditional system for financing needs by manufacturing companies, finance companies, and governments throughout the world. The mortgage-backed security is the prime example of this process and accounts for the largest part of the market for securitized assets. However, the issuance of securitized pools of credit card debt, auto loans, other consumer liabilities, and receivables from intellectual property is becoming a very important part of international financial markets. The text devotes a considerable amount of time to securitized assets and their markets and offers chapters on mortgage loan securitization as well as the securitization of other assets. The second difference is our commitment to giving the students a substantial amount of information and analysis regarding international or global topics in finance. Our discussions rFabozzi, Frank J. is the author of 'Foundations of Financial Markets and Institutions', published 2001 under ISBN 9780130180797 and ISBN 0130180793.