Professional Documents
Culture Documents
Chapter One
Introduction
McGraw-Hill /Irwin
McGraw-Hill /Irwin
Overview of Financial Markets Primary Markets versus Secondary Primary Markets versus Secondary Markets Markets Money Markets versus Capital Markets Money Markets versus Capital Markets Foreign Exchange Markets Foreign Exchange Markets
McGraw-Hill /Irwin
Corp. stocks Comm/farm mort. Treas. Sec. U.S. gov owned agencies Bank and consumer loans
McGraw-Hill /Irwin
Overview of Financial Institutions Institutions that perform the essential Institutions that perform the essential function of channeling funds from those function of channeling funds from those with surplus funds to those with shortages with surplus funds to those with shortages of funds (e.g. banks, thrifts, insurance of funds (e.g. banks, thrifts, insurance companies, securities firms and companies, securities firms and investment banks, finance companies, investment banks, finance companies, mutual funds, pension funds) mutual funds, pension funds)
McGraw-Hill /Irwin
McGraw-Hill /Irwin
McGraw-Hill /Irwin
Types of FIs
Commercial banks Commercial banks depository institutions whose major assets are depository institutions whose major assets are loans and major liabilities are deposits loans and major liabilities are deposits Thrifts Thrifts depository institutions in the form of savings depository institutions in the form of savings and loans, credit unions and loans, credit unions Insurance companies Insurance companies financial institutions that protect individuals financial institutions that protect individuals and corporations from adverse events and corporations from adverse events
(continued)
McGraw-Hill /Irwin
Securities firms and investment banks Securities firms and investment banks financial institutions that underwrite securities financial institutions that underwrite securities and engage in securities brokerage and trading and engage in securities brokerage and trading Finance companies Finance companies financial institutions that make loans to financial institutions that make loans to individuals and businesses individuals and businesses Mutual Funds Mutual Funds financial institutions that pool financial financial institutions that pool financial resources and invest in diversified portfolios resources and invest in diversified portfolios Pension Funds Pension Funds financial institutions that offer savings plans for financial institutions that offer savings plans for retirement retirement
McGraw-Hill /Irwin
McGraw-Hill /Irwin
Regulation of Financial Institutions FIs provide vital financial services to all FIs provide vital financial services to all sectors of the economy; therefore, their sectors of the economy; therefore, their regulation is in the public interest regulation is in the public interest In an attempt to prevent their failure and In an attempt to prevent their failure and the failure of financial markets overall the failure of financial markets overall
McGraw-Hill /Irwin