1 / 16

Chapter Eighteen

Chapter Eighteen. Understanding Money, Banking, and Credit. 18 | 1. Learning Objectives. Identify the functions and characteristics of money Summarize how the Federal Reserve System regulates the money supply in order to maintain a healthy economy

fay
Download Presentation

Chapter Eighteen

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Chapter Eighteen Understanding Money, Banking, and Credit 18 | 1

  2. Learning Objectives • Identify the functions and characteristics of money • Summarize how the Federal Reserve System regulates the money supply in order to maintain a healthy economy • Describe the organizations involved in the banking industry • Identify the services provided by financial institutions • Understand how financial institutions are changing to meet the needs of domestic and international customers • Explain how deposit insurance protects customers • Discuss the importance of credit and credit management 18 | 2

  3. The Great Recession • Be prepared to discuss the Great Recession, the most recent severe global economic recession • How severe was it? • What triggered the wave in foreclosures? • Why did so many people and businesses have to file for bankruptcy? • Why is borrowing money more difficult in a recession? 18 | 3

  4. What Is Money? • Define • Barter System • Money • Consumer Price Index • Purchasing Power • Know the Functions of Money • Medium of Exchange • Measure of Value • Store of Value 18 | 4

  5. Characteristics of Money • Know the key Characteristics of Money • Divisibility • Portability • Stability • Durability • Difficulty of Counterfeiting 18 | 5

  6. The Supply of Money: M1 and M2 • Define • Demand Deposit • Time Deposit • What are the twoMain Measures of the Supply of Money? Be able to contrast them • M1 • M2 18 | 6

  7. The Federal Reserve System • Be prepared to explain what The Federal Reserve System is and what it does • What was the Fed’s response to the most recent economic crisis? • How does the Fed regulateReserve Requirements and make more orless required reserves? • How does the Fed regulate the Discount Rate? • Why is it important to regulate the discount rate? • What is involved in the Fed’s Open Market Operations? • What other responsibilities does the Fed have? 18 | 7

  8. The American Banking Industry • Define • Commercial Bank • National Bank • State Bank • Savings and Loan Associations (S&Ls) • Credit Unions • Mutual Savings Banks • Insurance Companies • Pension Funds • Brokerage Firms • Finance Companies • Investment Banking Firms 18 | 8

  9. Careers in Banking • Know the traits of successful bankers • Honesty • Ability to interact with people • Strong background in accounting • Appreciation for the banking-finance relationship • Basic computer skills 18 | 9

  10. Services Provided by Financial Institutions • Be familiar with Traditional Services Provided by Financial Institutions • Checking Accounts • Check • NOW Accounts • Savings Accounts • Passbook Savings Account • Certificate of Deposit (CD) • Short- and Long-Term Loans • Line of Credit • Revolving Credit Agreement • Collateral • Credit-Card versus Debit Card Transactions • What are some Electronic Services and International Services provided by financial institutions? 18 | 10

  11. Changes to the Banking Industry • Be prepared to discuss Anticipated Changes in the Banking Industry • What global events and trends have changed and are changing the banking industry? • Globalization • Economic Cycle • Technology • Consumer Demands • Regulatory Issues 18 | 11

  12. Online and International Banking • Know the advantagesand disadvantagesof Online Banking • Define Electronic Funds Transfer (EFT) System • How has this system changed how banks do business? • Automated Teller Machines (ATMs) • Automated Clearinghouses (ACHs) • Point-of-Sale (POS) Terminals • Electronic Check Conversion (ECC) • Know the popular methods of paying for Import and Export Transactions • Letter of Credit • Banker’s Acceptance • Currency Exchange 18 | 12

  13. The FDIC and NCUA • Define and give a brief history and overview of • Federal Deposit Insurance Corporation (FDIC) • National Credit Union Association (NCUA) • How much is each FDIC orNCUA account insured to? 18 | 13

  14. Effective Credit Management • Define • Credit • Borrower • Lender • Be prepared to discuss how Individualsand Businessescan get money/loans from a bank after a credit crisis • Know the Five Csof Credit Management • Character • Capacity • Capital • Collateral • Conditions 18 | 14

  15. Checking Credit Information • Know some reliable Credit Information Sources regardingBusinesses andIndividuals • Be prepared to explain the Fair Credit Reporting Act • What is the Credit Card Act of 2009? • How are the Fair Credit Reporting Act and the Credit Card Act of 2009 different? • What are they designed to do? 18 | 15

  16. Sound Collection Procedures • Be prepared to discuss Sound Collection Procedures • What are effective Collection Techniques? 18 | 16

More Related