Lecture notes
Full Lecture Notes
- Institution
- The University Of Manchester (UOM)
Complete set of lecture notes for the Financial Markets and Institutions (BMAMN21011) at The University of Manchester
[Show more]
1 review
By: yovensoobrayen • 6 year ago
Content preview
Lecture NotesFinancial Markets and Institutions Lecture Notes
Lecture 1 - The Financial System
• Evolution of the Financial System
- Simplest form of economy - barter economy (swapping goods for other
goods)
• Wants do not always coincide (and therefore you cannot swap) -
double coincidence of wants is rare
• There is need for a ‘common medium of exchange’ - which has value
- stones, precious metals (gold etc.), paper money, digital money
• The Role of the Financial System
- The collection of markets and intermediaries for financial claims, individuals
and institutions who issue, buy and trade the financial claims. And regulators
who monitor the system
• Two main roles :
- An intermediary between deficit and surplus agents (channels funds to
agents with highest productivity and low costs)
- A payment mechanism
- Cheques, online payments, debit / credit card
- Overseas payments (with security), LC (Letter of Credit)
• Participants of the Financial System
- Primary lenders and ultimate borrowers
- Individuals and organisations that need financial services
- Financial Institutions
- Regulators
1
, Lecture Notes
• Global financial centres
- Factors for judging the quality of a financial centre
• People
• Business Environment
• Infrastructure
• General Competitiveness
- E.g. London, New York, HK, Singapore
2
, Lecture Notes
Lecture 2 - Financial Claims
What is a Financial Claim?
A claim to the ownership of a series of future cash inflows
• Also called a financial assets, security or instrument
• Opposite of a financial liability (obligation to pay a series of future cash flows)
Who hold financial claims? Who has the financial liabilities?
• Bank loans - banks hold the claims
• Government bonds (guilts) - bond holders hold financial claims, government hold
financial liabilities
• Company stocks and shares - financial claim owned by the share holder, has the
right to dividends (future cash inflow)
• Innovative financial products (mortgage backed securities etc.)
Total financial assets = total financial liabilities (in a closed economy)
UK is a net investor and open economy (UK companies and households invest a lot in
overseas assets and companies)
Characteristics of Financial Claims
• Risk and expected return
• Real value certainty
• Liquidity
• Term to maturity
• Currency denomination
3
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller brandij. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £9.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
48072 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy revision notes and other study material for 15 years now