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Lecture 01 islamic financial institutions and markets (ge30003)


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Lecture 01 islamic financial institutions and markets (ge30003)

  1. 1. The Functions of Financial Institutions and Markets ( Topic 01 ) Main Reference International Centre for Education in Islamic Finance. (2006). Islamic Financial Institutions and Markets. .Kuala Lumpur: INCEIF
  2. 2. Synopsis <ul><li>Introduction </li></ul><ul><li>History </li></ul><ul><li>Creating and Transferring Money </li></ul><ul><li>Accumulating and lending savings </li></ul><ul><li>Marketing and Transferring Financial assets </li></ul><ul><li>Financial Planning </li></ul><ul><li>Summary </li></ul>
  3. 3. Introduction <ul><li>Financial market </li></ul><ul><li>Financial Institutions </li></ul><ul><li>Surplus and Deficit Units </li></ul>
  4. 4. History and development <ul><li>The basic Stage </li></ul><ul><li>-----Barter Trading </li></ul><ul><li>-----Commodity Money </li></ul>
  5. 5. History and development <ul><li>The Second Stage </li></ul><ul><li>-----Primary Debt </li></ul><ul><li>Limitations: </li></ul><ul><li>i. Maturity Problem </li></ul><ul><li>ii. Default risk </li></ul><ul><li>iii. Liquidity problem </li></ul>
  6. 6. History and development <ul><li>The Third Stage </li></ul><ul><li>-----Conventional </li></ul>
  7. 7. History and development <ul><li>The Current Stage </li></ul><ul><li>--Savings and Credit markets </li></ul><ul><li>---Money and Capital Market </li></ul>
  8. 8. Crating and Transferring money: <ul><li>Money: </li></ul><ul><li>---Medium of Exchange </li></ul><ul><li>---Unit of Account </li></ul><ul><li>----Store of value </li></ul><ul><li>Money Creation: </li></ul><ul><li>---Deposit Expansion Multiplier </li></ul><ul><li>--- Effect on Economy </li></ul>
  9. 9. Transferring money: <ul><li>Cash </li></ul><ul><li>Cheque </li></ul><ul><li>Electronic means of Payments </li></ul><ul><li>---Direct Funds Transfer </li></ul><ul><li>---Payments cards </li></ul>
  10. 10. Accumulating and lending Savings: <ul><li>Household Sector </li></ul><ul><li>Corporate sector </li></ul><ul><li>Government sector </li></ul><ul><li>Foreign Sector </li></ul>
  11. 11. Marketing and Transferring financial Assets <ul><li>Limitations of Tangible assets </li></ul><ul><li>Benefits of Financial assets </li></ul>
  12. 12. Financial Planning <ul><li>Convenience </li></ul><ul><li>Protection against fraud </li></ul><ul><li>Quality of Investment Selection </li></ul><ul><li>Low transaction cost </li></ul>
  13. 13. End <ul><li>Q&A </li></ul>