Role of FM - (1)

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  • Created by: eleni
  • Created on: 23-04-17 13:20
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  • Role of FM - (1)
    • Role and function
      • Bring savers and borrowers togethe r - surplus - deficit sectors
        • savers and borrowers: households, fims, gov
          • = interest
            • FM = mk where ***ets and sec sold/bought
              • funds = trf in FM when 1 agents but fin *** held by another
                • inv get opps to put their savingsto work
                  • FM = eco devel
                    • ***ets/sec=claim on issuing firm
                      • Debt sec=borrowed/credit
                        • Equity sec=common stocks/ownership on firm
                    • role = accom needs of corp sec
                      • route that firms can get funds from inv
                        • fin inst = banks = intermediaries = connect firms inv acti --> corp fin
          • by facilitating exch of: loans/bonds/stocks
            • min trans costs
              • red: credit risk for b+s
                • red info ***ym
        • Mk for  FSer = productmk in fin
          • mk for sec = exchange mk in fin
      • FS= services: risk sharing, liquidity, info
        • Match S+B providing these services through:
          • FM
          • Fin Inst
    • Mk for Gov Sec
    • Money mk
      • ST DEBT SEC
        • DSec->**ec
          • Banks acceptance
            • treat bills, commerce paper
    • Cap mk
      • Money mk
        • ST DEBT SEC
          • DSec->**ec
            • Banks acceptance
              • treat bills, commerce paper
      • LT SEC  DS>**
        • Bonds
        • Mortages (+M backedsec)
          • Bonds
        • Stocks
          • Mortages (+M backedsec)
      • Mk for Derivatives
        • = f instruments = risk man markets in fin
      • Risk and Ex return
      • R and 2nd Mk
      • Role of price disc
      • FM Efficiency
      • Role of F Institutions
      • Comp FS

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