CONTENTS

PART I THE FINANCIAL SYSTEM

Chapter 1 An Overview of Financial Markets and Institutions

Chapter Preview

Learning Objectives

1.1 The Financial System

1.2 Financial Markets and Direct Financing

Do You Understand?

PEOPLE & EVENTS: Wall Street Faces Global Competition

1.3 Types of Financial Markets

1.4 The Money Markets

1.5 The Capital Markets

Do You Understand?

1.6 Financial Intermediaries and Indirect Financing

Do You Understand?

1.7 Types of Financial Intermediaries

Do You Understand?

1.8 The Risks Financial Institutions Manage

1.9 Regulation of the Financial System

Do You Understand?

Summary of Learning Objectives

Key Terms

Questions and Problems

Internet Exercise

Chapter 2 The Federal Reserve and Its Powers

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Learning Objectives

2.1 Origins of the Federal Reserve System

PEOPLE & EVENTS: Free Banking and Wildcat Banks

2.2 The Current Structure of the Fed

2.3 Monetary Powers of the Board of Governors

2.4 The Fed’s Regulatory Powers

2.5 Independence of the Fed

Do You Understand?

2.6 The Fed’s Balance Sheet

Learning by Doing 2.1: Computing a Bank’s Excess Reserve Position

2.7 The Fed’s Role In Check Clearing

2.8 Federal Reserve Tools of Monetary Policy

PEOPLE & EVENTS: A Contrast in Style: Greenspan Versus Bernanke

Learning by Doing 2.2: Calculating a Bank’s Reserve Position

Summary of Learning Objectives

Key Terms

Questions and Problems

Internet Exercise

Chapter 3 The Fed and Interest Rates

Chapter Preview

Learning Objectives

3.1 Federal Reserve Control of ...

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