Bretton Woods international monetary system.

The international monetary system (IMS): a set of practices, rules and institutions aimed at organizing and monitoring monetary exchanges and financial flows between countries.  This system of is generally defined as international payments and exchange rates between national currencies allows transactions between countries. Through history the world has known different monetary systems, one of the … Continue reading Bretton Woods international monetary system.

Factors affecting bank liquidity.

Commercial banks liquidity, a measure of the cash and other assets banks have available to pay bills and meet short-term business and financial obligations, is not stable. It varies according to different factors: bank liquidity factors. In fact, the factors of bank liquidity are the set of events that affect banks’ liquidity and constrain them … Continue reading Factors affecting bank liquidity.

Mechanisms of monetary creation.

Monetary creation consists of increasing the quantity of money held by non-financial agents (NFA). Indeed, within the economy the quantity of money in circulation is not stable.  Its variation has significant meaning.  When we observe in a given period a positive variation of the monetary aggregate we speak of money creation. It is the putting … Continue reading Mechanisms of monetary creation.

Financial reporting.

Financial reporting: practices that help summarize the financial information of the company and provide a honest and transparent view of its financial situation and performance to the stakeholders.Stakeholders include owners, managers, employees, investors, institutions and  government who need the valuable information offered by financial reports about investments, credit extensions, cash flow in… to be able … Continue reading Financial reporting.

Commercial banks

Commercial banks, one of the major components of any economy in the world, in this article we will discuss some of their functions and how important is their role in the economic cycle . Commercial banks are financial institutions that accept deposits, grant loans and offer basic financial products.Commercial banks earnings are mainly interests from … Continue reading Commercial banks

Central banks and monetary policy

Central banks are public institutions that deal only with commercial banks (lend them money and hold their extra money) they have no borrowing-lending relationships with governments and people. Central banks are usually institutionally independent from political interference.2 categories of central banks are distinguished in the world:– Single mandate banks: they only target inflation (like the European central … Continue reading Central banks and monetary policy