Chapter 10 - Financial Markets & Indentification of Financing Needs Flashcards

1
Q

8 Other sources of financing from the private market (need a summary of each )

A
  • Institutional investors
  • Private equity
  • Venture capital
  • Pledge funds
  • Unit trusts
  • Pension schemes
  • EIS
  • Banks
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2
Q

4 main groups of banks

A
  • Retail banks focus on the general public/consumers by operating with multiple branch locations. Services offered
    include providing current and saving accounts and issuing credit cards, mortgages and loans.
  • Commercial banks focus on company customers by accepting deposits, offering checking (current) and saving
    accounts and providing company loans. They also support companies by offering additional services such as basic
    investment products, accepting payments from customers and providing letters of credit to companies overseas.
    Banks such as Barclays and HSBC provide retail and commercial banking.
  • Investment banks such as JP Morgan, Deutsche Bank and Morgan Stanley help startup or expanding companies
    by issuing stocks or bonds to investors in financial markets. They help companies ‘go public’ or sell debt by
    locating interested investors. Similarly, corporations use investment bankers to negotiate the terms of a merger or
    acquisition.
  • Central banks, also referred to as reserve banks (such as the US Federal Reserve Bank and the Bank of England),
    manage the monetary system for a government, including the state’s currency, money supply and interest rates.
    They also usually oversee the commercial banking system of their respective countries. These institutions are
    usually in charge of overseeing the commercial banking sector within their jurisdictions.
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