Professional Documents
Culture Documents
Chapter Outline
What Is Money? The Financial System The Reserve System The Changing Money and Banking System International Banking and Finance
What is Money?
Any object that is portable, divisible, durable and stable and that serves as a medium of exchange, a store of value and a unit of account
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What is Money?
Characteristics of Functions of Money Money
Portability Divisibility Durability Stability Medium of Exchange Store of Value Unit of Account
Financial Institutions
Commercial banks are companies that accept deposits that they use to make loans and earn profits Diversification and Mergers Commercial Interest Rates Prime Rate Savings and loan associations (S&Ls) accept deposits and make loans Mutual Savings Banks and Credit Unions Nondeposit Institutions
Pension Funds Insurance Companies Finance Companies Securities Dealers
45 Commercial banks
04 Discount Houses
16 Investment Banks
04 Housing Finance Companies 02 Venture Capital Companies 32 Leasing Companies 46 Modarbas 39 Mutual Funds
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Member Banks
All chartered commercial banks are members of the state bank of Pakistan.
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Discount rate is the interest rate at which member banks can borrow money from the State Bank Reserve.
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Selective credit controls is the state banks Reserve authority to set both margin requirements for consumer stock purchases and credit rules for other consumer purchases
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U.N. agency consisting of about 150 nations that have combined resources to promote stable exchange rates, provide temporary short-term loans and serve other purposes
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