Outline 1 - Professor Akacem Money and Banking Unit One...

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Professor Akacem Money and Banking Unit One: Outline 1 Definitions, Role of Money, Financial Markets and Financial Intermediation Chapter 1, 2 and 3 I. Introduction: a. Overview of the issues in the money and banking field b. Where the U.S. banking system stands vis a vis the rest of the world II. Overview of basic Macro-economic concepts: a. Review of : GDP b. Real vs Nominal variables c. GDP deflator or Aggregate price level d. (Nominal GDP/Real GDP) III. Importance of Money: a. Need to define what money is b. Money and the Economy c. Money and Inflation d. Need to control Money IV. Functions of Money: a. Medium of Exchange b. Unit of Account c. Store of Value V. Different Definitions of Money: a. M1, M2...(see Federal Reserve Bank of New York , "Understanding All the M's in Monetary Policy", 1994. b. Concept of Liquidity c. Monetary Base (High Powered Money) VI. Role of Banks: Financial intermediation: a. Banks as Financial intermediaries b. Financial Dis-intermediation VII. Money and the Economy: a. Money growth and business cycles VIII. Money and Interest Rates a. Reserve vs Interest Rate Targeting b. Budget deficits, Interest Rates and Monetary Policy IX. Debt, Equity Markets and Foreign Exchange Mkts: a. Debt Markets: Bonds (Primary vs Secondary Mkts) b. Equity " " : Stocks c. Foreign Exchange Mkt and Impact on (X-M)
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Professor Akacem Unit One: Outline One Introduction, Financial Markets and Financial Intermediation I. Introduction: II. Overview of Macro-Economic Concepts III. Importance of Money IV. Functions of Money V. Definitions of Money VI. Financial Intermediation VII. Money and the Economy VIII. Money and Interest Rates IX. Debt, Equity Markets and Foreign Exchange I. Introduction: a. Overview of the issues in the money and banking field: If you look at The Wall Street Journal , today's issue (June 3rd, 1998, pp: A:20), you see that there is an ongoing turf battle between the US treasury and the Federal Reserve in terms of who should control what and how to reform the US banking system. Throughout the course, we will be talking about issues that deal with the role of banks in the US economy but will also address the issue of separation of banking and commerce (that is commercial banking vs investment banking and the future of Glass Steagall). Throughout 1998, we have seen a number of bank mergers that could redefine the banking landscape in the US. Competition both here in the US and overseas is heating up and US banks are gearing themselves to regain some of the lost ground. In the late 1960's the top banks (at least 10) were US, were as now, US banks rank in the 20 to 30 range. b. Where US banking stands: The US banking system differ from other countries in a number of ways. First, the US banking system is a dual banking system . By that we mean a system that has state banks and national banks co-existing side by side. This represents a major difference when it comes to the regulatory authority that overseas these different types of banks.
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