1) Intro

Question 1

Medium of Exchange,
properties?

Answer 1

1) Sufficient in quantity,
2) Acceptable to all parties in all transactions,
3) Divisible into small units,
4) Portable🚶🏽‍♀️

Question 2

What are the 4️⃣ main reasons why individuals and companies need financial intermediation?

Answer 2

4 elements:
1) geographic location 🌎
2) aggregation 💰 💸
3) maturity transformation ⏰️
4) risk transformation

Question 3

Percentage of liabilities that building society is permitted to raise funds on?

Answer 3

50%

Question 4

Libor

Answer 4

The rate of interest charged in the interbank market. Primarily London interbank offered rate.

Sonia introduced 1997 following Libor scandal, administered by the Bank of England 🏛 🏦

Question 5

Interbank

Answer 5

Large market 🌐 recycles surplus cash held by banks. Directly through banks or by specialist money brokers.

Question 6

Key differences between mutual and proprietary organisation?

Answer 6

Most proprietary organisations are limited companies with shareholders who have a right to dividends.
Mutual has no shareholders. Comman are building societies and credit unions.