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14 Cards in this Set
- Front
- Back
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The ease of converting an asset into cash.
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Liquidity
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The risk that the sale price of an asset will be lower than the purchase price of that asset.
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price risk
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the concept that the cost reduction in trading and other transaction services results from increased efficiency when FIs perform these services.
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economies of scale
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An FI issues financial claims that are more attractive to household savers than the claims directly issued by corporations.
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asset transformer
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Securities issued by corporations and backed by the real assets of those corporations.
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primary securities
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Securities issued by FIs and backed by primary securities.
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Secondary securities
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Costs relating to the risk that the owners and managers of firms that receive savers funds will take actions with those funds contrary to the best interests of the saver.
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agency costs
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An economic agent appointed to act on behalf of smaller agents in collecting information an/or investing funds on their behalf.
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delegated monitor
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Reducing risk by holding a number of securities in a portfolio.
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diversify
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Action by an economic agent imposing costs on other economic agents.
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negative externalities
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The procedure by which a lender refuses to make loans to residents living inside given geographic boundaries.
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redlining
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The difference between the private costs of regulations and the private benefits for the producers of financial services.
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net regulatory burden
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The part of the money supply directly produced by the government or central bank, such as notes and coin.
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outside money
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The part of the money supply produced by the private banking system.
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inside money
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