[工程科技]Financial+Sector_outcome+1.ppt

Financial Sector: An Introduction Outcome 1 Unit Purpose Explain the role of financial institutions in the UK financial sector. Explain the role of capital markets in the UK Financial sector. Explain the role of money markets in the UK financial sector. A total of 8 weeks, which include 32 lecuring hours will be dedicated to this unit. Assessment The Unit will be assessed by one comprehensive Instrument of Assessment under controlled conditions. The assessment should last no more than 2 hours and will involve a written piece in response to specific questions which may be based on stimulus materials. The students will be given the case study 7-10 days before the assessment opportunity. Candidates may bring a copy of the case study to the assessment and one A4 handwritten notes with both front and back sides written, a paper dictionary, but may not bring any other material. Financial Intermediation The economy consists of two “economic agents”: Surplus units (those whose earnings from all sources is greater than their expenditure, i.e. they have a capacity to save.) Deficit units (those whose spending is greater than their current revenue, i.e. they have borrowing needs. They may have to borrow or sell off some of their existing assets.) Financial intermediary “a double coincidence of wants” The deficit party wants to borrow $10,000 for 6 months The surplus party wants to lend out $10,000 for 6 months Financial intermediary’s definition A mechanism that assists surplus units in transferring funds to deficit units. relies on relationships of a contractual nature. Taking on the responsibility of a principal. Direct Lending vs. Indirect lending The problem of “liquidity” A person’s ability to pay their debts as they fall due. Problems of matching surplus and deficit units: Maturity Amount Risk Location How Indirect Lending Could Solve these Problems… Maturity Transformation Building societies or some other financial intermediaries usually have long-term depositor