2. MONEY
• Any object that is portable, divisible, durable
and stable and that serves as medium of
exchange, a store of value and a unit of
account.
• M1 (CURRENCY /Cash/Demand Deposits)
• M2 (Include M1/ Time Deposits)
• Plastic Money

3. FINANCIAL INSTITUTIONS
Depository institution Non-depository institution
1.Banks; 1.Development banks;
2.Saving associations; 2.State banks;
3.Loan associations; 3.Insurance companies;
4.Credit unions; 4.Investment banks;
5.Credit societies; 5.Brokerage houses;

4. HOW BANK CREATE MONEY ?
Financial activities of a conventional bank
LEND LEND
DEPOSITORS BANK CUSTOMERS
INTEREST INTEREST

5. CENTRAL Reserve System
• Central Bank of the country , which acts as a
government bank, serves member commercial
banks and controls the nation’s money supply.
• The Government’s Bank.
• The Banker’s Bank.
• Check Clearing.

6. TOOLS Of CENTRAL BANK
• Reserve requirements.
• Discount Rate controlling.
• Open market Operations.
• Selective Credit Controls.

7. CHANGES IN FINANCIAL INDUSTRY
1. Deregulation
2. Interstate Banking
3. The Impact of Electronic Technologies
 Debit Card
Smart Card
E Banking

9. International Banking & Finance
• It is an organization that invests directly in
private companies and makes or guarantees
loans to private investors.
• It is affiliated t the World Bank and is part of
the World Bank Group Abbreviation.
Exchange Rate:
• Rate at which one currency exchanges against
other currency.

10. International Trade
• The business of buying ad selling commodities
beyond national borders.
Government Influences on Exchange Rates:
• A nation’s economic authorities take action to
correct its balance of payments condition.
Typically they will devalue or revalue the
nation’s currency.

11. International Bank Structure
• The World Bank & The IMF
To promote the stability of exchange rates
To provide temporary, short term loans to
member countries
To encourage members to cooperate on
International monetary issue.
To encourage development of a system for
international payments.