The financial system
REVIEW OF FINANCIAL SYSTEM RECOVERY UNIT 1
Topic 1: The Financial System
METAL PARTS ARE COINS MINTED BY STATES, COMMON MEASURE USED TO FIX THE PRICE OF THINGS AND FACILITATE THE EXCHANGE OF MERCHANDISE IN THE MARKET AND, CONSEQUENTLY, THE DIVISION OF LABOR.
1.Dinero banking.
The moneys available to the public but the one in the deposits of financial institutions or free disposal. The generalization of new payment instruments, such as bills of exchange, checks and credit card.
2.Funciones money.
instrument of change. Money is the generally accepted medium of exchange by the company in the sale of goods and services.
Means of payment. Money is an instrument accepted by all to pay for purchases or debts.
Means of value. In the market economy and economic analysis of enterprises and governments, the value of all goods is expressed in money. This becomes like a unit of account. Therefore, all assets are denominated in euros or dollars, etc..
store of value: money is the most common forms of holding wealth until needed economical purchase. This is due to the ease of exchange of money for goods and services that may be needed in the future.
3.The financial system.
The financial system is composed of the set of institutions, media and financial institutions and markets. Financial institutions may be of types:
banking: the most important are the State Central Bank, private banks, savings banks and credit cooperatives.
No bank: among the most important include: pension funds, insurance companies, investment funds, leasing institutions, payment institutions, mutual guarantee societies, and so on.
4.The financial markets.
Financial markets are those in which financial assets are traded are the titles of security issued by the financing needs of investors to make investments or purchases.
ROLE OF FINANCIAL MARKETS:
Financial markets have the following functions:
bringing together savers.
The pricing of financial assets based on their bids and offers.
Provide liquidity to financial assets.
Reduce the time and cost of intermediation.
5.COMPOSICION SPANISH FINANCIAL SYSTEM.
The financial system is composed of a plurality of public and private entities. In developing the process of monetary union within the EU Based on the criteria established in the work of Maastricht. The direction and control of the Spanish financial system under the following institutions:
government – brand of economic policy and the maximum charge of running the financial system.
Ministry of Economic and Finance Ministry – is responsible within the government of econmomia area.
State government – those powers in autonomous communities in the economic territory and has central control.
European System of Central Banks (ESCB) – is the EU body responsible for coordinating the monetary policy of all central banks of member countries of the EU. This comprises the European Central Bank and central banks of all EU countries.
European Central Bank – is responsible for formulating monetary policy in the countries of the Eurozone.
Bank of Spain – is responsible for controlling monetary policy, the European central bank dependence.
Commission Nacional del Mercado de Valores – is the agency responsible for monitoring and inspecting the stock market.
Direccion General de Seguros – is responsible for regulating the insurance entities.
Direccion General of Foreign Transactions – performs statistical functions and management of foreign transactions or external trade.
6.ENTIDADES FINANCIAL BANK.
Private Banking. It is composed of all private companies engaged in banking business and serving as intermediaries between savers and investors, in addition to other services.
Savings banks. They are nonprofit institutions.
Credit unions. Cooperatives are engaged in banking business and serve mainly to its partners.
FINANCIAL 7.INSTITUCIONES brokerage or investment.
Agendia companies and securities. Companies are authorized to act on commodity exchanges or securities for third parties.
Collective investment institutions. Aim to trading on financial markets with shares of value both in the primary market in the secondary.
8.ENTIDADES non-banking finance.
leasing companies or lease. Its purpose is by typing the financing of equipment, through a contract of financial arredo, based on tax benefits and option to buy the end of it for salvage value or symbolic.
Entities or factoring receivables. Companies are responsible for carrying out debt collection efforts of their clients, recognized under bills of exchange, etc.. facilitating the financing or the creditors and covering the risks of default.
Mutual guarantee. Companies are aimed at supporting SMEs convediendoles a guarantee to back the credits that apply to these financial institutions.
INSURANCE 8.INSTITUCIONES.
Insurance companies. Companies who, in return for payment of insurance premiums by the insured agree to deliver an indemnity in the event of a disaster.
Pension fund manager. They are societies of assets consist of contributions by their partners during their working lives, which seeks to supplement or replace the pensions paid by social security.
9.The BANK OF SPAIN.
1782 when creating the Banco de San Carlos, precursor of the current Bank of Spain, which renamed the Bank of Spain to San Fernando and then Bank of Spain since 1856. their functions are:
function as a member of the ESCB:
define and implement monetary policy.
Perform foreign exchange operations.
To promote the smooth operation of payment siestema.
Issue tickets.
– National Central Bank functions as:
hold and manage the reserves. To promote the smooth functioning and stability of the financial system. Supervise solvency. Put the coins in circulation produce and publish statistics. Provide treasury services. advise the government.MONETARY 10.POLITICA.
Monetary policy is the set of measures to control the variations in the amount of money in circulation. The European Central Bank and Bank of Spain, therefore, aims at price stability, reducing the money supply in times when prices rise and also increase the money in circulation at times of low inflation.
11.SERVICIOS TREASURY AND DEBT POLICY.
The Bank of Spain has instructed the Financial Service of the Public Debt.
12. MEDIA AND PAYMENT SYSTEM
The Bank of Spain is the only financial identity authorized to issue euro banknotes put into circulation in the Spanish state. Determines the amount in circulation, and decide on their characters, cancellation or renewal and circulation of coins. the mint is an agency of Spain on the manufacture of coins and banknotes.
13.Other POWERS OF THE BANK OF SPAIN.
Issue a report on the progress of the economy, production of economic statistics that are published in the form of newsletters, etc..
PRIVATE 14.BANCA.
The main activity of banks consists of raising money from savers, companies and individuals and delivered as an interest return. Private banking is made up of all those institutions that for-profit business engaged in banking in the form of joint stock company. banking within the financial system, banking controls most of it.
15.CAJAS SAVINGS.
financial institutions are nonprofit, public interest, but of a private nature and charitable social character, as to the fate of their profits or surpluses. today, its operations and performance are similar to private banks. as has happened in private banks, these entities have had a process of concentration, being the most important La Caixa and Caja Madrid. are organized through the Spanish Confederation of Savings Banks.
16.INTRODUCCION A FINANCIAL TRANSACTIONS.
When capital is available, usually one thinks of the possible uses that can be given to it. These possibilities are two or expense and is dedicated to the enjoyment, or savings and investment. The performance of a financial operation is measured using a percentage called the interest rate. The calculations are made following a specific rule to the financial law is called. Finance laws are normally used for capitalization capitalization simple and compound. To implement this law, we must know the data that influence the calculation:
– Time
– Interest rate
– Calculation of the interest credit
The value of the capital at present is called present value when it reaches maturity and seed capital. Capital valued at current mometo called seed capital and capital when it reaches final maturity.
17.CONCEPTO of financial transaction.
– The exchange is not done at the same time, there are different dates, is not simultaneous.
– The provision and compensation are equivalent.
18.ELEMENTOS of an operation.
origin of the financial transaction.
End of financial transaction.
Duration of financial transaction.
Creditor of the financial transaction.
Borrower of the financial transaction.