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    Financial Markets and Institutions

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    Daryl Panganiban
    This document provides an overview of financial markets and institutions. It defines the key elements of the financial system as financial instruments, financial markets, and financial institutions. It then describes the roles of financial markets in facilitating the flow of funds and efficient allocation of capital. It classifies financial markets into primary/secondary markets, money/capital markets, and debt/equity markets. It also outlines the roles of financial institutions in resolving market imperfections. Finally, it details the types of financial institutions such as depository institutions, contractual savings institutions, and investment intermediaries.

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    Financial Markets and Institutions

    Uploaded by

    Daryl Panganiban
    102 views21 pages
    This document provides an overview of financial markets and institutions. It defines the key elements of the financial system as financial instruments, financial markets, and financial institutions. It then describes the roles of financial markets in facilitating the flow of funds and efficient allocation of capital. It classifies financial markets into primary/secondary markets, money/capital markets, and debt/equity markets. It also outlines the roles of financial institutions in resolving market imperfections. Finally, it details the types of financial institutions such as depository institutions, contractual savings institutions, and investment intermediaries.

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    This document provides an overview of financial markets and institutions. It defines the key elements of the financial system as financial instruments, financial markets, and financial institutions. It then describes the roles of financial markets in facilitating the flow of funds and efficient allocation of capital. It classifies financial markets into primary/secondary markets, money/capital markets, and debt/equity markets. It also outlines the roles of financial institutions in resolving market imperfections. Finally, it details the types of financial institutions such as depository institutions, contractual savings institutions, and investment intermediaries.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    102 views21 pages

    Financial Markets and Institutions

    Uploaded by

    Daryl Panganiban
    This document provides an overview of financial markets and institutions. It defines the key elements of the financial system as financial instruments, financial markets, and financial institutions. It then describes the roles of financial markets in facilitating the flow of funds and efficient allocation of capital. It classifies financial markets into primary/secondary markets, money/capital markets, and debt/equity markets. It also outlines the roles of financial institutions in resolving market imperfections. Finally, it details the types of financial institutions such as depository institutions, contractual savings institutions, and investment intermediaries.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 21

    FINANCIAL MARKETS

    & INSTITUTIONS
    2

    Presentors: Group 2
    Fernandez, Maricris D.
    Panganiban, Daryl R.
    Torrevillas, Ma. Cecillia G.
    “Financial freedom is a
    mental, emotional and
    educational process”
    - Robert Kiyosaki
    4

    Learning Objectives
    1. To Identify the Elements of Financial System
    2. To describe the roles of Financial Markets
    3. To describe the classifications of Financial
    Markets
    4. To describe the roles of Financial Institutions
    5. To describe the types of Financial Institutions
    5

    Transfer of funds
    helps facilitate
    greater
    economic
    efficiency
    6

    Elements of the
    Financial System
    1. Financial
    Instruments

    2. Financial Markets

    3. Financial
    7

    Elements of the
    Financial System
    Financial Instruments
    (answers the question What)

    - are financial assets


    (Securities, stock, bond) that
    are being traded (purchased
    or sold)
    8

    Elements of the
    Financial System
    Financial Markets
    (answers the question
    Where)

    - is where financial
    instruments are being
    purchased and sold
    9

    Elements of the
    Financial System
    Financial Institutions
    (answers the question Who)

    - are financial intermediaries


    who channels financial
    assets
    Roles of Financial
    10

    Market
    1. Facilitates flow of funds

    2. Allows efficient allocation of


    capital

    3. Enables financing
    expenditures, growth and
    11

    Classifications
    Financial Market
    1. Primary and Secondary
    Markets

    2. Money and Capital Markets

    3. Debt and Equity Markets


    12

    Classifications
    Financial Market
    Primary Market
    - is a financial market in which new
    securities are sold to initial buyers to
    provide funds to the issuer.

    Secondary Market
    - is a financial market in which existing
    securities are traded which allows
    change of ownership.
    13

    Classifications
    Financial Market
    Money Market
    - is a financial market in which short-term
    debt instruments (maturity of one year
    or less) are traded.

    Capital Market
    - is a financial market in which long-term
    securities (such as bond, mortgages and
    stocks) are traded.
    14

    Classifications
    Financial Market
    Debt Market
    - is a financial market in which debt
    instruments (contractual agreement of
    the holder and borrower) such as bond
    and mortgage are issued.

    Equity Market
    - is a financial market in which claim of
    share in income or ownership of assets
    Roles of Financial
    15

    Institutions
    1. Resolve limitations caused by
    market imperfections

    2. Reduce information and


    transaction cost

    3. Reduce exposure to risk


    through risk sharing
    Types of Financial
    16

    Market
    1. Depository Institutions
    - are financial intermediaries that accepts deposits
    and make loans.
    2. Contractual Savings Intitutions
    - are financial intermediaries that acquire funds
    at periodic intervals on a contractual basis.
    3. Investment Intermediaries
    - includes finance companies, mutual funds and
    money market mutual funds.
    Types of Depository
    Institutions
    17

    1. Commercial Banks
    - they raise funds by issuing checkable deposits,
    saving deposits and time deposits.
    2. Savings & Loan Associations
    & Mutual Savings Bank
    - they obtain funds through savings deposits and
    time and checkable deposits.
    3. Credit Unions
    - typically very small cooperative lending
    institutions that acquire funds from shares and
    make consumer loans.
    Types of Contractual Savings
    18

    Institutions
    1. Life Insurance Companies
    - they acquire funds from the premiums that people
    pay and use it to buy corporate bonds and
    mortgages.
    2. Fire and Casualty Insurance
    Companies
    - they also acquire funds from premiums but use it
    to buy more liquid assets.
    3. Pension and Retirement Funds
    - they acquire funds from contributions from
    employers or employees either by automatic
    Types of Investment Intermediaries
    19

    1. Finance Companies
    - they raise funds by selling short-term debt
    instruments and by issuing stocks and bonds.
    2. Mutual Funds
    - they also acquire funds by selling shares and use it
    to buy diversified portfolios of stocks and bonds.
    3. Money Market Mutual Funds
    - they sell shares and buy money market
    instruments.
    4. Investment Banks
    - they do not take deposits but instead buy securities
    20

    References:

    Eakins, S.G. (2012). Financial Markets and


    Institutions (7th Edition). Pearson Education,
    Inc.

    Madura, J. (2012). Financial Markets and


    Institutions (10th Edition). South-Western,
    Cengage Learning.
    21

    Thank you!

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