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Money and Banking
| Question | Answer |
|---|---|
| Money | anything that is generally accepted by people in exchange for goods and services or repayment of debt |
| Legal Tender | is money that MUST be accepted if offered as payment for a purchase or settlement of a debt. |
| Monetary Policy | Those actions by the ECB that influence money supply, interest rates and the availability of credit. |
| Commercial Banks | are institutions that provide deposit and lending services to personal consumers and businesses. |
| Credit Unions | is a group of people who save together and lend to each other. Every credit union is owned by the members. They exist only to serve its customers and not to profit from their needs. |
| Primary Liquidity Ratio/Liquidity Coverage Ratio | is the amount of money with respect to short term deposits that the Central Bank requires commercial banks to keep in cash form. |
| Capital Adequacy Ratio | is the percentage of a bank's capital to its risk weighted assets. This is the amount of back-up a bank has apart from cash as security, e.g. common shares. |
| Nominal Interest rate | is the interest rate adjusted for inflation |
| Real Interest Rate | is the nominal rate of interest minus the rate of inflation. |
Created by:
cmcgrath
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