FINS1612 Chapter Notes - Chapter 1: Commercial Bank, Financial Institution, Government Debt
Document Summary
1. 1 financial crisis and the real economy: a financial system encourages savings, provides funds for investment and facilitates transactions for goods and services. The financial system and the financial markets are inextricably connected with the real economy: historically, financial markets have exhibited periods of extraordinary volatility. Gfc is a recent and prominent example of the volatility that can characterise the financial markets and the consequences that volatility can have in the real economy: the gfc is now viewed as having two parts or phases. The first was concentrated in the mortgage derivatives markets and brought down a number of us-based institutions. The second was a sovereign debt crisis emanating form several troubled. Money is a universally acceptable medium of exchange and a store of value. 1. 2 the financial system and financial institutions: a financial system comprises financial institutions, financial instruments and financial markets.
