Friday, November 30, 2007
International Regulators - Securities - 1
Bank regulators in various countries - list updated up to December 2010
Thursday, November 29, 2007
About the Blog
This blog is being developed by me as a supplement to Professor Bhole's book -
L M Bhole
Financial Institutions and Markets: Structure, Growth and Innovations.
This blog will contain the latest information and some explanation of the issues, which I feel participants in my class are not able to appreciate appropriately.
L M Bhole
Financial Institutions and Markets: Structure, Growth and Innovations.
This blog will contain the latest information and some explanation of the issues, which I feel participants in my class are not able to appreciate appropriately.
Introduction
This blog is being developed by me as a supplement to Professor Bhole's book -
L M Bhole
Financial Institutions and Markets: Structure, Growth and Innovations.
This blog will contain the latest information and some explanation of the issues, which I feel participants in my class are not able to appreciate appropriately.
L M Bhole
Financial Institutions and Markets: Structure, Growth and Innovations.
This blog will contain the latest information and some explanation of the issues, which I feel participants in my class are not able to appreciate appropriately.
Ch. 1 The Nature and Role of Financial System - Part 2
Financial System and Economic Development
In an examination conducted by me on 27/10/2007, I asked the question - Briefly explain the theories that explain the impact of financial development on savings and investment.
Many could not answer the question appropriately. They could not figure out the role of financial development.
Prior Savings Theory:
Bhole has written - "Financial system has both the scale and structure effect on savings and investment. It increases the rate of growth (volume) of saving and investment, and makes their composition, allocation, and utilisation more optimal and efficient. It activises saving or reduces idle saving;it also reduces unfructified investment and the cost of transferring saving to investment."
Credit Creation Theory:
In this it is emphasized by Bhole that, the contribution of a financial system to growth goes beyond increasing prior-saving-based investment. According to the thought emphasized by Kalechi and Schumpeter, the financial system plays a positive and catalytic role by providing finance or credit through creation of credit in anticipation of savings. This, to a certain extent, ensures the independence of investment from saving in a given period of time. The investment financed through created credit generates the appropriate level of income which, in turn leads to an amount of savings which are equal to the investment already undertaken.
Theory of Forced Savings:
In this approach the argument is that investment can be increased autonomously through monetary expansion. Monetary expansion is made possible by bank money. A well developed banking system facilitates monetary expansion.
Financial Regulation Theory:
The important point to note is that regulation is a part of the financial system. This theory especially emphasizes the positive benefits of specific regulatory actions. For example, government has to ensure that payments system does not have any problem. It points areas where regulation improves savings and investment.
Financial Liberalisation Theory:
This theory may not be an opposing theory to regulation theory. But it points out that if a financial system is repressed then it cannot serve the society in optimal manner. This theory calls for an evaluation of financial systems to examine whether they are repressed.
In an examination conducted by me on 27/10/2007, I asked the question - Briefly explain the theories that explain the impact of financial development on savings and investment.
Many could not answer the question appropriately. They could not figure out the role of financial development.
Prior Savings Theory:
Bhole has written - "Financial system has both the scale and structure effect on savings and investment. It increases the rate of growth (volume) of saving and investment, and makes their composition, allocation, and utilisation more optimal and efficient. It activises saving or reduces idle saving;it also reduces unfructified investment and the cost of transferring saving to investment."
Credit Creation Theory:
In this it is emphasized by Bhole that, the contribution of a financial system to growth goes beyond increasing prior-saving-based investment. According to the thought emphasized by Kalechi and Schumpeter, the financial system plays a positive and catalytic role by providing finance or credit through creation of credit in anticipation of savings. This, to a certain extent, ensures the independence of investment from saving in a given period of time. The investment financed through created credit generates the appropriate level of income which, in turn leads to an amount of savings which are equal to the investment already undertaken.
Theory of Forced Savings:
In this approach the argument is that investment can be increased autonomously through monetary expansion. Monetary expansion is made possible by bank money. A well developed banking system facilitates monetary expansion.
Financial Regulation Theory:
The important point to note is that regulation is a part of the financial system. This theory especially emphasizes the positive benefits of specific regulatory actions. For example, government has to ensure that payments system does not have any problem. It points areas where regulation improves savings and investment.
Financial Liberalisation Theory:
This theory may not be an opposing theory to regulation theory. But it points out that if a financial system is repressed then it cannot serve the society in optimal manner. This theory calls for an evaluation of financial systems to examine whether they are repressed.
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