1. The document outlines the structure of the financial system including the macro structure with households participating in financial and real activities by holding financial assets/liabilities like bonds, stocks, mortgages. 2. It also details firm structure with the firm's financial management activities and financial decisions made by investors like individuals and institutions. 3. The financial system consists of banks, markets, insurers and others that facilitate activities between individuals with and without financial corporations.

1. EC4024
Lecture 3
The Structure of the
Financial System

2. Mini Presentations

3. Message

4. “Structure
Matters”

5. 1. Macro Structure
2 1
Financial
Real 4
Household Assets/
Activities 3 Liabilities
( )
5
Bonds
Stocks
Options
Mortgages
.....

6. 2. Firm Structure
2 1
Firm’s Financial 4 Investors
Activities 3 Management
( )
5
Individuals
Institutions
.....

7. Financial Decisions

8. Individuals With
Corps
Banks Markets Insurers
Others
Individuals without

9. I save, you invest

10. Handout

11. Next Time
Read Cowles, 1933, in coursepack
Mini Presentation is: