Chapter 9 FINANCIAL INTERMEDIATION
Savings and loan association
accumulate savings of their depositors/stockholders and use these accumulated savings, together with their capital for the loans that they grant and for investments in government and private securities.
Expanded commercial banks/universal banks
also cal unibanks and perform investment service
Open-end investments companies
also called mutual funds,they issue new shares whenever one wants to buy them and repurchase shares whenever an investors wants to sell them
Commercial finance companies
also known as business finance companies , grant credit to businesses.
Pawnshops
are agencies where people and some small businesses "pawn" their assets in exchange of amount much smaller than the value of the asset or use their assets as collateral for a loan.
Savings and mortage banks
are banks specializing in granting mortage loans other than the basic function of accepting deposits.
Mutual fund companies
are companies engaged in the mutual funds market.
Credit unions
are cooperatives organized by people from the same organization .
Investments companies
are financial intermediaries tgat pool relatively small amounts of investor's money to finance large portfolios of investments that justify the cost of professional management.
Lending investors
are individuals or companies who loan funds to borrowers ,generally consumers or households.
Securities dealers
are market specialist that sell securities issued by other firms.
Rural banks and cooperative banks
are more popular type of bank in the rural communities.
Community banks
are often called regional and super-regional banks.
Copperative banks
are often created by persons belonging to the same local or professional community or sharing a common interest.
Securities brokers
are only compensated by means of commission.
Finace companies
are profit-oriented finacial institutions that borrow and lend funds to household and businesses.
Microfinace thrift banks
are small thrift banks that cater to small,micro, and cottage industries, hence, the term "micro"
Long term care (LTC)
Is defined as a need for assistance with some of the activities of daily living.
NOW accounts
banks offering interest on these checking or current accounts.
Private development banks
cater to the needs of agriculture and industry providing them with reasonable rate loans for medium- and long term purposes.
Home owners insurance
insurance for house and its contents.
Money market mutual funds
invest in high-quality short term securities.
Loan
is a secondary security
Windstorm insurance
is a seperate type of coverage that protects one's home or business against wind damage.
Professional liability insurance
is a specialty coverage not covered under any property or homeowners endorsements.
Health insurance
is a type of insurance that pays for medical expenses in exchange of premiums.
Branch
is an independent unit of the headoffice performing all the functions and offers the service facilities of the head office.
Credit insurance
is an optional protection purchased from lenders and is often associated with mortgages, loans, or credit cards.
Thrift banking system
is composed of savings and mortage banks,private development,banks stock savings and loan associations, and microfinance thrift banks.
Closed-end investment companies
issued a fixed number of shares which tey sell to the public to raise money to purchased investments.
Casualty insurance
it provides help if a person meets an accident.
Proper/casualty insurance companies
offer protection against pure risk
Secondary instruments
own financial instruments
Ordinary commercial banks
perform the more simple functions of accepting deposits and granting loans
Sales finance companies
provide installments credit to buyers of big-ticket items like cars and household appliances
Umbrella liability policy
refers to an additional policy that starts when other's insurance policy has reached its limit.
Time deposit
refers to deposit that has maturity period.
Depository institution
refers to financial institution that accepts deposits from surplus units.
Pension Funds companies
sell contracts to provide income to policyholders during their retirement years.
Spread
the difference between the two rates
Direct Finance
the relationship or transaction between the bank and the depositors
Investment banks
underwrite new issues of equity and debt securities.
Cash surrender value
- is the amount that will be given to the insured or beneficiary if the insured or beneficiary decides to surrender the policy before the term ends.
Open market securities
Direct securities or primary securities such as stocks and bonds sold in the open market through market specialist are also termed _________________.
Accident insurance
a special type of life insurance that insures against death or disability caused by accidents.
Bank regulation
consist of the administration of laws in the form of rules and regulation that govern the conduct of banking and the structure of the banking industry.
Banks supervision
deals with ensuring the soundness and safety banks
Financial intermediaries
financial institutions that act as the bridge between investors or saver and borrowers or security issuers
Life insurance companies
financial intermediaries that sell life insurance policies.
Consumer finance companies -
grant credit to consumer.
Pension plan
helps employees to balance planned consumption upon retirement with the amount of saving set aside today.