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    Inancial Ystem: Prof. Manoharan.M

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    Karan Narang
    The document provides an overview of the global financial system. It describes the key components as financial institutions, markets, instruments, and regulations. It explains that the financial system channels flows of money, provides credit and financial services, and influences economic growth. The system includes banks, capital markets, currency exchanges, and other entities and markets tied together by credit, arbitrage, and technology. The document outlines functions like savings and payments, and notes the system is dynamic due to globalization, innovation, and other factors, but also prone to crises like recessions and banking failures.

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    © All Rights Reserved
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    Inancial Ystem: Prof. Manoharan.M

    Uploaded by

    Karan Narang
    15 views10 pages
    The document provides an overview of the global financial system. It describes the key components as financial institutions, markets, instruments, and regulations. It explains that the financial system channels flows of money, provides credit and financial services, and influences economic growth. The system includes banks, capital markets, currency exchanges, and other entities and markets tied together by credit, arbitrage, and technology. The document outlines functions like savings and payments, and notes the system is dynamic due to globalization, innovation, and other factors, but also prone to crises like recessions and banking failures.

    Original Description:

    Financial Systems

    Original Title

    Fin Systems

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    The document provides an overview of the global financial system. It describes the key components as financial institutions, markets, instruments, and regulations. It explains that the financial system channels flows of money, provides credit and financial services, and influences economic growth. The system includes banks, capital markets, currency exchanges, and other entities and markets tied together by credit, arbitrage, and technology. The document outlines functions like savings and payments, and notes the system is dynamic due to globalization, innovation, and other factors, but also prone to crises like recessions and banking failures.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    15 views10 pages

    Inancial Ystem: Prof. Manoharan.M

    Uploaded by

    Karan Narang
    The document provides an overview of the global financial system. It describes the key components as financial institutions, markets, instruments, and regulations. It explains that the financial system channels flows of money, provides credit and financial services, and influences economic growth. The system includes banks, capital markets, currency exchanges, and other entities and markets tied together by credit, arbitrage, and technology. The document outlines functions like savings and payments, and notes the system is dynamic due to globalization, innovation, and other factors, but also prone to crises like recessions and banking failures.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 10

    FINANCIAL SYSTEM –OVERVIEW

    Prof. Manoharan.M
    FINANCIAL SYSTEM
     Financial system is all about
     Financial institutions
     Financial markets
     Financial instruments
     Legal and Regulatory mechanism
     Participants and circular flow of money
     Various functions (savings ,investments, credit, capital
    etc )

    Financial System is
    • the collection of markets, institutions, laws, regulations, and
    techniques
    • through which bonds, stocks, and other securities are traded,
    interest rates are determined, and financial services are produced
    and delivered around the world.
    FINANCIAL SYSTEM –CONTD.,
     The financial system
     Channelizing flows
     produces and distributes financial services
     supply of credit which allows businesses, households,
    and governments to invest and acquire assets
     The financial system of money and capital
    markets
    i. determines amount and cost of credit available
    ii. determines the supply and cost of credit
    iii. affects the health and growth of the global economy
    and our own economic welfare.
    Financial
    System

    Financial institutions Financial markets Financial services

    1.Regulatory 1.Organized and


    unorganized 1. Commercial Banking
    2.Intermediary
    2. Primary and secondary 2. Stock trading/broking
    i.Banking
    ii.Non-banking 3.. Mutual fund house
    3.Non intermediary 3.ARC
    4.Others 4.Advisory
    1. Capital markets – Equity 5.Portfolio Mgmt.
    and debt
    2. Forex Markets
    3. Commodities markets
    4. Money market
    5. Derivatives markets
    FUNCTIONS OF THE GLOBAL FINANCIAL
    SYSTEM

     Savings function
     Wealth function

     Liquidity function

     Credit function

     Payment function

     Risk protection function

     Policy function
    FACTORS TYING ALL FINANCIAL MARKETS
    TOGETHER
     Credit, the common commodity.
     The shifting of borrowers among markets helps to
    weld the financial system together and to balance
    the costs of credit in the different markets.
     Speculation and arbitrage.
     help to level out prices and maintain price
    consistency among the markets.
     Perfect and efficient markets.
     Some research evidence suggesting that financial
    markets are closely tied to one another due to their
    near perfection and efficiency.
     Financial markets in the real world.
     In the real world however, market imperfection and
    information asymmetry exist.
    THE DYNAMIC FINANCIAL SYSTEM
     The global financial system is rapidly changing.
     In particular, the trend towards the global
    integration of financial systems has been aided
    by the gradual deregulation of financial
    institutions and services as well as the
    increasing harmonization of their regulations.
    Reasons for dynamic nature
    1. Globalization and financial Globalization
    2. Financial Engineering
    3. Privatization
    4. Disinvestments
    5. Mergers & Acquisitions
    6. Securitization
    7. Role of technology in the Fin. System
    FINANCIAL SYSTEM AND THE CRISES
     Banking crisis
     Stock market speculative bubble and crash
     Currency crisis
     Trade wars and Currency wars
     Global financial crisis – contagion and spillover

    Notable Crises of the Past


    1929 –Great Depression
    1997 –Asian Financial Crisis
    2007-09 –Global Financial Crisis
    2010- Euro zone sovereign debt crisis
    WHAT DO YOU KNOW ABOUT
     Ongoing trade war b/w USA and China
     The Growing NPA of Indian bank sector

     Scandals and crimes in banking industry

     Venezuela’s hyper inflation

     Oil price and the Indian economy

     Rainfall and the Indian Economy

     Bitcoin and impact on real currency


    KEY SOURCE OF INFORMATION
     Business Line
     The Economic Times
     Moneycontrol.com
     Cnbc.com
     Reuters.com
     Bloomberg.com
     Economic and Political weekly (EPW)
     RBI website
     Central Banks’ Policy notes and reports
     The Economist

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