Banking and Financial Institutions

Apuntes

Banking and Financial Institutions Overview 1 / 39 The Financial System 2 / 39 Financial instruments (funds) Financial assets and liabilities (more on this later) ▶ Shares (Equity) ▶ Bonds ▶ Deposits ▶ Loans ▶ Insurance/pension claims ▶ Derivatives ▶ Currency ▶ ... 3 / 39 The Spanish Financial System 4 / 39 Sectors Lender-Savers and Borrower-Spenders ▶ Households ▶ Government ▶ Foreigners ▶ Business firms ▶ Financial intermediaries 5 / 39 Which sector is this? Data from Spanish Financial Accounts 6 / 39 Which sector is this? Data from Spanish Financial Accounts 7 / 39 Which sector is this? Data from Spanish Financial Accounts 8 / 39 Which sector is this? Data from Spanish Financial Accounts 9 / 39 Which sector is this? Data from Spanish Financial Accounts 10 / 39 The Financial System 11 / 39 Direct Finance ▶ Borrowers and lenders interact on financial markets ▶ Funds are exchanged in form of financial securities ▶ Claim on future income or assets ▶ Claim is an asset for the buyer, liability for the seller ▶ Advantages: ▶ Allocation of capital ▶ Allocation of risk ▶ Consumption smoothing ▶ Today: very short review of important aspects for this course ▶ Details: review y...