After reading this chapter, you should be able to: Identify and explain the functions of money and the components of the U.S. money supply; describe what backs the money supply, making us willing to accept it as payment; discuss the makeup of the Federal Reserve and its relationship to banks and thrifts;...
Trang 1Money, Banking, and Financial
Institutions
Trang 2Functions of Money
•
Trang 3• Currency
• Checkable deposits
• Institutions offering
checkable deposits
• Commercial banks
• Savings and loan
associations
• Mutual savings banks
Credit unions
• Savings deposits including money market deposit accounts (MMDA)
• Small-denominated time deposits
• Money market mutual funds (MMMF)
Trang 4keep value stable
Trang 5money
unacceptable
supply – monetary policy
Trang 6Federal Reserve Banking System
Trang 7Commercial Banks
Thrift Institutions (Savings and Loan Associations, Mutual Savings Banks, Credit Unions)
The Public (Households and Businesses)
12 Federal Reserve Banks Board of Governors
Federal Open Market Committee
Trang 8The 12 Federal Reserve Banks
Trang 9setting monetary policy
operations
Trang 10government
Trang 11independent agency
pressures
increase interest rates in order to stem inflation as needed
Trang 12World’s 12 Largest Financial Institutions, 2009
Royal Bank of Scotland (UK)
Barclays (UK) Deutsche Bank (Germany)
BNP Paribas (France) HSBC Holdings (UK) JPMorgan Chase (US) Credit Agricole (France)
Citigroup (US) Mitsubishi UFJ (Japan)
0 1.5 2.5 3.5
Assets (Trillions of U.S Dollars)
Trang 13encouraged home ownership
mortgage-backed bonds
Trang 14up and bundling groups of loans into new securities
collapsed
abandoned homes and mortgages
Trang 15firms
Trang 16(TARP)
emergency loans
failure
Trang 17activities
Money Market Mutual Fund Liquidity Facility
Trang 18Facility
Facility