BU111 Lecture Notes - Lecture 4: Money Supply, Trust Company, Canada Trust
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BU111 Full Course Notes
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Document Summary
Financial institutions facilitate the flow of money. Four distinct legal areas or pillars: chartered banks, alternate banks, life insurance companies, investment dealers. Lines between pillars have been burred due to deregulation. Concentrated and highly regulated industry: five largest account for 90% of total bank assets, bank act limits foreign controlled banks to less than 8% of total domestic bank assets. Major source of short term loans for businesses: secured and unsecured loans. Changes in banking: deregulation, changes in consumer demands, competition from foreign banks. Bank of canada: canada"s central bank formed in 1935, manages economy and regulates aspects of chartered bank operations, manages money supply. Insurance corporation, venture capital firms, and pension funds. Security markets: facilitate trade of stocks, bonds, and other products in security markets. Primary markets: investment bankers/dealers, advise, underwrite, and distribute. Secondary markets: toronto stock exchange and other exchanges. Underwrite and take spread and risk o (cid:858)best effort(cid:859) on commission.
