Financial Intermediaries

Lesson Objectives

Identify the functions of different types of financial intermediaries

Explain how financial intermediaries benefit individuals, businesses, and the economy

Define capital and describe its importance to financial intermediaries

Key Vocabulary

Capital Financial Intermediary Mutual Fund Pension Fund Savings and Loan Thrifts

Financial Intermediaries

Banks Thrifts (saving and loan banks) Credit Union Insurance Companies Mutual Funds Pension Funds

Financial Intermediaries

Which intermediary would best fit the needs of each scenario?› Anthony is in the process of starting his

own plumbing business. He is worried about some of the risks that he faces in terms of owning a business, having employees, and working on people’s homes. What type of financial intermediary does he need?

Financial Intermediaries

Garrett is a businessman who is interested in having easy access to his money. Convenience is the name of his game. He likes to check his account balances on his computer and would be happy to never have to step foot inside a financial institution. He prefers to have his credit card, checking account, and savings account all linked to the same account. Where should he go?

Chang-su is a senior in high school. He is ecstatic over his acceptance at a private college; however, he is worried about how he will pay for tuition and books. In addition to the scholarship that he received from the school, he will need to take out an extra $15,000 student loan. Where should he go?

Financial Intermediaries

Download- Reading: Financial Intermediaries

Read the resource Highlight new ideas and words Underline two important phrases that

will help them remember the meaning of the term

Financial Intermediaries

In regards to the previous scenarios, is it possible for there to be more than one correct answer? Explain why or why not.

Definitions

Create a taxonomy of terms in this section

Take 3 minutes to create your own taxonomy

Take 3 minutes to discuss your taxonomy at your group

Take 4 minutes to walk around the room and acquire any new words

Elements of a Brochure

What is the brochure trying to accomplish? What type of content is found in the

brochure? What type of person would read this

brochure? How is the text organized? What is the tone of brochure? How would you describe the layout? Does the brochure use any “small print”?

What type of information is included there?

Assignment

Create a brochure to inform fellow students about financial intermediaries

Research characteristics about the financial intermediary

Download- Directions: Brochure

Assignment

Download- Assessment Criteria: Brochure

Download- Example: Brochure Design the layout for the brochure Use art supplies and creativity to

create your brochure

Financial Intermediaries

Research your financial intermediaries with the directions and adding terms to your taxonomies as you go

Go around the room and get one interesting fact about the other financial intermediary, and give one about yours.

Construction and Layout

Create a rough draft or layout for your brochures

Gallery Walk

Download- Worksheet: Gallery Walk Peer Review› Write down one thing your liked, one thing

you learned, and one suggestion about each brochure

Quiz Review

1. List financial intermediaries that we have learned about

2. List the products or services available at that intermediary

3. Explain the purpose of the intermediary to society

Quiz on Financial Intermediaries

Open notes Use your resources that you have

acquired to take this quiz

Financial Intermediaries

Which intermediary would best fit the needs of each scenario?› Anthony is in the process of starting his

own plumbing business. He is worried about some of the risks that he faces in terms of owning a business, having employees, and working on people’s homes. What type of financial intermediary does he need?

Financial Intermediaries

Garrett is a businessman who is interested in having easy access to his money. Convenience is the name of his game. He likes to check his account balances on his computer and would be happy to never have to step foot inside a financial institution. He prefers to have his credit card, checking account, and savings account all linked to the same account. Where should he go?

Chang-su is a senior in high school. He is ecstatic over his acceptance at a private college; however, he is worried about how he will pay for tuition and books. In addition to the scholarship that he received from the school, he will need to take out an extra $15,000 student loan. Where should he go?

Capital

“If capital of a bank is higher, the depositors feel safer in case of any unfavorable situation for the business.” http://www.thefinancialexpress-bd.com/more.php?page=detail_news&news_id=49706

“The U.S. government took further steps to prop up the U.S. banking system on Friday, starting to inject capital into a new group of banks.” http://www.reuters.com/article/businessNews/idUSTRE49N6J620081025?feedType=RSS&feedName=businessNews

“Stocks Surge As Banks Get Capital” http://www.forbes.com/home/2008/10/28/briefing-afternoon-banks-markets-equity-cx_ss_1028markets36.html

Capital

Based on the articles, what is your definition of capital?

Capital refers to the financial resources that are available for a business’s use.

Defining Format

Term Category Characteristics

A bank is a Financial institution that

1. Helps people manage their money

2. Is regulated by the government

3. Provides depository and lending services

Capital is a Form of wealth that 1.

2.

3.

Reading on Capital

Download- Reading: Importance of Capital to Financial Intermediaries

While reading, you must select two passages of particular interest and write a summary of the idea or concept on each index card. On the back of each card, write your response to the passage that was selected. Mention to the class that their responses could include:› A question› A connection that they made to their own lives› Something they didn’t really understand› Something that they had a strong opinion about

Capital

Imagine that you’ve been asked to visit the local junior high school and explain the importance of capital to financial institutions. What ideas and/or concepts would you be sure to include in your response?

Useful financial Intermediaries

The goal of this assignment is to create an advertisement for a specific financial intermediary.

You are going to be in groups of two. You’re goal is to describe the

characteristics of a financial intermediary in the United States.

Useful financial Intermediaries

You can find financial intermediaries by going on yahoo or google finance and looking up the finance industry.

You must look up products and services, locations, why would you personally use this company, 1 interesting fact about the company, and 1 quote about the company.

Include pictures and graphics to go along with the information.

Useful financial Intermediaries

You can use Word, publisher, poster board, etc to complete your projects. They will be due on Wednesday.

Research

Social Studies: Research the causes of the Savings and Loan Crisis of the late 1980s and report findings to the class in the form of a presentation. Further your investigations and compare and contrast the causes and effects of the S&L Crisis with the subprime mortgage crisis of 2007–2008