The goal of this book is to present the financial institutions with their leading part in the monetary problematic.
At the end of this course, the student would be able:
- To distinguish the nature and the own part of each kind of financial institutions,
- To present the Bank of Canada, the Ameriacan Federal Reserve Board and the Québec Desjardins Central Credit Union,
- To explain the money multiplier and the monetary mass control mecanisms by the Bank of Canada and
- To present the problematic ant the monetary theories, and their monetarist and keynesian interpretations.
Traditionally, economists recognize four differents kinds of financial institutions: the banks, the insurances, the trusts and the brokers.
Up to the end of the previous century, mainly in the 1980, these institutions needed to keep themselves away from one another, in order to avoid any conflit of interest like those that brought the 1929 Crisis and the Great Depression that followed. Meanwhile, most of these rules concerning the financial institutions have been erased, it's the deregulation and the decompartmentalization. This means that almost (there are a few exceptions) any financial institution may now control any other financial institution in a different sector, as a bank may control a broker or a trust, for exemple. I'm asking myself if the new financial crisis of 2007 is not caused by these deregulations.
On the other way, these differents kinds of financial institutions are not of the same size. Without any doubt, the most important are the banks. All the ofàthers are less important, but their roles are fondamental, each one in its sector.