Money, Banking & Fin. Institutions 1.1-1.3

financial markets

refers to any marketplace where the trading of securities occurs, including the stock market, bond market, foreign exchange market, and crypto market

stock market

a venue where companies list their shares (equities) and these shares are bought and sold by traders and investors

Foreign Exchange Market

in this market, participants can buy, sell, hedge, and speculate on the exchange rates between currency pairs, such as the US dollar and the Euro.

bond

a security in which an investor loans money for a defined period of time with a pre-established interest rate

cryptocurrency

a digital currency designed to serve as a medium of exchange through a computer network that does not depend on a central authority, such as a government or bank, to maintain it

depository institution

a financial institution that accepts currency deposits from customers such as a household or business firm.

commercial bank

a privately owned institution

• accepts deposits

• makes loans.

• usually a stock corporation whose main objective is to make a profit for its shareholders.

thrift institutions

a financial institution that specializes in accepting savings deposits of households and making mortgage loans and other loans.

Credit unions, mutual savings banks, and savings and loan associations

all types of thrift institutions

financial regulation

the result of the need of some central authority to monitor and control the money supply, reduce the level of risk to which bank depositors are exposed, and maintain bank solvency.

dual banking system of the United States

both the fifty state governments and the federal government issue bank charters.

primary regulators of Banks

National Credit Union Administration, Federal Reserve, Office of the Comptroller of the Currency, and state banking commissions.

The National Credit Union Administration

an independent federal agency that regulates, charters, and supervises federal credit unions.