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Taxonomy of Financial Intermediaries

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Commercial Banks
Depository Institution
Depository Institution
Savings and Loan Associations (S&Ls) and Mutual Savings Banks
Credit Unions
very small institutions which acquire funds from deposits and primarily make consumer loans
Life Insurance Companies
Contractual Savings Institution
Contractual Savings Institution
Fire and Casualty Insurance Companies
Finance companies
These also help corporations raise money, but also make loans to individuals.
Mutual Funds
These are companies or divisions of an investment bank that sell shares of itself to investors and then use the proceeds to invest in different company stocks
Investment Intermediary
Money Market Mutual Funds
Investment Banks
Investment Intermediary
financial intermediation
the process of indirect finance whereby financial intermediaries link lender savers and borrower spenders
Transaction Costs
the time and money spent to carry out a financial transaction
economies of scale
the reduction in transaction costs per dollar of transaction as the scale of transactions increases
Liquidity Services
services that make it easier for customers to conduct transactions
risk sharing
occurs when firms create and sell assets that are less risky and use proceeds to buy riskier assets
investing in a portfolio whose returns do not always move together with the result that overall risk is lower than for individual assets ( You shouldn't put all your eggs in one basket)
Asymmetric Information
imperfect information
Adverse Selection
This happens before the transaction
moral hazard
the risk that one party to a transaction will engage in behavior that is undesirable from the other party's point of view
economies of scope
the ability to use one resource to provide many different products and services
conflicts of interest
can arise when a financial institution provides multiple services, leading to misleading or multiple services, leading to misleading or concealing of some information
Overdraft facility
Short term use
Trade credit
Short term use for full settlement between 7-60 days
Short to medium term use
Hire purchase
Short to medium term use
Term loan/advance
Medium to long term
wealth that is used to produce more wealth
Financial intermediary
an institution acts as a service for both those who have extra money to save or lend and channels it to those who wish to invest or borrow.
Pension Funds
These acquire funds by periodic contributions from employers or
Savings and loan
depository financial institutions that specialize in home mortgage loans.
Depository institutions that include savings and loans, savings banks, and credit unions. They specialize in saving accounts and real estate financing.
the amount of money borrowed in a loan of the amount of your money in savings account that is earning interest
Foundational Knowledge
Understanding and remembering information and ideas
Connecting ideas, people and realms of life
Human Dimension
Learning about oneself and others
Developing new feelings, interests and values
Learning How to Learn
Becoming a better student
evaluation group
primary purpose is assessment
task-oriented groups
purpose=assist members in becoming aware of their needs, values, ideas, and feelings through the performance of a shared task; Purpose is to focus on the here and now, involve learning through doing activity, and process…
developmental groups
purpose=to assist members to acquire and develop group interaction skills
parallel group
individual tasks with minimal interaction required; leader provides unconditional positive regard
project group
common, short-term activities requiring some interaction and cooperation; leader reinforces cooperation, mild competition, sharing and interaction
egocentric cooperative group
joint interaction on long-term tasks; members are beginning to express needs and address needs of others
cooperative group
work together cooperatively to enjoy each other's company and meet emotional needs
mature group
responsive to all members' needs and can carry out a variety of tasks
thematic groups
learn a specific skill
topical groups
focus on discussion of activities and issues outside of the group that are current or anticipated
instrumental groups
concerned with meeting health needs and maintaining function
evaluative group leader
selects and orients clients to group's purpose; selects activities and provides needed supplies; does not participate or intervene in group; observes interaction and functional skill level
activities for evaluative group
can be completed in one session; require interaction to complete
thematic group leader
selects, structures, and grades suitable activities to teach needed skills; reinforces skill development;
activities for thematic group
activity enables members to practice and learn needed skills, attitudes and knowledge; activity is directly related to the skills needed to perform the activity; outside of the group (ex:cooking group)
topical group leader
facilitates group discussion while maintaining focus on topic; helps members problem-solve; reinforces skill acquisition; shares leadership with members; acts as a role model
activities for topical groups
verbal discussion on a circumscribed activity that members are engaged in or will be engaged in outside of group (ex: parenting group, discharge from hospital)
task-oriented group leader
very active leader who defines group goals and structure; facilitates discussion; gives feedback and support; assists members in exploring relationships between thoughts, feelings and actions; encourages members to experiment with new behavior patterns;
activities for task-oriented groups
chosen by members; create and end product or demonstrable service for the group or for persons outside the group; activities/task is a means to study, understand and practice behavior
developmental group leader
orients members to group's goals, structure and norms; lower level groups=direct leadership; mature groups=leadership shared with members
instrumental group leader
provide unconditional positive regard, support and structure to create comfortable, safe environment; selects activities to meet member's health needs and maintain highest possible level of function; make no attempt to change client
activities for instrumental group
non-threatening/non-demanding; interesting and enjoyable; fun, socialization; provide sensory, cognitive, perceptual-motor and social input