Markets and financial institutions

Solo disponible en BuenasTareas
  • Páginas : 6 (1321 palabras )
  • Descarga(s) : 0
  • Publicado : 26 de marzo de 2011
Leer documento completo
Vista previa del texto
International Financial System

The I.F.S. is the set of public and private institutions (State and Individuals) that provide the means of financing to the international economy for the development of its activities. These institutions realize a function of intermediation between the units of saving and those of expense, mobilizing the resources of the first ones towards the second ones inorder to achieve a more efficient utilization of the resources.

Public institutions: Central Banks, Supranational Organizations, Departments of Economy, etc.
Private institutions: Banks and Boxes, Big Surfaces, Insurance Companies, Big Construction.

The big surfaces are entities of financing because they sell to minors prices and pay in more time to suppliers, and in addition, sell cash to amajor price, obtaining a profit margin. By what the obtained margin is invested until the moment to pay comes.

Influence of the IMS in the IFS: The IMS; the coins or means of payment are of national character and because every government monopolizes on the one hand the emission of his currency and controls the traffic of coins you were extracting inside his territory. It avoids the creation ofanother monetary system inside his country.
Every currency has a value with regard to the rest of coins named type of change. The money that has a type of change and that, therefore, is valid to realize international transactions is called currency. There are two systems to calculate the value of the coins with regard to other one.
Fixed exchange rate: is a country's exchange rate regime underwhich the government or central bank ties the official exchange rate to another country's currency (or the price of gold). The purpose of a fixed exchange rate system is to maintain a country's currency value within a very narrow band; Also known as pegged exchange rate.
Variable exchange rate: type of exchange rate regime wherein a currency's value is allowed to fluctuate according to theforeign exchange market. A currency that uses a floating exchange rate is known as a floating currency.
The individuals demand stable coins that are not going to suffer variations in order to don’t lose money for exclusively monetary questions. In the public case it is convenient to the State to have a stable currency, since this currency will be on an international market in which it is possible tointervene, but control. The State tries to accumulate stable coins in order that in case of financial crisis, these coins could sell in exchange for national currency, diminishing this way the offer and, consequently, increasing his value.
The currencies lose value fundamentally for two reasons:

1) Internal Reason: an excess of currency exists in traffic for an excessive emission.2) Internal Reason: Excess of currency in traffic for the sale or putting on the market an excess of currency on the part of the agents.

Banking or bank, is a system of institutions that allow the development of all those transactions between persons, companies and organizations that imply the use of money.
Inside the bank system we can distinguish betweenpublic banking and private banking that, in turn, can be commercial, industrial or business and mixed. The private commercial banking is busy with facilitating especially credits to private individuals. Industrial or business invests its assets in industrial companies, acquiring them and controlling them. The private mixed banking combines both types of activities. In the 19th century the industrialbanks were very common, though these have been losing force along the 20th century in favor of the mixed banking. Inside the public banking we must emphasize, first, the issuing bank or central bank, which has the monopoly of emission of money and is owned by the State. Likewise, stand out the institutions of saving and inside these, in Spain, the savings banks.
The growth of the international...