Text And Reference Material And Five Parts Of The Financial System-Money and Banking-Handouts, Lecture notes for Banking and Finance. Amity Business School
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aishwaryai6 August 2012

Text And Reference Material And Five Parts Of The Financial System-Money and Banking-Handouts, Lecture notes for Banking and Finance. Amity Business School

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This course covers following topics: money and the financial system, interest rate, financial institutions, central banks, monetary policy and financial stability, modern monetary economics. This lecture handout includes...
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Money & Banking – MGT411 VU Lesson 1

TEXT AND REFERENCE MATERIAL &

FIVE PARTS OF THE FINANCIAL SYSTEM

The Primary textbook for the course will be “Money, Banking and Financial Markets” by Stephan G. Cecchetti

International Edition, McGraw Hill Publishers, ISBN 0-07-111565-X” Reference books will be

“The Economics of Money, Banking and Financial Markets”, by Fredrick S. Mishkin 7th Edition Addison Wesley Longman Publishers

“Principles of Money, Banking and Financial Markets” by Lawrence S. Ritter, Willaim L. Silber and Gregory F. Udell, Addison Wesley Longman Publishers

Money and the Financial System Money and the Payments System

Course Contents

Financial Instruments, Financial Markets, and Financial Institutions Interest rate, financial instruments and financial markets Future Value, Present Value and Interest Rates Understanding Risk Bonds, Pricing and Determination of Interest Rates The Risk and Term Structure of Interest Rates Stocks, Stock Markets and Market Efficiency Financial Institutions Economics of Financial Intermediation Depositary Institutions: Banks and bank Management Financial Industry Structure Regulating the financial system Central Banks, Monetary Policy and Financial stability Structure of central banks Balance sheet and Money Supply process Monetary policy Exchange rate policy Modern Monetary Economics Money growth and Money Demand Aggregate demand Business Cycle Output and inflation in the short run Money and Banking in Islam Monetary and financial policy and structure for an Interest-free economy Islamic Banking in the contemporary world

Money Financial Instruments Financial Markets Financial Institutions Central Banks

Five Parts of the Financial System

1. Money

To pay for purchases To store wealth Evolved from gold and silver coins to paper money to today’s electronic funds transfers

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Money & Banking – MGT411 VU Traditional Paycheck system vs. ATM Withdrawals and Mailed transactions vs. E-banking

2. Financial Instruments

To transfer wealth from savers to borrowers To transfer risk to those best equipped to bear it. Once investing was an activity reserved for the wealthy Costly individual stock transactions through stockbrokers Information collection was not so easy Now, small investors have the opportunity to purchase shares in “mutual funds.”

3. Financial Markets

To buy and sell financial instruments quickly and cheaply Evolved from coffeehouses to trading places (Stock exchanges) to electronic networks Transactions are much more cheaper now Markets offer a broader array of financial instruments than were available even 50 years ago

4. Financial Institutions

Provide access to financial markets Banks evolved from Vaults and developed into deposits- and loans-agency Today’s banks are more like financial supermarkets offering a huge assortment of financial

products and services for sale. Access to financial markets Insurance Home- and car-loans Consumer credit Investment advice

5. Central Banks

Monitors financial Institutions Stabilizes the Economy Initiated by Monarchs to finance the wars The govt. treasuries have evolved into the modern central bank Control the availability of money and credit in such a way as to ensure Low inflation, High growth, and The stability of the financial system State Bank of Pakistan www.sbp.org.pk

Five Parts of the Financial System Money Financial Instruments Financial Markets Financial Institutions Central Banks

Summary

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