This module builds on the previous discussion of bank notes by exploring checks and their usage in financial transactions. Participants will learn how checks function as a payment method, the process of clearing checks, and the importance of checks in the modern banking system.
This module serves as an introduction to the banking industry, focusing on how banks generate revenue through various means such as interest rates, fees, and services. It also examines the positive contributions of banks to society, including fostering economic growth and providing financial services to individuals and businesses.
This module delves into the income statement of a bank, providing insights into how banks report their financial performance. Participants will learn about key components like interest income, non-interest income, and expenses. Understanding these elements is crucial for analyzing a bank's profitability and operational efficiency.
This module introduces fractional reserve banking, a system where banks hold only a fraction of deposits as reserves. Students will learn about the multiplier effect, which shows how money supply is influenced by this practice. The module will also cover the implications for monetary policy and financial stability.
This module expands on the concept of money creation within a fractional reserve banking system. It describes the definitions of M0 and M1, outlining the various forms of money in circulation. Participants will gain insights into how banks can effectively create money through lending practices.
This module provides an introduction to bank notes, the physical currency we use in our daily transactions. It covers the historical development of bank notes, their security features, and the role they play in the economy. Understanding bank notes is essential for comprehending broader monetary systems.
This module builds on the previous discussion of bank notes by exploring checks and their usage in financial transactions. Participants will learn how checks function as a payment method, the process of clearing checks, and the importance of checks in the modern banking system.
This module explains how banks can extend loans without the physical backing of gold or other commodities. It emphasizes the role of trust and creditworthiness in the banking system and how modern banking practices have evolved to facilitate this process.
This module discusses reserve ratios, the percentage of deposits that banks are required to hold as reserves. It explores how these ratios influence lending capabilities and the overall money supply in the economy. Understanding reserve requirements is vital for grasping the banking system's regulatory environment.
This module further explores the concept of reserve ratios, specifically looking at their practical implications in banking. It demonstrates how reserve requirements can restrict a bank's ability to lend, affecting the financial system and economy at large.
This module introduces the concept of leverage in banking, discussing its benefits and potential risks. It covers how leverage can enhance returns but also leads to insolvency if mismanaged. Participants will understand the importance of balancing leverage in banking operations.
This module discusses the role of reserve banks, which serve as central banks for the banking system. It covers their functions, including regulating money supply, overseeing financial institutions, and acting as a lender of last resort. Understanding reserve banks is crucial for comprehending monetary policy.
This module provides insights into government debt and treasury securities. It explains the relationship between Federal Reserve Notes and government obligations, highlighting the role of treasuries in financing government operations and their implications for monetary policy.
This module covers open market operations, the primary tool used by central banks to influence the money supply. Participants will learn how these operations affect interest rates, bank reserves, and overall economic activity, illustrating the central bank's role in monetary policy.
This module explains how open market operations impact the Federal Funds rate, the interest rate at which banks lend to each other overnight. Participants will understand the significance of this rate for overall economic stability and its influence on monetary policy.
This module delves deeper into the mechanics of the Federal Funds rate, illustrating how changes in this rate can increase or decrease the money supply. Participants will learn about the implications of these changes for banks and the broader economy.
This module discusses the rationale behind targeting interest rates instead of directly managing the money supply. It explains the advantages of interest rate targeting for achieving economic stability and the central bank's goals.
This module addresses the transition away from the gold standard, explaining its implications for the banking system and monetary policy. Participants will explore the meaning of wealth in a fiat currency system and how this affects economic systems.
This module provides a big-picture discussion of various banking systems, weighing their pros and cons. It encourages critical thinking about the role of gold and other backing systems in modern banking, fostering a deeper understanding of financial systems.
This module introduces the concept of the discount rate, the interest rate charged by central banks to commercial banks for short-term loans. It discusses the importance of the discount window as a lender of last resort and its implications for financial stability.
This module covers the mechanics of repurchase agreements (repos), a form of short-term borrowing. It explains how these transactions work, their significance in the financial markets, and how they are used by banks and financial institutions for liquidity management.
This module provides an analysis of the Federal Reserve's balance sheet, focusing on its components and implications for monetary policy. Participants will learn about the Fed's assets, liabilities, and how these affect the economy.
This module critically examines the weaknesses of fractional reserve banking. It highlights the risks associated with this system, including bank runs and liquidity issues, as well as the implications for economic stability.
This module discusses deposit insurance and its role in the fractional reserve banking system. It addresses the FDIC's functions and the side effects of deposit insurance on banking behavior, including moral hazard and risk management.
This module summarizes the key points from the previous discussions on fractional reserve banking. It emphasizes the notion that this system acts as a subsidy to banks, allowing them to exploit yield curves for profit while posing risks to the economy.