BU111 Lecture Notes - Lecture 5: Private Equity, Trust Company, Canadian Dollar
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BU111 Full Course Notes
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Interest rates (high interest rates decrease demand: employment rates (high unemployment people do not buy luxuries, exchange rates (canadian dollar change, buying foreign goods, balance of trade, productivity. Significance: affect economic stability, employment, economic growth (measures: aggregate output, gdp, gnp) Four legal areas/pillars: chartered banks, alternate banks, life insurance companies, pension plans and venture capitalists. Lines between pillars have been blurred due to regulation. Pillar #1 - chartered banks: publicly traded, profit-seeking companies, concentrated and highly regulated, bank act limits foreign-controlled banks to <8% of total domestic bank assets, major source of short-term loans for business. Five largest account for 90% of total bank assets. Read textbook: deregulation, changes in consumer demands, competition from foreign banks. Pillars #2 and #3: pillar #2 - alternate banks, trust companies & credit unions, pillar #3 - specialized lending/saving intermediaries. Facilitate trade of stocks, bonds, and other products in securities markets: primary markets. Secondary markets: toronto sock exchange and other exchanges.
