I. B ANKOK Overview and Introduction to Financial System

Introduction Core books Requirements Presentation, evaluation Overview on the whole financial system Historical background of money

I NTRODUCTION 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; Consultations: at EII.39 on Thuesdays at Materials: Sharepoint Pénzügy Tanszék Angol tagozat Introduction to Finance file & Coospace: Introduction to Finance file

C ORE BOOKS Lawrence J. Gitman: Principles of Managerial Finance, Addison - Wesley 10th Edition Brealey and Myers: Principles of corporate Finance, West Publishing Company György Székely: The Essence of Money and Banking A Handbook for Financial Managers. KJK-Kerszöv Kft Stephen Valdez: An Introduction to Global Financial Markets, Macmillan Press Ltd.1997

R EQUIREMENTS 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) Presentations alternatively (10-15 minutes) in lecture (max. +15 points) – topics are related to lectures’ themes

P RESENTATION 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

O VERVIEW 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

F INANCIAL 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

M ONEY SUPPLY AND DEMAND 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

I NTERMEDIARIES Intermediaries (pénzügyi közvetítők)– financial institutes Investment funds, Mutual funds Pension funds Insurrance companies Commercial banks

Financial Institutions Indirect money flow Money supply H OUSEHOLDS Government Businesses Direct money flow Financial Markets (exchanges,OTC) Direct money flow Money demand Companies Government Municipalities, Non-profit sphere, Fundations Households Indirect money flow

F INANCIAL 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

I NVESTMENT DECISION Market situation- the pyramid Instruments as a legal claim (two main types: bond and share) Participants ( bearish and bullish traders and speculators) Institutions and regulations

M ATERIALS 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 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.

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