? Write a paper, describing at least three major financial institutions.
? Describe possible markets those institutions, such as those in the following list, are involved with and explain interactions among them. Cite at least two sources.
o Commercial banks
o Insurance organizations
o Investment banks
o Pension funds
o Mutual funds
o Underwriting stock or bond insurance
o Insurance products
The Role of Financial Institutions in Financial Markets
Insurance organizations are one of the most important inventions of the 18th century. Without vehicles for mitigating risks, financial investment and management would be as they are today. Insurance is a form of risk management wherein in a party hedges against a risk by paying premiums to the insurance companies.
Without insurance organizations, it would be difficult for investors including investment banks and commercial banks to find a third party which is willing to take on a long position on their insurable risks. With insurance companies, investors are more willing to take in more risks and hence invest more since they can always perform hedging activities at a very affordable cost.
These financial institutions specialize in the sale of new securities to the public (Chartered Financial Analyst (CFA©) Institute, 2008, p. G-26). This activity is called underwriting stocks or bonds, which is a highly specialized activity. In underwriting new securities, investment banks perform an important role. This role includes verifying whether the issue price identified by the issuer creates enough demand for the security. This means that at that ...
The role of financial institutions in financial markets are examined.
Define the functions and roles played by financial markets and institutions
Define the functions and roles played by financial markets and institutions, particularly as they relate to the flow of funds from lenders to borrowers within the global financial system
You want to explain to a group of new hire bank employees the role the Great National Bank has as an institution in the financial market and the roles financial markets have in the economy. Create a slide presentation that presents the primary roles that financial institutions have in financial markets and the roles financial markets have in the broader economy. Explain the various types of financial markets and the types of institutions that are considered financial intermediaries.View Full Posting Details