Money and Interest Rates - The financial system

5 important questions on Money and Interest Rates - The financial system

What is the role of the financial sector? Name 4. 

1. Expert advice
2. Expertise in channeling funds
3. Maturity transformation
4. Risk transformation

What is retail banking?

Branch, telephone, postal and interest banking for individuals and businesses at published rates of interest and charges. Retail banking involves the operation of extensive branch networks. 

What is wholesale banking?

Where banks deal in large-scale deposits and loans, mainly with companies and other banks and financial institutions. Interest rates and charges may be negotiable. 
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Name 7 types of assets a bank has?

1. Notes and coin
2. Balances with the central bank
3. Market loans
4. Bills of exchange
5. Reverse repos
6. Advances to customers 
7. Investments

What are the 4 main objectives of the central bank? 

1. A banker to the government, banks and various other central banks
2. Managing government's borrowing programme 
3. Ensures sufficiënt liquidity for the financial sector 
4. Operates the country's monetary and exchange rate policy

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