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.