1. Chapter 21: Learning Objectives  Other Financial Institutions: What Are They?  Insurance Industry: General Characteristics  Mutual Funds & Pension Funds: General Overview  Government Programs & Incentives

2. Other Financial Institutions  Financial and Leasing Corporations  Investment Dealers  Government Financial Institutions  Insurance Companies  Mutual Funds  Pension Funds

3. Investment Dealers  Underwrite securities  Also act as primary market dealers  Since the early 1990s have been largely bought out by Chartered banks  Serious regulatory issues have affected the industry in the 1990s

4. Government Financial Institutions  In theory, fill in gaps left behind by the private market either because of risk or low profitability  Examples include: CMHC, FBDB, EDC, FCC

5. Insurance Companies  Most are federally regulated  Separate Acts regulate domestic vs. foreign based companies  There are 2 types of cos.: Joint-stock (shareholder owned) & mutual cos (policy holder owned).  Assets must be sufficient to cover liabilities  segregated fund component acts like an intermediary by offering RRIFs  They have their own “protection” fund that acts like deposit insurance  Demutualization is the dominant current trend

6. Investment Funds & Cos  Mutual Funds Closed-end (fixed no. of shares) Open-end (no share limit) usually specialize (e.g., bonds, mortgages, etc.)  Pension funds Who operates them? Public vs. Private How are finds built up? Contributory vs. compulsory Who manages them? Trusteeship How are benefits paid? Defined (size & fund return) vs flat benefit (tenure)

7. Summary  There exist a large variety of public and private institutions which function as intermediaries but are not necessarily deposit-taking institutions  Public institutions attempt to fill a perceived void left by the private market either because risks are too high or anticipated profits too low  Other financial institutions include leasing cos., investment dealers, insurance companies, government financial institutions, mutual and pension funds