Hoorcollege 1
6-2-2018
Why Study Money, Banking, and Financial Markets?
To examine how fnancial markets work
Financial markets:
o Markets in which funds are transferred from people and frms who have an excess of
available funds people and frms who have a need of funds.
In more general economic terms: To allocate capital as efcient as possible wat is de
optimale verdeelsleutel waar kapitaal vandaan komt en naartoe gaat
The financial systen:
10% is directe fnanciering
90% is indirecte fnanciering
Why Study Money, Banking, and Financial Markets?
These funds can take lot of diferent forms:
Savings & Loans, bonds, stock etc.
Transfer of funds can occur in lot of diferent markets”:
Through banks (indirect fnance), on bond markets, on stock markets, on foreign exchange
markets etc.
The big questions:
What determines the price of lending and borrowing (interest rates)?
What determines the value of these fnancial assets?
Key words: trust and confdence!!
Key words: Trust and confidence:
Interest on 10 year government bonds:
What are bonds? schuldlening opgedeeld in kleine stukjes
What does the interest tell us? hoe veel vertrouwen heb je erin dat je je geld terug gaat
krijgen dat je hebt uitgeleend.
o Wisselkoers: als deze daalt is het geld dat jij hebt uitgeleend veel minder waard dit
jaar
1
6-2-2018
Why Study Money, Banking, and Financial Markets?
To examine how fnancial markets work
Financial markets:
o Markets in which funds are transferred from people and frms who have an excess of
available funds people and frms who have a need of funds.
In more general economic terms: To allocate capital as efcient as possible wat is de
optimale verdeelsleutel waar kapitaal vandaan komt en naartoe gaat
The financial systen:
10% is directe fnanciering
90% is indirecte fnanciering
Why Study Money, Banking, and Financial Markets?
These funds can take lot of diferent forms:
Savings & Loans, bonds, stock etc.
Transfer of funds can occur in lot of diferent markets”:
Through banks (indirect fnance), on bond markets, on stock markets, on foreign exchange
markets etc.
The big questions:
What determines the price of lending and borrowing (interest rates)?
What determines the value of these fnancial assets?
Key words: trust and confdence!!
Key words: Trust and confidence:
Interest on 10 year government bonds:
What are bonds? schuldlening opgedeeld in kleine stukjes
What does the interest tell us? hoe veel vertrouwen heb je erin dat je je geld terug gaat
krijgen dat je hebt uitgeleend.
o Wisselkoers: als deze daalt is het geld dat jij hebt uitgeleend veel minder waard dit
jaar
1
