Financial Intermediaries and The Euro Markets - Essay Example

Only on StudentShare

Extract of sample
Financial Intermediaries and The Euro Markets

According to the research findings the financial environment therefore directly or indirectly influence the financial system of any country. Thus the need for financial intermediaries to act as the middlemen in this transactions is important. Therefore for investors to get profit and the lenders to be able to give away money to borrowers the need for financial markets are vital. Financial intermediaries can be defined as an institution that acts as the middlemen between the investors and the firms. These financial institutions include chartered banks, insurance companies, investment dealers, mutual funds, and pension funds. Liquidity has been the basis of these kind of transactions between the parties either the borrowers or the investors. It can be defined as the ease with which a given asset can be changed into cash or by getting access to credit. Thus the main concept of liquidity is to obtain cash. Liquidity is often determined by two factors that measure how easy it is to change it into cash or make it possible for borrowers to obtain the cash. The policy interest rates and the structure of the interest rates paid by the borrowers are often the indicators of liquidity. These rates often influence one either to be motivated to borrow or leave the money with the banks. Most of the world banks are involved in market liquidity which is the rate at which a borrower is able to quickly buy or sell the financial assets at a given time without changing the market price. ...
Download paper

Summary

This article will explore the subject of financial intermediaries and the euro markets under the following divisions: financial intermediation and liquidity; Euromarkets and their growth; the return to convertibility and other associated events; the US balance of payments and so on…
Author : eglover

Related Essays

Explain how the financial difficulties faced by the Irish and Greek governments have impacted on Euro debt markets
This paper will analyze how the financial difficulties faced by the Irish and Greek governments have impacted on Euro debt markets. In the opinion of Stange (2010), the financial crisis of 2008 was the root cause of the 2008-2011 Irish financial crisis which led the country to recession for the first time since 1980s. In September 2008, the Irish government officially declared that the country was in recession and the nation experienced a steep fall in employment in the following months. In January 2009, 326,000 Irish people claimed unemployment benefits; this figure was the highest since...
3 pages (753 words) Essay
Financial Markets and Institutions
Financial intermediaries have played a major role the development and growth of the world’s economy. The financial institutions such as banks and other financial institutions such as microfinance institutions, investment ventures, and Sacco’s provide funds for the development of businesses operations. The Financial intermediaries help investors to save to improve their living conditions. For example, finance institutions give loans to small enterprises and individuals who make take less risky loans but give high returns in terms of interest rates. These returns are used to provide loans...
6 pages (1506 words) Essay
Interest Rates Swa[s Require Markets to be Inefficient
Currency exchange tailors international exchange transactions. Interest rates are characteristic of risks that result from the various key constituents of the foreign exchange market. One of these constituents is the interest rate swaps. Foreign exchange and interest rate operations provide opportunities for hedging in the foreign exchange market. Interest rate swaps in this context can be considered to be unique financing arrangements that allow corporations to significantly cut on their credit costs while improving their control on risks that accrue from interest rates and exposure to...
4 pages (1004 words) Essay
Financial Institutions & Markets - Financial Innovation
Individuals and business concerns now have a wider range of options with respect to different types of borrowing facilities available to them. However, the recent Global Financial Crisis (GFC) is argued to be the result of this financial innovation. As a result of that most of the monetary policy makers have tightened their regulatory policies and have imposed several restrictions on the financial institutions worldwide. Borrowers have become more sensitive towards interest rates fluctuations in the financial market and the world is experiencing a situation of credit crunch now. Hence it is...
6 pages (1506 words) Essay
Financial Markets
Therefore, it is considerably important that shareholders and financial directors have an excellent understanding of the financial setting in which they conduct their activities. It is important to note that a strong financial environment plays a significant role in economic expansion and prosperity. The many corporations increasing funds to finance investment expenses as well as shareholders saving to gather resources for future expenses require stable financial markets. A rapid improvement in technology has also played a significant role in the expansion of financial markets. It has been...
6 pages (1506 words) Assignment
Introduction to financial Markets
The essay is developed from the Financial Markets Theory that avails classical asset pricing hypothesis, a hypothesis composed of objectives such as portfolio choices, basic asset pricing theorem, risk management, portfolio limit, information in financial markets and no risk neutral assessment. Financial Markets Functions The functions of the financial markets are geared towards fulfilling the theory statements and they include: Financial market price determination usually offers modes by which prices are determined both for freshly issued financial assets as well as the available stock of...
5 pages (1255 words) Essay
Financial markets
An asset manager while creating a portfolio diversifies the total investment into an optimal mix of asset class with an aim of either to increase return or reduce risk, so as to create a balanced portfolio. Traditionally asset managers allocated a structure of 45% of assets were invested in equities, 25% in bonds, 15% in property and 15% in cash, based on the client’s need of asset classes which would provide long term capital appreciation for the level of risk that the client is willing to undertake. As per the offered portfolio, 45% of assets were invested in equity which generated high...
3 pages (753 words) Coursework
Got a tricky question? Receive an answer from students like you! Try us!