The Financial System. Chapter 17. The financial system is the process by which money flows from savers to users. The Financial System. Financial System Savers Users Financial Institutions Financial Markets Savings is a function of many variables.
When a firm offers a stock for sale to the general public for the first time.
Secondary Market – collection of financial markets in which previously issued securities are traded among investors.Financial Markets
The Nasdaq Stock Market – the second largest stock market. Over 5,000 companies have their stocks listed on Nasdaq but many are smaller firms.
Other U.S. Stock Markets
The American Stock Exchange/AMEX
Regional Stock Exchanges
Foreign MarketsStock Exchanges
Millions of businesses and consumers now pay bills and receive payments electronically.
Most employees directly deposit employee paychecks.
Social security and other federal payments are made each year electronically.
Automated Teller Machines (ATMs) continue to grow in popularity.
More than 1/3 of American households use some online banking.Electronic Banking
85% of their loans are real estate loans
Credit unions are cooperative financial institutions that are owned by depositors/members.
Credit unions are created to serve consumers.
Insured by National Credit Union Administration (NCUA) which functions the same as the FDICSavings Banks and Credit Unions
Own federal reserve bank
District banks are run by a nine-member board of directors.
The board of governors is the governing body.
Federal Open Markets Committee (FOMC) sets most policies concerning monetary policy and interest rates.Organization of the Federal Reserve
Outline the structure and importance of the financial system.
List the various types of securities.
Define financial market, and distinguish between primary and secondary financial markets.
Describe the characteristics of the major stock exchanges.
Discuss the organization and functioning of financial institutions.
Explain the functions of the Federal Reserve System and the tools it uses to control the supply of money and credit.
Evaluate the major features of regulations and laws affecting the financial system.
Describe the global financial system.