Introduction To Financial System
Introduction To Financial System
Contents
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Contents
04 Get a modern PowerPoint Presentation that is beautifully designed. I
hope and I believe that this Template will your Time.
Introduction to Finance
What is The study of how individuals,
institutions, governments, and
Finance? businesses acquire, spend, and
manage money and other financial
assets.
To make informed
02
investment decisions.
To determine good
03
financing sources.
We need to know tools to
04 maximize returns and
minimize risks.
Areas of Finance
Areas of
Studies
Financial
Management Capital Markets
focuses on decisions and Institutions Investments
relating to how much relates to the study of
and what types of financial systems and
assets to acquire, how focuses on decisions
its components, interest concerning stock and
to raise the capital and securities valuation,
needed to buy assets, bond investments,
and the regulation of security analysis,
and how to run the firm financial markets and
so as to maximize its portfolio management,
institutions. and market analysis.
value.
Areas of Finance
Areas of
Application
Corporate
Finance Personal
Application of finance Finance Public
tools in investing and Application of finance Finance
financing decisions in tools in the
an institutional setting. Application of finance
management of tools for the effective
individual and family allocation of public
financial resources. funds for government
services, public
investment, and public
debt.
Fundamental Principles in Finance
SECURITIES
DEMANDERS SAVERS
CASH (PESOS)
The Capital Allocation Process
SECURITIES SECURITIES
INVESTMENT
DEMANDERS SAVERS
BANK
CASH (PESOS) CASH (PESOS)
The Capital Allocation Process
COMPANY INTERMEDIARY
SECURITIES SECURITIES
FINANCIAL
DEMANDERS INTERMEDIARY
SAVERS
CASH (PESOS) CASH (PESOS)
Elements of Financial System
Maturity
Options
Treasury Bills
Short-term debt financial instrument issued by the government.
Commercial Paper
Short-term unsecured promissory notes issued by large companies with strong credit
ratings
Negotiable Certificates of Deposit
Certificate issued by a bank as an evidence of existence of a time deposit.
Instruments securities, with a promise by the seller to buy back those assets at a
specified date and price.
Treasury Bonds
Long-term debt financial instrument sold by the government.
Corporate Bonds
Long-term promissory notes issued by companies with strong credit ratings
Stocks
Evidence of ownership in a corporation, allowing the holder to enjoy some profits and rights
Financial Institutions
An Overview
Financial intermediaries that channel
Financial the savings of individuals, businesses,
and governments into loans or
Institutions investments.
Institutions
Maturity • FIs can better bear the risk of mismatching the
Intermediation maturities of their assets and liabilities.
Depository Institutions
financial institutions
whose main
business activities
involves accepting
deposits or savings
from individuals (and
institutions) and then
lending these pooled
savings to
businesses,
governments, and
other individuals.
Categories of Financial Institutions
Contractual Savings
Organizations
financial institutions
whose primary
function is to collect
premiums from fund
suppliers and
provide savings
and/or financial
protection against
loss of life and
properties.
Categories of Financial Institutions
Securities Firms
financial institutions
whose main business
activities involves
accepting savings
from individuals or
businesses and pool
them to invest in
financial securities,
and to facilitate and
transfer securities
between investors.
Categories of Financial Institutions
Finance Firms
financial institutions
engaged in providing
loans directly to
consumers and
businesses, and
helping borrowers
obtain mortgage
loans on real
property.
Financial Markets
An Overview
a mechanism in which buyers and
Financial sellers trade financial assets (stocks,
bonds, currencies, etc.).
Markets
They provide for a forum/platform
onto which the providers and
demanders of funds can do financial
transactions directly.
Categories of Financial Markets
Categories of Financial Markets
Regulation of the
Financial System
Regulators of Financial Institutions
CURENCY ISSUE
The BSP has the exclusive power to issue the national currency. All notes and coins issued by the BSP are fully guaranteed by
the Government and are considered legal tender for all private and public debts.
FINANCIAL SUPERVISION
The BSP supervises banks and exercises regulatory powers over non-bank institutions performing quasi-banking functions.
Regulators of Financial Institutions
OTHER ACTIVITIES
The BSP functions as the banker, financial advisor and official depository of the Government, its political subdivisions and
instrumentalities and government-owned and -controlled corporations.
Thank you
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