Module 18 - Money and interest rates Flashcards
(69 cards)
1
Q
Describe the functions of money
A
.
2
Q
Monetary financial institutions
A
.
3
Q
Retail banking
A
.
4
Q
Wholesale banking
A
.
5
Q
Financial instruments
A
.
6
Q
Liabilities
A
.
7
Q
Sight deposits
A
.
8
Q
Time deposits
A
.
9
Q
Sale and repurchase agreements
A
.
10
Q
Certificates of deposit
A
.
11
Q
Gearing (or leverage)
A
.
12
Q
Assets
A
.
13
Q
Market loans
A
.
14
Q
Bills of exchange
A
.
15
Q
Treasury bills
A
.
16
Q
Reverse repos
A
.
17
Q
Maturity gap
A
.
18
Q
Liquidity
A
.
19
Q
Liquidity ratio
A
.
20
Q
Sub-prime debt
A
.
21
Q
Capital adequacy ratio
A
.
22
Q
Secondary marketing
A
.
23
Q
Securitisation
A
.
24
Q
Special purpose vehicle (SPV)
A
.
25
Collateralised debt obligations
.
26
Co-ordination failure
.
27
Global systematically important banks (G-SIBs)
.
28
Macro-prudential regulation
.
29
Lender of last resort
.
30
Prudential control
.
31
Open market operations
.
32
Exchange equalisation account
.
33
Money market
.
34
Discount market
.
35
Rediscounting
.
36
Describe the functions of banks
.
37
Describe the liabilities and assets of retail banks
.
38
Explain the conflict between liquidity and profitability
.
39
Explain what is meant by capital adequacy and why it is important
.
40
Explain how secondary marketing can reconcile the conflicting objectives of liquidity and profitability
.
41
Explain the process of securitisation
.
42
Discuss the effects of securitisation
.
43
Explain the reasons for the financial crisis of 2008
.
44
Give examples of regulations introduced in response of the financial crisis
.
45
Describe the functions of the central bank
.
46
Describe the operation of the money market
.
47
Explain the ways in which the central bank can increase the liquidity of the banking system
.
48
Monetary base
.
49
Broad money
.
50
Bank multiplier
.
51
Money multiplier
.
52
Non-bank private sector
.
53
Quantitative easing (QE)
.
54
Financial instability hypothesis
.
55
Exogenous money supply
.
56
Endogenous money supply
.
57
Explain the credit creation process in theory
.
58
Explain the five main ways in which a change in the money supply could arise
.
59
Describe the three main motives for holding money
.
60
Discuss the five main factors affecting the demand for money
.
61
Explain the effect on interest rates of a change in the supply of money
.
62
Explain the effect on interest rates of a change in the demand for money
.
63
Equation of exchange
.
64
Velocity of circulation
.
65
Describe the effect of an increase in the money supply on the exchange rate and the balance of payments
.
66
State and describe the equation of exchange
.
67
Describe the effect of a change in the money supply on output and prices
.
68
Explain the transmission mechanisms that translate a change in the money supply to a change in GDP
.
69
Discuss the strengths of the links in the monetary transmission mechanisms
.
