Financial Institutions, Markets, & Money, 10 Edition: Power Point Slides For
Financial Institutions, Markets, & Money, 10 Edition: Power Point Slides For
Financial Institutions, Markets, & Money, 10 Edition: Power Point Slides For
5
Economic units with financial needs: Households, Businesses,
Governments.
Commercial Banking
Insurance
Commercial Banks
Economies of scale
Transaction cost control
Risk management expertise
Commercial Banks
Thrift Institutions
Savings & Loan Associations
Savings Banks
Credit Unions
Commercial Banks
Pension Funds
Life Insurance Companies insure against lost income at death.
Federal Agencies—
Issue “agency securities” backed by government
and lend at sub-market rates for favored social
purposes
Exhibit 1.2—Major Financial Intermediaries
Exhibit 1.3—
Major Financial Intermediaries: Sources & Uses of Funds
Financial Markets are classified in several ways.
Treasury Bills
Negotiable Certificates of Deposit
Commercial Paper
Federal Funds (“Fed Funds”)
Exhibit 1.4—Major Money Market Instruments
Money Market Balance Sheet Position of Major Participants
INVESTMENT
FEDERAL BANKS,
COMMERCIAL RESERVE TREASURY DEALERS,
BANKS SYSTEM DEPARTMENT AND BROKERS CORPORATIONS
INSTRUMENT A L A L A L A L A L
Treasury bills
Agency securities
Negotiable CDs
Commercial paper
Banker’s acceptances
Federal Funds
Repurchase agreements
Capital Markets
Common stock
Corporate bonds
Municipal bonds
Mortgages
Exhibit 1.5—Major Capital Market Instruments
Efficiency in financial markets