Introduction

Financial System n Financial Environment n Financial Instruments n Financial Institutions n Financial Markets

I. Financial Environment n A. Economic Environment Microeconomic Environment Microeconomic Environment Macroeconomic environment Macroeconomic environment n B. Cultural Environment (Socio-Demographic Environment) n C. Regulatory Environment n Technological Environment

II. Financial Instruments A. Money n Definition Legal Definition of Money Legal Definition of Money Functional Definition of Money Functional Definition of Money n Monetary Standard Fiat Standard (Credit Money, Managed Money)

n Components of Money M1M1 –Currency In circulation –Travelers Checks –Demand Deposits –Checkable Deposits NOW Accounts NOW Accounts ATS (Automatic Transfer Service) Accts. ATS (Automatic Transfer Service) Accts. Share Draft Accounts Share Draft Accounts

M2M2 –M1 –Overnight RPs –Overnight Eurodollars –Savings Deposits –Small Time Deposits (< $100,000) –Small Denomination Term RPs (< $100,000)

M3M3 –M2 –Large Time Deposits –Large Denomination Term RPs –Term Eurodollars

L –M3 –U.S. Savings Bonds –Short-Term Treasury Securities –Commercial Paper –Bankers Acceptances –Money Market Funds

B. Other Financial Instruments Promissory Notes and Drafts Promissory Notes and Drafts Debt and Ownership Instruments Debt and Ownership Instruments Convertible and Non-Convertible Inst. Convertible and Non-Convertible Inst. Short-, Intermediate-, and Long-term Inst. Short-, Intermediate-, and Long-term Inst.

Marketable and Non-Marketable Inst. Marketable and Non-Marketable Inst. Secured and Unsecured Instruments Secured and Unsecured Instruments

III. Financial Institutions A. Definition

B. Private Institutions IntermediariesIntermediaries – Depositoty Institutions – Contractual Institutions – Investment Institutions – Borrowing Institutions Non-IntermediariesNon-Intermediaries

C. Public Institutions D. International Institutions

IV. Financial Markets A. Types of Financial Markets International and Domestic MarketsInternational and Domestic Markets OTC, Organized, Third and Fourth MarketsOTC, Organized, Third and Fourth Markets Primary and Secondary MarketsPrimary and Secondary Markets Money and Capital MarketsMoney and Capital Markets Spot and Derivative marketsSpot and Derivative markets

IV. Financial Markets B. Market Trends l Globalization l Securitization l Credit Enhancement l Financial Engineering