Financial System

Introduction to Financial
Landscape
Agenda

In this session, you will learn about:

• Basics of Financial System

• Evolution of Financial System
• Objectives and Role of Financial System
• Structure and Components of Financial System
Introduction

Barter System

Buyer Items to trade Seller

Rules that regulate the exchange

How Money Came into the Picture?

China was the first country to use recognizable coins.

Sometime around 1,100 B.C., the Chinese moved from
using actual tools and weapons as a medium of exchange
to using miniature replicas of the same tools cast in
bronze.

The First Minted Coins:

In 600 B.C., Lydia's King
Alyattes minted the first
official currency.

Paper Currency:
Paper bills were first used by the
Chinese, who started carrying
folding money during the Tang
Dynasty (A.D. 618-907)
What is a Financial System?

Q What is a financial system?

It is an organized and regulated structure

where exchange of funds take place
between the lenders and borrowers.
Components of a Financial System
A Financial System is a system that brings together Financial Participants,
Markets, Products, and Services.

PARTICIPANTS MARKETS PRODUCTS SERVICES

FINANCIAL SYSTEM
Goal of Financial System

GOAL
The primary goal of a financial system is
accelerated growth of an economy.
Objectives of Financial System

Saving Mobilization Investments National Growth

Prices in a Financial Market

MARKET
External Socio-
SUPPLY
MARKET Political Factors
DEMAND

Prices
Functions of Financial System

Functions of a Financial System

Play the role of

Facilitate the flow of Monitor and regulate
intermediaries to
funds to finance the participants in the
determine the flow of
investments financial system
funds
How Financial System Works?

Indirect Finance

Financial
Funds Intermediaries Funds

Funds

Lenders Borrowers
Savers Spenders
Households Financial Households
Funds Funds
Business markets Business firms
Governments Governments
Foreigners Foreigners
Direct Finance
Structure of the Modern Financial System

Financial System

Financial Financial Financial Financial Financial

Market Instruments Participants Regulator Services
Structure of Financial Market

Financial System

Financial Financial Financial Financial Financial

Market Instruments Participants Regulator Services

Derivatives
Capital Market Money Market FX Market
Market

Primary Secondary Treasury Certificate Call/Notice Commercial

Market Market Bills of Deposit Money Papers

Debt Equity
Market Market
Instruments Offered in Financial Markets

Financial System

Financial Financial Financial Financial Financial

Market Instruments Participants Regulator Services

Foreign Money Market

Stocks Bonds Derivatives Commodities
Exchange Instruments
Financial Participants

Financial System

Financial Financial Financial Financial Financial

Market Instruments Participants Regulator Services

Brokers
Issuers Investors and Depositories Custodians Registrars
Dealers

Lead Depository
Managers Participants
Financial Regulators

Financial System

Financial Financial Financial Financial Financial

Market Instruments Participants Regulator Services

India US UK

Markets:
Banks: Banks: Federal Markets: Markets: FCA
Securities & Banks: Bank
Reserve Reserve Securities / Prudential
Exchange of England /
Bank of India & Pension Co’s Exchange Regulatory
Board of FCA
Commission Authority
India
Financial Services Offered

Financial System

Financial Financial Financial Financial Financial

Market Instruments Participants Regulator Services

Mergers & Research & Sales & Market

Acquisition Advise Underwriting Trading Making

Specialized
Asset
Financial
Management
Solutions
Thank You

Mumbai | Bangalore | Pune | Chennai | Jaipur

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