money and capital market Essay example
Undergraduate
Essay
Finance & Accounting
Pages 3 (753 words)
Download 0
In conclusion, the economy of the world is slowly recovering from a deep financial crisis but with a wide range of uncertainties. Policies regarded the macro economy should be co ordinate so that sustained growth that is balanced is achieved (Monetary policy report, 2011. P.5). this will encourage more investment among investors…

Introduction

This form of policy gives the bank an opportunity to avail massive liquidity. This policy is very effective in addressing frozen liquidities that are experienced across the globe especially in the United States of America where money transfer between banks has been witnessed during a financial crisis. This is a step to mitigate the effects liquidity shortage could have as far as solvency problems is concerned. Liquidity policy response is also beneficial in many ways. It does not only offer solutions to short term money problems in market rates. It also helps to ease pressures at the markets as far as funding is concerned. This is a step towards ensuring that funds are supplied for long term benefits as well. Further, central banks help by enlarging the eligibility base as far collateral lending is concerned. In exceptional cases, central banks increase their lending bases to non depository financial institutions and banks as well (Stein, 2011, p. 4). Finally, central bank uses the liquidity response policy to establish felicities for lending to enhance the market repose between banks. Liquidity response policies to the economic crisis have been seen to be essential in nurturing good communications among different countries of the world. ...
Download paper
Not exactly what you need?

Related papers

Stock Market Efficiency: Is the UK Capital Market Really Efficient?
The aims and objectives of the research elucidate and make specific the means of the exploration and analysis. In fact, the methodologies used in following the line of investigation was the primary sources that include personal observations of the researcher, telephonic and personal interviews with influential capital marketplace personals, company managers, several brokers; and secondary sources…
Investing money into the stock market,reasons
Market efficiency Eugene Fama in 1970 developed the concept of market efficiency on the basis of EMH (efficient market hypothesis). He suggested that at any given time the prices of stocks are purely dependent on the information present in the stock market regarding stock or overall market (Moyer, McGuigan & Kretlow 2008). He also concluded that no one can efficiently predicts the exact future…
Money Management: Exchange on Trade Fund (ETF), which is associated with the stock market
Money management is the process of being a custodian of one’s finances by knowing where today’s finances are being spent, and drawing a well thought out plan showing where one wants this money to go. Therefore, it calls for one to be well organized; have set goals, which would gear this investment to success; have a track of one’s spending by putting in place a realistic budget, and above…
Capital
The prices of the Australian goods exports have decreased since May, due to the decrease in the price of crude oil, iron ore, etc. The Australian dollar price has appreciated over three months, despite the deterioration in the global economy and fragile financial condition. This study aims at evaluating the decision of Reserve Bank of Australia (RBA) for not changing the cash rate until December.…
introduction of market timing theory (capital structure)
Generally, it has been argued that managers often time the equity market to ensure maximum benefits (Guney and Hussain 1-2). According to Baker and Wugler (1-2) market timing is one of the major determinants used in examining an organisation’s capital structure, and how it uses its equity and debt. This means that companies do not give too much importance to whether they finance with equity or…
money and capital market
With reference to this, the paper will discuss about the challenges and issues associated with Basel II, which further led to the proposal of replacing it with Basel III. Discussion Basel Accords Basel Accords refer to a set of banking regulations issued by Basel Committee on Banking Supervision (BCBS). The association has developed three Basel accords till date, which comprise of Basel I, II and…
Money Market Mutual Funds
Money market funds are viewed widely as investments that are as safe as deposits in the bank that provide returns that are higher than those of bank deposits are. Money market funds often store money that at the time is not in current investment due to the funds high liquidity. In the United States, the first money market fund was the brainchild Henry B. R. Brown and Bruce R. Bent in 1971 in the…