Chapter 1 Flashcards
refers to the whole gamut of market dealings with financial assets
Financial system
it is where the lenders and borrowers of funds meet to finance their needs and satisfy their objectives.
Financial System
the lenders can be
individuals
businesses
institutions
government
the borrowers can be
individuals
businesses
institutions
government
when the lenders and borrowers meet, the lenders transform their fudns into
financial assets
the borrowers receive the funds as their?
financial liabilities
like any other commodity, has a price.
Money
brings together the borrowers and lenders of funds
intermediation process
is the most common form of financial intermediation in the financial system
Banking system
type of financial markets
Money market
Capital Market
types of institutions
banking institution
non-bank financial intermediaries
non-bank thrift institutions
components of banking institutions
universal banks
commercial banks
thrift banks
rural banks
specialized government banks
Components of non-bank financial intermediaries
investment houses
financing companies
securities dealers/ brokers
investment companies
insurance companies
lending investors
pawnshops
Government non- bank financial institutions
venture capital corporations
non-bank thrift institutions
mutual building & loan associations
non stock savings & loans
is responsible for implementing the monetary policy and regulation of the banking system.
Bangko sentral ng pilipinas
supervises the operations of the insurance companies
insurance commission
works with the bsp and IC in supervising and regulating the activities of the financial institutions in the country
Securities and exchange commission
are expanded commercial bans capitalized at 5 billion or more
Universal Banks
Are banks with a minimum capitalization of 2.8 billion
Commercial Banks
Are banks with a minimum capitalization of 325 million for those whose head office is within metro manila, and php 25 million otherwise.
Thrift or savings bank
are normally operatign in the sector with minimum capitalization of 3.2 million. but those in metro manila needs minimum capitalization of 32 million
Rural Banks
Are government owned and controlled corporations engaged in specialized lending
Specialized government banks
are involved in underwriting of securities, financial consultancy
Investment houses
lend to business firms and individuals using equity capital and long-term borrowed funds
financing companies
sell its own securities to the public and invest the proceeds in stocks and bonds
Investment Companies
are engaged in property -liability, life insurance.
Insurance Companies
are involved in the buying and selling of securities and have a minimum capital of php 30 million
Securities Dealers
cater to the financial requirements of smaller firms
lending investors
provide immediate cash relief to the individual customers but charge higher rates than most banks
Pawnshops
are companies catering to a niche market.
mutual building and loan associations and no-stock and loans associations
the financial system can now be subdivided into 4 major markets
Money market
capital Market
Foreign exchange market
derivatives market
is a segment of the financial market with dealings in short term maturities of financial contracts
Money market
most money market are
fixed income debt instrumetns
is a segment of the financial market with dealings in maturities beyond 1 year.
Capital Market
types of capital market
primary
secondary
The form of financial instruments in the capital market can be
classified as
debt
equity
refers to the issuance of new securities representing an actual transfer of funds
Primary markets
Primary markets refers to the issuance of new securities
representing an actual transfer of funds from the investor to the issuing entity commonly called
Initial Public Offering
refers to the trading of securities providing a liquidity mechanism
Secondary Market
the secondary market can be
Organized Market
Over the counter maret
is a financial obligation that
has to be repaid with interest.
Debt
is a form of ownership in an enterprise and does not have to be repaid.
Equity
are debts of private corporations which carry interest repayments
Commercial Papers
has an inferior claim to a financial asset of debts, preferred shares among otehrs
equity ownership
refers to the market dealing in a foreign currencies’.
Foreign exchange market
is an organized secondary market where the buying and selling clients of the bankers association of the Philippines meet and where transactions are mapped or recorded.
Philippine dealing system
includes all financial contracts deriving its value from any other underlying assets
Derivatives marekt
example of underlying assets
security prices
commodity prices
interest rates
foreign exchange rates
basic classes of derivatives maret
futures
options
swaps
forward rate contracts
are securities issued by the bureau of treasury with maturities.
Government bonds
the exchange of assets in the financial system is consummated in
specialized financial market
4 major markets
money market
foreign exchange market
capital market
derivatives market
where most of the trading is done
Philippine dealing system
It is the segment of the financial
market with dealings in maturities beyond one year.
Capital Market
It is an organized secondary where
the buying and selling clients of Bankers Association of the
Philippines meet and where transactions are mapped or
recorded.
Philippine dealing system
provide a risk management tool
in the financial system.
Derivatives
first bank in the philippines
Bank of the Philippine Islands
a charity foundation by laymen used for charity works and religious activities. It became a banking institutions run by the friars.
Obras pias
One of the first banks to emerge in the 19th century. It was more of a loan association than a modern bank.
Rodriguez bank
it was the first state bank.
Banco Espanol-Filipinas De Isabel II
First universal bank in the philippines
Philippine national Bank
when did bsp actually started out as the central bank of the philppines
January 3 1949
a segment of the financial market with dealings in short term maturities of financial contracts.
Money Market
segment of the financial market with dealings in maturities beyond 1 year.
Capital Market
is where short-term funds are raised through the buying and selling of short term debt securities such as commercial papers.
Money Market
is where long-term funds are raised through the bond market, which deals with long-term debt securities such as bonds, the stock market which deals with equity securities or stocks.
Capital Market
