FINS1612 Chapter Notes - Chapter 1: Commercial Bank, Financial Intermediary, Financial Transaction
3 Nov 2020
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Acts as a medium of exchange , increases speed & efficiency of transactions in markets no need for barter. Solves the divisibility problem , (e. g. if cake = half a cow) & removes the double coincidence of wants requirement. Finance is the art & science of managing the scarce resource of money. The financial system comprises a range of financial institutions, instruments & markets & is overseen by the government (fiscal, super & regulations), central bank (monetary) & prudential supervisors (apra banks, asic markets, accc . The financial system functions to facilitate the flow of funds between deficit & surplus units through the interaction of financial institutions, instruments & markets . Surplus units have an excess of current funds while deficit units have a shortage of current funds. For the financial system to fulfill its function of facilitating the flow of funds , it provides:
