Institutional Financial Management

Added on - 28 Jan 2020

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InstitutionalFinancialManagement
TABLE OF CONTENTSINTRODUCTION...............................................................................................................1ASSESSMENT 1...............................................................................................................1CONCLUSION...................................................................................................................9REFERENCES................................................................................................................10
INTRODUCTIONFinance is the lifeblood of every organization that assist in making optimumtransactions and carrying out its business activities in appropriate manner. The financialcrisis is a stark reminder that transparency and disclosure are crucial in today's globalmarket. Main aim of the present report is to present the functioning of financialintermediaries as well as the services provided by them(Brigham and Ehrhardt, 2013).It also highlights the key functioning of the Bank of England as well as the Federalreserve system.ASSESSMENT 1IntroductionBanks play an imperious role in the development and growth of the economy ofUK. For these purpose several financial intermediaries have been established so as toassist the firm in borrowing the money from it. Some of the essential role that a financialintermediary play in the benefit for the nation have been highlighted underneath:Role of Financial Institution in development of economy:These have recently been involved in creating self employment programmeswhich is the major sign of development of nation(McCahery, Sautner and Starks,2016). These institutes are usually in the form of banks, pension funds, investmentinstitutes, insurance company and building society. They provide finance to theindividuals so as to conduct the said programmes as well as raise the income andproduction which in turn leads to the growth and development projects.In the present21stcentury, wherein the political parties are unable to removepoverty from the country, these banks are laying significant efforts to remove the same.Therefore, it can be stated that financial intermediaries play a vital role in removing thepoverty situation from the rural or backward areas through significantly laying efforts inintroducing new schemes in which the agricultural sector can be benefited(Hotson andMills, 2015).There are varied firms that have been declared bankrupted. Therefore, in orderto remove their crises as well as to revive the enterprise back to the healthy one, thesebanks provided assistance in varied forms. They allow them to reallocate theirresources and also assist them with guidance to manage their operations.1
Likewise, pension institutes play an imperative role which aids in economicdevelopment of the nation. Herein these firms are involved in pooling the amount fromthe organization that assist the retired persons in managing their rest of life with theamount that is accumulated(Murphy and Senior, 2013).ConclusionTherefore, it can be stated that all the financial intermediaries play a vital role inthe economic development process of UK.IntroductionBank of England and Federal reserve system are the major central banks of theUnited Kingdom and United States respectively. The main purpose or role of both theinstitutes have been enumerated underneath.Role of Bank of EnglandThe bank of England is crucially important to the UK as it assist the economy ofthe nation to remain stable and also upheld the England policies. I plays varied roleswhich comprises of bankers to the government(Andréadès, 2013). Herein, the bankoperates and manages the large accounts as well as securities of the government anacts a central exchequer. Alike all other banks, it also provides financial assistance tothe citizens of the UK and plays a role of banks. It is also supreme to rest other financialinstitutes and is known as the lender of last resort.Key functions of Federal ReserveThe Fed is engaged in varied function which involves controlling the inflationrates through changing the monetary policy of the US. Currently it has aimed to setinflation target at 2 % as well as unemployment rate in the nation to 5.8%. It is alsoinvolved in protecting the rights of the consumers through regulating as well assupervising the other commercial banks in nation(Eichengreen and Flandreau, 2012).Fed also manages and controls the potential crises in the economy through creatingstabilization in financial market. Last but not the least, it also engaged in rendering theservices to another banks such as foreign and US government.ConclusionTherefore, it can be said that both the banks assist the government in creatingstability in its operations as well as economy.2
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