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FINANCIAL MARKETS > Financial Actors > Flashcards

Financial Actors Flashcards

1
Q

Who are the different financial actors?

A
  • government
  • banks
  • brokers
  • corporates
  • individuals
  • regulators
  • institutional investors
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2
Q

What are the different types of banks?

A
  • commercial
  • investment
  • hybrid
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3
Q

What are the three departments at a bank?

A
  • Domestic Retail
  • International Retail
  • CIB
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4
Q

What do central banks do?

A

write and implement monetary policy

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5
Q

What does monetary policy do?

A

it controls money supply, interest rates, and credit availability

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6
Q

What are the largest banks when taking into account market capitalization?

A

American and Chinese banks

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7
Q

When do European banks start appearing in the ranking?

A

When taking into account revenue from IB

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8
Q

Are American banks overvalued or undervalued?

A

Overvalued

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9
Q

Are European banks overvalued or undervalued?

A

Undervalued (due to stricter regulation)

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10
Q

What is the Glass-Steagall Act of 1933?

A

A regulation to separate commercial banks from investment banking to avoid contagion from one sector to another

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11
Q

What act repealed the Glass-Steagall Act?

A

The Gramm-Leach-Bliley Act of 1999 (GLBA)

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12
Q

What act was released in 2010 after the subprimes crisis?

A

The Dodd-Frank Act

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13
Q

What does the Dodd-Frank act do?

A
  • Aims to increase Transparency, Consumer Protection & Financial Stability
  • Increase oversight and mitigate systemic risk
  • prohibit/restrain proprietary trading (Volcker rule)
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14
Q

What are the 2 types of asset management?

A
  • portfolio management
  • collective management
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15
Q

Who does asset transformation?

A

banks

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16
Q

What is asset transformation

A

transforming liquid assets (deposits) into illiquid assets (loans)

17
Q

How does the government finance its budget?

A

issuing bonds

18
Q

What is the process to issue bonds?

A
  • Private placement/auction among banks => PRIMARY MARKET
  • Banks resell bonds in the SECONDARY MARKET
19
Q

What are the two types of bond auction?

A
  • dutch auction: the chosen banks pay the price they bid
  • american auction: the chosen bank pay the price of the lowest bidder
20
Q

What are depositaries?

A

Institutions responsible for the safekeeping and administration of various types of assets on behalf of other

21
Q

What is a fund depositary?

A

Financial institution responsible for holding and safeguarding assets of a mutual fund, ETF (exchange-traded fund), or other investment funds

FINANCIAL MARKETS (5 decks)

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