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THE MONEY SUPPLY - Coggle Diagram
THE MONEY SUPPLY
FUNCTIONS OF CENTRAL BANK
be a banker to other bank
promote monetary stability & a financial structure
act as banker & financial adviser to the government
be a holder of country's stock of gold & foreign currency reserves
to issue currency & keep reserves safeguarding the value of currency
MONEY SUPPLY
M2 = NEAR MONEY + M1
savings & fixed deposits in commercial banks
negotiable certificates of deposits
REPO ( repurchase agreement )
BANK NEGARA certificates
M3 = BROAD MONEY
M3 = M2 + SAVINGS & FIXED DEPOSITS IN OTHER BANKING INSTITUTIONS
BROAD NEAR MONEY ( QUASI MONEY )= M3 - M1
M1 = CURRENCY + CHECKABLE DEPOSIT
BANKING SYSTEM
NON-BANK INSTITUTIONS
ISLAMIC BANKS
MERCHANT BANKS
FINANCE COMPANIES
DISCOUNT HOUSES
NON-BANK FINANCIAL INTERMEDIARIES
EMPLOYEES PROVIDENT FUND (EPF)
COMMERCIAL BANKS
DEVELOPMENT FINANCIAL INSTITUTIONS
BANKING INSTITUTIONS
CENTRAL BANK
COMMERCIAL BANK
FUNCTIONS OF COMMERCIAL BANKS
providing loans & advances
providing other banking services & facilities
accepting deposits