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Overview and Introduction to Financial System

Overview and Introduction to Financial System

• IntroductionCore booksRequirementsPresentation, evaluation

• Overview on the whole financial system

•Historical background of money

INTRODUCTION Course: Introduction to Finance Department: Finance, EII.37 Head of Department.: Dr. Vígvári, András Secretary: Zsuzsanna Rébel EII.37 Subject coordinator teacher: Andrea Vallyon, EII.39;

vallyon.andrea@bgf.kkfk.hu, vallyon.andi@gmail.com Consultations: at EII.39 on Thuesdays at 14.50-16.10 Materials: Sharepoint Pénzügy Tanszék Angol

tagozat Introduction to Finance file & Coospace: Introduction to Finance file

CORE BOOKS Lawrence J. Gitman: Principles of Managerial Finance,

Addison - Wesley 10th Editionhttp://wps.aw.com/aw_gitman_pmf_11 Brealey and Myers: Principles of corporate Finance,

West Publishing Companywww.mhhe.com/business/finance

György Székely: The Essence of Money and Banking A Handbook for Financial Managers. KJK-Kerszöv Kft.

2002. Stephen Valdez: An Introduction to Global Financial

Markets, Macmillan Press Ltd.1997

REQUIREMENTS To pass

Successful written exam ( 56 points from 100 points )3 parts:

Test questions ( pre-exam: Dec. 14) Calculations ( Oct. 26) Essay (pre-exam: Dec. 14)

Presentations alternatively (10-15 minutes) in lecture (max. +15 points) – topics are related to lectures’ themes

PRESENTATION Alternative Could be made in pairs Max 15 minutes, one per

each lecture Hand-out + Power Point Application for

presentation: after the lecture

Topics ( see sharepoint) Evaluation: presentation

skills + hand-out materials

OVERVIEW AND WELCOME!

What does financial system mean in the economy?

What is its task? – determinations Who are the participants? Direct and indirect flow of capital What are the instruments in the financial

markets? Different markets and tasks Investment decision from the private investor’s

place

FINANCIAL SYSTEM Markets Instruments Rules, acts, regulations Institutes People Techniques Money and capital connections in the

economy

FINANCIAL INSTITUTIONS AND ITS ENVIRONMENT

MONEY SUPPLY AND DEMAND

Borrowers and lenders – supply and demand Borrowers

Individuals Companies Government Public corporations Municipalities

Lenders: individuals (and companies) Deposit in Commercial bank Shareholder Investment funds, mutual funds pension funds Insurrance companies

INTERMEDIARIES

Intermediaries (pénzügyi közvetítők)– financial institutes Investment funds,Mutual fundsPension funds Insurrance companiesCommercial banks

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FINANCIAL INSTRUMENTS AND FINANCIAL MARKETS Securities

Freely bought and sold Shares, preference

shares Corporate and goverment

bonds, eurobonds T-bills certificate of deposit,

commercial papersFinancial markets

- primary- secondary

INVESTMENT DECISION Market situation- the

pyramid Instruments as a

legal claim (two main types: bond

and share) Participants

( bearish and bullish traders and speculators)

Institutions and regulations

MATERIALS FOR THE TOPIC Stephen Valdez: An Introduction to Global Financial

Markets,Macmillan Press Ltd.1997 – chapter 1 György Székely: The Essence of Money and BankingA Handbook for Financial Managers. KJK-Kerszöv Kft.

2002. Lawrence J. Gitman: Principles of Managerial Finance,

Addison - Wesley 10th Edition – see sharepoint: CH1:21-28old.

Sharepoint: Keown CH2 Financial markets and interest rates

Lecture 1. ppt.

THANK YOU