BU111 Study Guide - Final Guide: Customer Switching, Bearer Bond, International Monetary Fund
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BU111 Full Course Notes
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Document Summary
Lines between pillars have been blurred due to deregulation. Individuals, governments and businesses have a surplus of money, and our financial system has ways to tap into that surplus, and put it into the hands of other individuals, governments, and businesses that need it. Five largest account for 90% of total bank assets. Bank act limits foreign-controlled banks to <8% of total domestic bank assets. Serve individuals, business, and others (government organizations) Major source of short-term loans for business. Secured loans require collateral such as house, car, bonds, stocks, etc. Chartered banks also expand money supply through deposit expansion. One source of revenue for banks is paying you next to nothing for your deposits, but loaning your money to others for higher interest rates. Manages economy and regulates aspects of chartered bank operations. Manages money supply (picture in text book: tools: Open market operations: buy or sell govt securities. Bank rate: lower or raise the bank rate.
