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Commerce - Chapter 15 Notes.doc

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Rita Cossa

credit unions Non-profit, member-owned financial co-operatives that offer a full variety of banking services to their members. trust company A financial institution that can administer estates, pension plans, and agency contracts, in addition to other activities conducted by banks. There are also a variety of other institutions that traditionally have been called non-banks. Non-banks are financial organizations that accept no deposits but offer many services provided by regular banks. Examples include pension funds, insurance companies, commercial finance companies, consumer finance companies, and brokerage houses. We will discuss brokerage houses soon. non-banks Financial organizations that accept no deposits but offer many services provided by regular banks. pension funds Amounts of money put aside by corporations, non-profit organizations, or unions to cover part of the financial needs of their members when they retire. • Model credit card application form • Cost of banking guide • Ten tips you need to know before signing any contract.1 According to this same agency, the financial services sector plays an important role in the Canadian economy, as it: • Employs more than 600,000 Canadians • Provides a yearly payroll of more than $35 billion • Represents 6 percent of Canada's GDP, exceeded only by the manufacturing sector • Yields more than $13 billion in tax revenue to all levels of government • Is widely recognized as one of the safest and healthiest in the world2 Until the middle of the 1980s, the financial services industry in Canada was termed a “four-pillar system.” These four pillars were banks, trust companies, insurance companies, and securities dealers Money is so important to the economy that many institutions have evolved to manage money and to make it available to you when you need it. money Anything that people generally accept as payment for goods and services. barter The trading of goods and services for other goods and services directly. • Portability. Coins are a lot easier to take to market than are pigs or other heavy products. • Divisibility. Different-sized coins could be made to represent different values. Because silver is now too expensive, today's coins are made of other metals, but the accepted values remain. • Stability. When everybody agrees on the value of coins, the value of money is relatively stable. • Durability. Coins last for thousands of years, even when they've sunk to the bottom of the ocean, as you've seen when divers find old Roman coins in sunken ships. • Uniqueness. It's hard to counterfeit, or copy, elaborately designed and minted coins. But with the latest colour copiers, people are able to duplicate the look of paper money relatively easily. Thus, the government has had to go to extra lengths to ensure that real dollars are readily identifiable. That's why some denominations have raised print or raised ink, watermarks, and fine-line patterns.7 money supply The amount of money the Bank of Canada makes available for people to buy goods and services. A falling dollar value means that the amount of goods and services you can buy with a dollar decreases.10 A rising dollar value means that the amount of goods and services you can buy with a dollar goes up. prime rate The interest rate that banks charge their most creditworthy customers. Commercial banks have two types of customers: depositors and borrowers (those who take out loans). A commercial bank is equally responsible to both types of customers. Commercial banks try to make a profit by efficiently using the funds that depositors give th
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