lecture_21_financial_institutions

lecture_21_financial_institutions - MA826 Financial...

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MA826 Financial Institutions
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Financial Institutions WHAT WE ARE GOING TO COVER Central Banks - Government Agencies  Bank of England; Debt Management Office Stock Exchanges Securities; markets; roles Institutional Investors Discount houses; investment banks; clearing banks;  building societies; investment trusts; unit trusts;  investment management companies; self-administered  pension funds; life insurance companies; general  insurance companies
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Central Banks – Government Agencies Bank of England What are 7 functions of the Bank of  England?
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Central Banks – Government Agencies Bank of England The Bank of England is the UK’s central bank It carries out government policy, as an agent of the UK government It issues bank notes It sets official interest rates (only since 1997) and implements  through control of money supply and by interaction with the  investment markets It acts as the lender of last resort It acts as the bankers’ bank, providing settlement systems (settling  money daily between the clearing banks) it maintains the UK’s foreign reserves, using them to influence  exchange rates It provides information to the investment markets  (http://www.bankofengland.co.uk)
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Central Banks – Government Agencies Debt Management Office What are 4 functions of the Debt  Management Office?
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Central Banks – Government Agencies Debt Management Office The Debt Management Office is part of the Treasury Issues Treasury bills in a weekly auction – used to cover  government’s S-T funding needs Raises money for the government by issuing new gilt-edged  securities (‘gilts’) (£26bn in 2002/3; £220bn in 2009/10) Buys gilts in run-up to maturity, rather than repay all at maturity, to  manage borrowing requirements more efficiently Monitors GEMMS (Gilt-Edged Market Makers)
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Stock Exchanges What are 8 functions of the London Stock  Exchange?
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London Stock Exchange Raises new long-term finance for companies and governments  (‘primary’ or ‘new issues’ market) Provides a secondary market for investors Brings together lenders and borrowers  (the main lenders are:  pension funds; life insurance companies; individuals; general  insurance companies; unit trusts; investment trusts) Runs 4 markets  (gilt-edged market; UK fully listed securities;  alternative investment market (AIM); overseas securities) Operates two dealing systems  (SEAQ; SETS) Ensures orderly conduct of business with investors protected
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This note was uploaded on 06/07/2011 for the course MA 826 taught by Professor Loba,millet during the Spring '11 term at Kent Uni..

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lecture_21_financial_institutions - MA826 Financial...

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