Los 39.d Flashcards
(6 cards)
What’s a financial intermediary
Facilitate the exchange of assets, capital and risk by standing between the buyer and the seller
What is a broker, dealer and Exchange?
Broker = help clients buy and sell securities by finding counterparties to trade - block brokers help with a large amount of trades
Dealer = facilitate trade by buying and selling from their own inventory, a profiting between the difference between buy price (bid price) and sell price (ask price)
Primary Dealer = dealer than trade with central banks when bank buy or sell gov securities
Exchange = provides a venue where traders can meet
What do Investment banks and Alternative Trading Systems do
IB = help corporate sell common stock, preferred stock and debt securities plus give advice to firms
ATS = same as an exchange but there is no regulatory function, can be called electornic communication networks and multilateral trading facilities
What is a securitizer?
Someone who pools large amount of securities/assets into a pool and then sell interests to investors.
More predictable cash flows = more liquid as ownership interests are easily valued and traded.
Firms may do protect themselves from risk by setting up an SPV or SPE to protect these securitised assets from creditors
What is a Depository Institutions
Examples of depository institutions include banks, credit unions, and savings and loans. They pay interest on customer deposits and provide transaction services such as checking accounts.
