Money Supply In The World Flashcards
Where is Money Supply recorded?
Liabilities side of monetary institutions’ balance sheet.
Where are the counterparts of money supply recorded?
Assets side of BS.
What are the counterparts of MS?
Cash and other payment means Loans Debt securities held Money market funds Equity These counterparts are the source of money increase in the economy.
What are monetary financial institutions’ functions?
To receive deposits from other entities
To grant credits and make investments in securities.
Who are MFI?
Central banks
Credit institutions
Deposit taking institutions
Money market funds
What are money market funds?
they are open mutual funds that invest in short term securities
What is a traveler’s check?
Preprinted, fixed amount check issued by banks
Signed by the buyer upon purchase and when used.
What are repurchase agreements?
A type of short-term loan used in the money market whereby the seller of a security agrees to buy it back at a specific time and price.
For the party selling is a repo, for the buyer is a reverse-repo.
How are repo’s used?
When CB wants to increase MS, it buys securities from commercial banks.
When CB wants to decrease MS, it sells back the bought securities (reverse repo).
What is Eurocurrency?
Any currency traded outside its country of issue.
Foreign currency deposited in banks outside the home country.
What is eurocredit?
Loan whose denominated currency is not the lending bank’s currency.
