L-2 Capital Markets

L-2 Capital Markets - CA(IBFS-2 L-2 Capital Markets(CMs A...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
CA(IBFS-2) L-2: Capital Markets (CMs) A. Financial Systems (FS) : (i) Def. of FS : It is a composition of various institutions, markets, regulations, laws, practices, money managers, analysts, transactions, claims, and liabilities. It functions as an intermediary (or a channel) and facilitates flow of funds from surplus to deficit units or, say, from the Savers to the Borrowers. FS helps in determining both cost and volume of credit. It affects consumption, production, employment, and thus the overall economy itself. (ii) Role and Functions of FS : 1. Savings Function : It involves mobilization of savings to provide a profitable and low risk outlet. (Savings, Investments, Living Standards). 2. Policy Function : It ensures a smooth flow of funds from savings to investments to stabilize economy (e. g. RBI policies, Financial Claims, etc). 3. Credit Function : It ensures transformation of savings into credit for investment and spending purposes. 4. Payment Function : It facilitates payment of funds through cheques, credit cards and various other money transfer methods. 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
5. Risk Function : Financial Markets provide risk mitigating instruments (e.g. Insurance, Hedging, etc). 6. Liquidity Function : Financial Markets provide liquidity for various purposes. (iii) Financial Structure : The financial structure of a financial system is given below:- Financial Markets Savers/Lenders Investors/Borrowers (Households, Firms, (Households, Firms, Govt., Foreigners) Govt., Foreigners) Financial Intermediaries 2
Background image of page 2
4. Constitution of Financial System : Financial Services Financial Markets Financial Instruments Financial Institutions Leasing Hire- Purchase Investment Banking Commercial Banking Insurance Credit Rating Bill Discounting Stock Broking Mutual Funds Housing Finance Factoring Primary : - Capital Markets - Money Markets Secondary : - Capital Markets - Money Markets Primary : -Short
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/28/2011 for the course FIN 315 taught by Professor Welker during the Spring '09 term at IUP.

Page1 / 10

L-2 Capital Markets - CA(IBFS-2 L-2 Capital Markets(CMs A...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online