...comments in the body of the paper and graded form at the end. It has been a pleasure having you in class. Best wishes. Abstract The constant advances of information systems and technology have led to the era of international expansion and globalization. This new age has brought about shrinking of theof the globe and tighter global communication. The emergence of this new revolution has changed and elevated the roles that financial institutions play in global functions and their importance. It has also increased their significance in managing risks. This paper intends to first define the roles of financial institutions and describe how they are applied to global financial operations. Then it will elucidate the significance of these institutions in managing risks. Defining International Financial Institutions Financial institutions are institutions that act as financial intermediaries and provide their members and customers with financial services and support. Like their counterparts, international financial institutions serve the same purpose, but are institutions by two or more countries and are subject to international laws (International Financial Institutions). Other functions of international financial institutions are stabilizing the exchange rate, regulating currency conversion, economic and social restructuring, and assisting countries in financial crisis. There are various types of international financial institutions that include Bretton Woods...
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...Financial Institutions and Financial Markets FIN/370 Financial Institutions and Financial Markets The state of the economy in the United States is very crucial to businesses and society. The success of the economy is reliant on financial institutions and financial markets. “The market for the creation and exchange of financial assets such as money, stocks, and bonds, plays a central role in organizing and coordinating our economy” (Colander, 2013, p. 643). Financial institutions are essential in providing funding for activities that take place within the financial markets. This paper will describe the roles of financial institutions and financial markets in our economy, as well as compare and discuss the differentiations between markets. The Roles of Financial Institutions Financial institutions play a vital role in the success of our economy and financial markets. They are responsible for financial transactions such as deposits, investments, and loans. Examples of financial institutions are commercial banks, investment banks, credit unions, insurance companies, mutual funds, and brokerages. A few of the well-known U.S. financial institutions are Bank of America, JP Morgan Chase Bank, Wachovia Bank, and Wells Fargo Bank. Financial institutions provide a means of savings for society and businesses. Saving money incurs interest, which allows people and businesses to save additional funds. Financial institutions provide loans so businesses can grow...
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...Development of Non Bank Financial Institutions to Strengthen the Financial System of Bangladesh - MONZUR HOSSAIN∗ -MD. SHAHIDUZZAMAN∗ Abstract Non-bank financial institutions (NBFIs) represent one of the most important parts of a financial system. In Bangladesh, NBFIs are new in the financial system as compared to banking financial institutions (BFIs). Starting from the IPDC in 1981, a total of 25 NBFIs are now working in the country. As on June 30, 2001 the total amount of paid up capital and reserve of 24 NBFIs stood Tk.6901.8 million (BB, 2002). The NBFIs sector in Bangladesh consisting primarily of the development financial institutions, leasing enterprises, investment companies, merchant bankers etc. The financing modes of the NBFIs are long term in nature. Traditionally our banking financial institutions are involved in term lending activities, which are mostly unfamiliar products for them. Inefficiency of BFIs in long-term loan management has already leaded an enormous volume of outstanding loan in our country. At this backdrop, in order to ensure flow of term loans and to meet the credit gap, NBFIs have immense importance in the economy. In addition, non-bank financial sector is important to increase the mobilization of term savings and for the sake of providing support services to the capital market. The focus of this paper is to highlight the necessity and importance of NBFIs to strengthen the financial system for rapid economic development of the country. 1. Introduction...
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...FINANCIAL MARKETS FIN 4040A 1. A financial market is the market for capital, a significant factor of production. The obligations created are in form of financial assets or financial instruments severally called securities. These assets are intangible and offer promises and claims by issuers and holders. A classification of the financial markets will greatly improve our mental constructs. CLASSIFICATION OF FINANCIAL MARKETS | | Type of classification |Specific operational terms | | |1 |Nature of claim |DEBT MARKETS | | | | | | | | | |EQUITY MARKETS | | |2 | |MONEY MARKET | | | | | | | | |Maturity of claim |CAPITAL MARKET | | |3 | ...
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...learnt by emerging markets from developed financial markets Name: Course: University: Tutor: Date: Abstract The present regarded industrialized countries are seen to be much enjoying the benefits that the economy is offering. The so called first world countries have continued to experience faster economic growth because of the influence of the stronger and well established both financial and security market. The research paper in it’s entirely, considers the lessons that the emerging financial markets from the developed and the developing can learn from the developed financial institutions. However, the basis of the paper is on U.S, England, Japan and then Germany. Introduction Traditional studies of the above mentioned four countries have continued to place some emphasis on the explanations concerning acceleration of the growth that have continued to occur within their economies. Most of the factors that are considered relate to increased productivity in labor, increased innovation in technologies, expansion in international relationship in trade and revolution n the financial infrastructures. All these occurrences preceded the present development within these countries. Economic historians continue to neglect the importance of the financial institutions, the paper through the studies of (Rousseau and Sylla 1999, p. 2), shows that there are still some lessons that the emerging nations and financial systems can learn from the impacts of both the financial and securities towards...
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...Understanding Financial Crises: Causes, Consequences, and Policy Responses Stijn Claessens, M. Ayhan Kose, Luc Laeven, and Fabián Valencia By now, the tectonic damage left by the global financial crisis of 2007-09 has been well documented. World per capita output, which typically expands by about 2.2 percent annually, contracted by 1.8 percent in 2009, the largest contraction the global economy experienced since World War II. During the crisis, markets around the world experienced colossal disruptions in asset and credit markets, massive erosions of wealth, and unprecedented numbers of bankruptcies. Five years after the crisis began, its lingering effects are still all too visible in advanced countries and emerging markets alike: the global recession left in its wake a worldwide increase of 30 million in the number of people unemployed. These are painful reminders of why there is a need to improve our understanding of financial crises. This book serves this purpose by bringing together a number of innovative studies on the causes and consequences of financial crises and policy responses to them. Although there is a rich literature on financial crises, there has been no publication since the recent financial crisis providing in one place a broad overview of this research and distilling its policy lessons. The book fills this critical gap. It covers a wide range of crises, including banking, balance-of-payments, and sovereign debt crises. It reviews the typical patterns prior to...
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...BANKING, AND FINANCIAL MARKETS Peter N. Ireland Department of Economics Boston College irelandp@bc.edu http://www2.bc.edu/~irelandp/ec261.html Chapter 2: An Overview of the Financial System 1. Function of Financial Markets and Financial Intermediaries 2. Structure of Financial Markets Debt and Equity Markets Primary and Secondary Markets Exchanges and Over-the-Counter Markets Money and Capital Markets 3. Financial Instruments Money Market Instruments Capital Market Instruments 4. Role of Financial Intermediaries Transaction Costs and Economies of Scale Risk Sharing and Diversification Adverse Selection and Moral Hazard 5. Types of Financial Intermediaries Depository Institutions (Banks) Contractual Savings Institutions Investment Intermediaries This chapter provides an overview of the financial system in the US economy by describing the various types of financial markets, financial instruments, and financial institutions or intermediaries that exist. 1 The chapter begins with a general statement that clarifies what function financial markets and financial intermediaries have in the economy as a whole. It then deals more specifically with: The structure of financial markets and the ways in which different types of financial markets can be distinguished. Here, it discusses debt versus equity markets, primary versus secondary markets, exchanges versus over-the-counter markets, and money versus capital markets. The various types of financial instruments, including both money market instruments...
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...ASSIGNMENT 2 FIN 350 WK 8 Assignment 2 - Financial Markets and Institutions, Part 2 Choose three (3) types of securities from any of the financial markets covered in the textbook during Weeks 1 through 7. Pick securities you would enjoy researching for this assignment. Write a five to six (5-6) page paper in which you: 1. Analyze the role financial markets play in creating economic wealth in the U.S. 2. Provide a general overview of each of the three (3) securities you chose. Be sure to include such information as name, company it represents (if applicable), pricing, and historical performance. 3. Assess the current risk return relationship of each of the three (3) securities. 4. Recommend one (1) strategy for maximizing return for the current risk return relationship identified for each of the three (3) securities. 5. Suggest how the Federal Reserve and its monetary policy affect each of the three (3) securities today. More Details hidden... Activity mode aims to provide quality study notes and tutorials to the students of FIN 350 WK 8 Assignment 2 in order to ace their studies. FIN 350 WK 8 ASSIGNMENT 2 To purchase this visit here: http://www.activitymode.com/product/fin-350-wk-8-assignment-2/ Contact us at: SUPPORT@ACTIVITYMODE.COM FIN 350 WK 8 ASSIGNMENT 2 FIN 350 WK 8 Assignment 2 - Financial Markets and Institutions, Part 2 Choose three (3) types of securities from any of the financial markets covered in the textbook during Weeks 1 through...
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...Introduction This essay mainly discussed the market for information, although this market is invisible, it plays an essential role in financial and banking industry. In part I, the essay will try to explain why the market will exist as well as why the different kinds of participates exist. The market for information is a complex market with a large number of chains and relations between information producers and information buyers. However, some chains and relations of the market are the core part for the market to function well. The essay will also discuss the “Chains of transacting and accountability” and “Networks of assurance”. However, in the process of information producing, there will be some difficulty in learning and knowledge creation. In part II, the essay will firstly introduce the ideal process of learning and knowledge production and secondly discuss the reason for the ineffectiveness of learning and knowledge creation processes. Based on the possible reasons of ineffectiveness, it will also give some suggestions on how to avoid the difficulties in the future. This essay is mainly based on John Holland’s two papers; therefore, in the end, the report will discuss some limitations of these two papers. I. Information production and assurance roles of participants in the ‘market for information’ What is the market for information and why does this market exist? Information markets are usually a place where individual knowledge is organized and aggregated...
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...AND FINANCIAL MARKETS Peter N. Ireland Department of Economics Boston College irelandp@bc.edu http://www2.bc.edu/~irelandp/ec261.html Chapter 2: An Overview of the Financial System 1. Function of Financial Markets and Financial Intermediaries 2. Structure of Financial Markets Debt and Equity Markets Primary and Secondary Markets Exchanges and Over-the-Counter Markets Money and Capital Markets 3. Financial Instruments Money Market Instruments Capital Market Instruments 4. Role of Financial Intermediaries Transaction Costs and Economies of Scale Risk Sharing and Diversification Adverse Selection and Moral Hazard 5. Types of Financial Intermediaries Depository Institutions (Banks) Contractual Savings Institutions Investment Intermediaries This chapter provides an overview of the financial system in the US economy by describing the various types of financial markets, financial instruments, and financial institutions or intermediaries that exist. 1 The chapter begins with a general statement that clarifies what function financial markets and financial intermediaries have in the economy as a whole. It then deals more specifically with: The structure of financial markets and the ways in which different types of financial markets can be distinguished. Here, it discusses debt versus equity markets, primary versus secondary markets, exchanges versus over-the-counter markets, and money versus capital markets. The various types of financial instruments, including both money market instruments...
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...An Overview of the Malaysian Banking Sector FINA0501 ASIAN FINANCIAL INSTITUTIONS TERM PAPER LEE JUNHONG, JEREMY 2010540826 I. Introduction Malaysia has been an important player in the Asian economy since the early days of independence, and even before that, as a British protectorate. It is currently the third largest economy in Southeast Asia, and is the 28th largest economy in the world in terms of purchasing power parity according to the World Bank. Malaysia has also successfully diversified its role by focusing her economy on both the traditional sphere of primary agricultural produce as well as being a hub for light manufacturing in consumer durables and electronics. Strong economic planning and farsighted vision by both the government and central bank has been instrumental in maintaining a strong growth rate of her economy; her combined year on year growth since independence in 1957 has averaged 6.6%, which is no doubt a stellar record and one of the highest in Asia. The financial institutions and their functions have been instrumental in this success, and this paper will strive to highlight the strengths and weaknesses, as well as a general overview of the Malaysian banking sector. I. Historical background The earliest beginnings of the banking sector in Malaysia dates back to the early 19th Century under British influence and the expatriate (mainly British) merchant communities. The Straits Settlements comprising of Singapore, Malacca and Penang were administered...
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...successful growth, though each of its policies made sense for particular countries at particular times. By the Washington consensus I mean, of course, the oversimplified rendition of what it was that the international financial institutions and the U.S. Treasury recommended, especially during the period of the eighties and early nineties, before they became such a subject of vilification in both the North and the South, not the more subtle work of John Williamson, who actually coined the term.2 Whatever, its original content and intent, the term “Washington Consensus”, in the minds of most people around the world, has come to refer to development strategies focusing around privatization, liberalization, and macro-stability (meaning mostly price stability); a set of policies predicated upon a strong faith – stronger than warranted --in unfettered markets and aimed at reducing, or even minimizing, the role of government.3 That development strategy stands in 1 Initiative for Policy Dialogue and university professor, Columbia University. The author would like to thank the Ford Foundation, the MacArthur Foundation, and the Mott Foundation for financial support. Research assistance from Megan Torau is also gratefully acknowledged. This is a slight revision of a paper presented at a conference sponsored by Foundation CIDOB and the Initiative for Policy Dialogue held in Barcelona in September 2004, “From the Washington Consensus towards a new Global Governance”. 2 Williamson, J. [1990]...
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...The Role of Financial Institutions & Risk Management in Subprime Crisis Vikrant Joshi The Role of Financial Institutions & Risk Management in The Subprime Crisis This paper discusses the role of financial institutions & their risk management strategies in the subprime mortgage crisis. The downturn in the housing and mortgage markets precipitated the first phase of the financial crisis in August 2007 when the solvency of a number of large financial firms was threatened by huge losses in complex structured financial securities. Why did these firms have such high concentrations in mortgage-related securities? Given the information available to firms at the time, these high concentrations in mortgage-related securities violated basic principles of modern risk management. Introduction: This paper analyzes the role of financial institutions in the light of risk management and corporate governance in the events leading to the subprime crisis. This paper explores the following question: Given the tremendous advances in financial risk measurement and management, why was the solvency of large and complex financial firms threatened by large losses in the mortgage market? First, the subprime mortgage market was about $1.3 trillion. Even a very high percentage loss in this market seemed manageable, given the overall size of U.S. and world debt markets. Commonly cited reasons such as high mortgage defaults in 2006 and 2007 do not provide a sufficient...
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...Working Paper Series: WP 0709 Non-Bank Financial Institutions in Bangladesh: An Analytical Review Md. Nehal Ahmed Mainul Islam Chowdhury March 2007 Policy Analysis Unit (PAU) Research Department, Bangladesh Bank Head Office, Dhaka, Bangladesh (www.bangladeshbank.org.bd) (www.bangladesh-bank.org) Policy Analysis Unit* (PAU) Working Paper Series: WP 0709 Non-Bank Financial Institutions in Bangladesh: An Analytical Review Md. Nehal Ahmed Mainul Islam Chowdhury Research Economist Policy Analysis Unit Research Department Bangladesh Bank March 2007 Copyright © 2007 by Bangladesh Bank * In an attempt to upgrade the capacity for research and policy analysis at Bangladesh Bank (BB), PAU prepares and publishes several Working Papers on macroeconomic research every quarter. These papers reflect research in progress, and as such comments are most welcome. It is anticipated that a majority of these papers will eventually be published in learned journals after the due review process. Neither the Board of Directors nor the management of BB or any agency of the Government of Bangladesh, however, necessarily endorses any or all of the views expressed in these Papers. The latter reflect views based on professional analysis carried out by the research staff of Bangladesh Bank, and hence the usual caveat as to the veracity of research reports applies. [An electronic version of this paper is available at www.bangladeshbank.org.bd] Non-Bank Financial Institutions...
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...Roles of International Financial Institutions Marcus Jenkins MGT448 January 10, 2011 Paul Bogert Introduction When listening to the latest television report concerning global business news or world economics, names of financial institutions such as World Bank, International Monetary Funds, and Asian Development Bank may be the center of some discussion. A major player on the global forefront, international financial institutions function much differently from local neighborhood banks. In this paper the author will define the roles of international financial institutions and explain the role international financial institutions play in global financing operations. Also the author describes how international financial institutions can help in managing risks. Defining International Financial Institutions “The international financial institutions (IFIs) are global institutions established to promote economic development and trade” (Arvanitakis, 2001). Governed by international law, these financial institutions are generally established by more than one country. Funded by taxpayers these institutions are also very influential. Each year these institutions lend billions of dollars to help fund economic development and projects in some of the poorer nations in the world. The most prominent example of international financial institutions is the World Bank and the International Monetary Fund (IMF). The World Bank and the International Monetary Fund were the first...
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