Evolution of Payments System

Evolution of Payments System - Evolution of Payments System...

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Evolution of Payments System until several hundred years ago, the payments system in all advanced countries was based on gold or silver then came the introduction of paper currency convertible into a quantity of gold or silver this was eventually replaced by fiat money not convertible into anything major drawbacks of currency are that it is easily stolen and costly to transport in large quantities the invention of checks; but checks take time to clear and are costly to process electronic payments Why Study Banks? 1. provide a link between those who want to save and those who want to invest 2. play a role in determining the quantity of money in the economy 3. source of financial innovation expanding the ways to invest savings Why Study Financial Markets? Financial markets are markets in which funds are transferred from those who have excess funds (savers, lenders) to those who have a shortage (investors, borrowers). bond market - determines interest rates
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This note was uploaded on 11/22/2011 for the course FIN FIN1100 taught by Professor Bradrifkin during the Fall '09 term at Broward College.

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Evolution of Payments System - Evolution of Payments System...

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