Table of contents (expand)
- Necessity and prerequisites for the emergence and use of money
- The modern banking system of the Russian Federation, its structure
- Essence, functions and properties of money
- The role of money in a commodity economy
- The concept of the type and form of money (D)
- Electronic money (ED), their properties and features
- Monetary systems (DS), device, types
- Management principles and functioning of the monetary system
- Elements of the country's monetary system (BCS)
- Cash and payment turnover (DO and PO), its structure
- Release of money into economic circulation
- Principles of organization of cash circulation
- Principles of organization of non-cash money circulation
- bank loan cartoon
- Money supply and monetary aggregates. Velocity of money
- Empirical laws of money circulation
- Quantitative laws of circulation of money
- Methods of state regulation of money circulation
- Nominal and metallic theory of money
- Types, types and forms of inflation
- Forms of manifestation, causes and consequences of inflation
- Methods, limits, contradictions of inflation regulation
- Foreign exchange market
- Concept, structure and elements of currency systems
- World Monetary System: Evolution and Current State
- Regulation of foreign exchange transactions
- country's balance of payments.
- The concept of credit and the need for its appearance
- The main stages in the development of credit relations
- Functions, role and boundaries of credit
- Forms and types of loans
- Loan interest (interest income) and interest rate
- Determination of the market rate of interest
- Nominal and real interest rates
- Types of nominal interest rates
- Factors Determining Differences in Interest Rates
- Interest income calculation
- Lending organization
- Credit risks and creditworthiness of the borrower
- Loan collateral and credit management
- Capital-creating theories of credit
- Theories of credit
- Central banks, their functions and monetary regulation
- Instruments and methods of monetary policy
- Essence and functions of commercial banks
- Balance sheet and operations of commercial banks
- Credit and financial institutions of the country
- Banking and monetary systems of the USA, England, Germany, Japan, France, Italy and Canada
- Banking Legislation
- Regulation of monetary circulation
- Private banking ("Private banking")
- Credit consulting (provision of consulting services on lending)
- Terminological dictionary
Nominal and real interest rates
Nominal rate % is % in monetary terms.
Real rate % is the price-adjusted nominal rate (an increase in real wealth expressed as an increase in the purchasing power of the investor or lender).
Nominal rate %=real rate %+inflation rate (i=r+p)
More precise ur-e: i=r+p+rp
Fisher effect:
Nominal rate%=real rate%+expected inflation rate (pe)
(when the inflation rate is unknown).
The nominal % rate includes a surcharge or premium on expected inflation; due to unforeseen inflation, the premium may be insufficient; then there is an effect of redistribution of income between creditors and borrowers.
Expected real interest rate - the real interest rate expected by the borrower and the lender when granting a loan: r=i-ne
Actual real rate %=r=i-p
If inflation exceeds the rise in the nominal rate, the real rate will be negative.
If rates change in line with inflation, then the lender incurs a potential loss in capital gains if:
1.Inflation reduces the real cost of borrowing.
2. the market nominal rate rises => the market value of securities falls and vice versa.
Author: Shevchuk D.A.
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