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A short course of lectures
«Financial System»

Share marketFinancial intermediationLearning objectivesDebt instrumentsFinancial intermediaries: intermediation functionsCredit risk premiumMonetary banking sectorLearning objectivesHow does a central bank maintain a bank liquidity shortage?Monetary banking institutionsDefining the financial systemLearning objectivesIs "money supply" a misnomer?Money creation is not dependent on a cash reserve requirementCentral bankEnhanced liquidity for lenderPrice discoveryEfficient allocation of fundsTrading form: single and dual capacityImplementation of monetary policyLiquidity and borrowing cost reductionLiquidity-sacrifice premiumThe cash reserve requirementMarket form: exchange-traded and OTC marketsTrading systemMoney creationLearning objectivesPermanent or semi-permanent capital of the issuersUniqueness of banksRisk alleviationEconomies of scaleEconomic functions of secondary marketsCollective investment schemesTrading (secondary market)Learning objectivesRetirement fundsInstruments of investment vehiclesPrice discovery and informationThe mechanics of price discoveryImproved diversification for lenderIssuing methods What is price discovery?Fisher hypothesisClassification of financial intermediariesPublic issueFacilitation of flow of fundsTrading driver: order or quoteMeasures of moneyAlternative investmentsComposition of interest rates Price discoveryInsurersPayments systemRole of the central bank in money creationMonetary policy functionThe money identity and the creation of moneyFinancial intermediaries: classification and relationshipFinancial instrumentsDerivative instrumentsAuctionPrivate placementInvestingFinancial instrument typesMarketabilityForeign exchange marketOrganizational structure of financial marketsSharesBond marketMoney and its roleGovernment spendsComposition of the nominal risk-free ratePrivate sector banksWhat is money?Market mechanismShare instrumentsFinancial marketsIssue (primary market)Money creation does not start with a bank receiving a depositAssistance in price discoveryEconomic functions of financial intermediariesSupport of primary marketDeposit instrumentsExpected inflationMoney creation starts with a bank loanDerivative marketsLearning objectivesMarket efficiencyMoney creationFinancial market participants & short sellingNotes and coins depositedNon-financial lenders and borrowersTap issueLenders & borrowersClearing and settlementMoney marketSharesQuasi-financial intermediariesPrimary and secondary marketsFinancial intermediariesBondsPrice risk lessened for the ultimate lenderRole of interest rates in security valuationRole of central bank in price discovery
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