Lecture 1 Chpt 1&2 bb-2

Lecture 1 Chpt 1&2 bb-2 - Fin 320 Chapter 1: An...

Info iconThis preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon
Fin 320 Chapter 1: An Introduction to Money and the Financial System Chapter 2: Money and the Payments System Lecture 1 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
Six Parts of the Financial System 1. Money 2. Financial Instruments 3. Financial Markets 4. Financial Institutions 5. Regulatory Agencies 6. Central Banks 2
Background image of page 2
Six Parts of the Financial System 1. Money Has changed from gold/silver coins to paper currency to electronic funds Cash can be obtained from an ATM any where in the world. Bills are paid and transactions are checked online. 3
Background image of page 3

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

View Full DocumentRight Arrow Icon
Six Parts of the Financial System 2. Financial instruments Buying and selling individuals stocks used to be only for the wealthy. Today we have mutual funds and other stocks available through banks or online. Putting together a portfolio is open to everyone. 4
Background image of page 4
Six Parts of the Financial System 3. Financial Markets Once located in coffeehouses and taverns. Then organized markets were created, like the New York Stock Exchange. Now mostly handled by electronic markets. Much broader array of financial instruments. 5
Background image of page 5

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

View Full DocumentRight Arrow Icon
Six Parts of the Financial System 4. Financial Institutions Banks began as vaults, developed into institutions, to today’s financial supermarket. Offer a huge assortment of financial products and services. 6
Background image of page 6
Six Parts of the Financial System 5. Government regulatory agencies Introduced by federal government after the Great Depression. Provide wide-ranging financial regulation A government examiner looks at the systems a bank uses to manage its risk The 2007-2009 financial crises has led governments to consider greater regulation. 7
Background image of page 7

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

View Full DocumentRight Arrow Icon
Six Parts of the Financial System 6. Central banks Began as large private banks to finance wars. Control the availability of money and credit to ensure low inflation, high growth and stability of financial system. Today’s policymakers strive for transparency in their operations. 8
Background image of page 8
Five Core Principles of Money and Banking 1. Time has value 2. Risk requires compensation 3. Information is the basis for decisions 4. Markets determine prices and allocation resources 5. Stability improves welfare You will be asked to apply the core principles to different topics 9
Background image of page 9

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

View Full DocumentRight Arrow Icon
has Value 1. Time affects the value of financial transactions. 2. Interest payments exist because
Background image of page 10
Image of page 11
This is the end of the preview. Sign up to access the rest of the document.

This document was uploaded on 10/26/2011 for the course FIN 320 at DePaul.

Page1 / 44

Lecture 1 Chpt 1&2 bb-2 - Fin 320 Chapter 1: An...

This preview shows document pages 1 - 11. Sign up to view the full document.

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