I. BANKOK
2016.03.14.
1
Overview and Introduction to
Financial System
Overview and Introduction to Financial
System
• Introduction
Core books
Requirements
Presentation, evaluation
• Overview on the whole financial system
• Historical background of money
INTRODUCTION
Course: Introduction to Finance
 Department: Finance, EII.37
 Head of Department.: Dr. Vígvári, András
 Secretary: Zsuzsanna Rébel EII.37
 Subject coordinator teacher: Andrea Vallyon, EII.39;
vallyon.andrea@bgf.kkfk.hu, vallyon.andi@gmail.com
 Consultations: at EII.39 on Thuesdays at 14.50-16.10
 Materials: Sharepoint
Pénzügy Tanszék Angol
tagozat Introduction to Finance file &
 Coospace: Introduction to Finance file

CORE BOOKS
Lawrence J. Gitman: Principles of Managerial Finance,
Addison - Wesley 10th Edition
http://wps.aw.com/aw_gitman_pmf_11
 Brealey and Myers: Principles of corporate Finance,
West Publishing Company

www.mhhe.com/business/finance
György Székely: The Essence of Money and Banking
 A Handbook for Financial Managers. KJK-Kerszöv Kft.
2002.
 Stephen Valdez: An Introduction to Global Financial
Markets, Macmillan Press Ltd.1997

REQUIREMENTS

To pass
 Successful written exam ( 56 points from 100 points )
 3 parts:
Test questions ( pre-exam: Dec. 14)
 Calculations ( Oct. 26)
 Essay (pre-exam: Dec. 14)
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
Presentations alternatively (10-15 minutes) in lecture
(max. +15 points) – topics are related to lectures’
themes
PRESENTATION
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
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Alternative
Could be made in pairs
Max 15 minutes, one per
each lecture
Hand-out + Power Point
Application for
presentation: after the
lecture
Topics ( see sharepoint)
Evaluation: presentation
skills + hand-out materials
OVERVIEW AND
WELCOME!
What does financial system mean in the economy?
 What is its task? – determinations
 Who are the participants?
 Direct and indirect flow of capital
 What are the instruments in the financial
markets?
 Different markets and tasks
 Investment decision from the private investor’s
place

FINANCIAL SYSTEM
Markets
 Instruments
 Rules, acts, regulations
 Institutes
 People
 Techniques
 Money and capital connections in the economy

FINANCIAL INSTITUTIONS AND ITS ENVIRONMENT
INTERNATIONAL ENVIRONMENT,
INTERNATIONAL INSTITUTIONS
PARLIAMENT, ACTS,REGULATIONS
STATE BUDGET
SUPERVISORY
INSTITUTIONS,
AUTHORITIES
CENTRAL BANK
FINANCIAL
INSTITUTIONS
MONEY SUPPLY AND DEMAND
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
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Borrowers and lenders – supply and demand
Borrowers
 Individuals
 Companies
 Government
 Public corporations
 Municipalities
Lenders: individuals (and companies)
 Deposit in Commercial bank
 Shareholder
 Investment funds, mutual funds
 pension funds
 Insurrance companies
INTERMEDIARIES

Intermediaries (pénzügyi közvetítők)– financial
institutes
 Investment funds,
 Mutual funds
 Pension funds
 Insurrance companies
 Commercial banks
Financial
Institutions
2016.03.14.
Money
demand
Companies
Money supply
HOUSEHOLDS
Government
Government
Municipalities,
Non-profit sphere,
Fundations
Businesses
Households
Financial
Markets
(exchanges,OTC)
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FINANCIAL INSTRUMENTS AND FINANCIAL MARKETS

Securities
 Freely bought and sold
 Shares, preference shares
 Corporate and goverment
bonds, eurobonds
 T-bills
 certificate of deposit,
commercial papers
Financial markets
- primary
- secondary
INVESTMENT DECISION
Market situation- the
pyramid
 Instruments as a legal
claim
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
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Participants

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(two main types: bond
and share)
( bearish and bullish
traders and speculators)
Institutions and
regulations
MATERIALS FOR THE TOPIC
Stephen Valdez: An Introduction to Global Financial
Markets,Macmillan Press Ltd.1997 – chapter 1
 György Székely: The Essence of Money and Banking
A Handbook for Financial Managers. KJK-Kerszöv Kft.
2002.
 Lawrence J. Gitman: Principles of Managerial Finance,
Addison - Wesley 10th Edition – see sharepoint:
CH1:21-28old.
 Sharepoint: Keown CH2 Financial markets and interest
rates
 Lecture 1. ppt.

THANK YOU