Unit 16 The financial system

financial system

the mechanism by which money flows from savers to users

Securities

obligations of the issuer to provide the purchaser with expected stated returns for investment

financial markets

markets where financial securities, such as stocks and bonds, are bought and sold

primary markets

firms and gov issue securities and sell them initially to the general public

secondary markets

collection of financial markets where previously issued securities are traded among investors

role of financial institutions in the sale of securities

purchase new securities issues from corporations or provincial and municipal governments and then resell the securities to investors.

where are the world largest stock markets

New York stock exchange and NASDAQ stock market

Two types of financial institutions

depository and non-depository

difference between credit unions and banks

banks lend money to businesses and to individuals credit unions mostly to individuals usualy in the form of mortgage loans

Financial Institution

intermediary between savers and borrowers, collecting funds from savers and then lending the funds to individuals, businesses, and governments

Canada Deposit Insurance Corporation (CDIC)

A federal Crown Corporation providing deposit insurance against loss (up to $100,000 per depositor) when a member institution fails.