FMRI Management Coursework Example | Topics and Well Written Essays - 1000 words

FMRI Management - Coursework ExampleThere are many products provided by banks and other financial intermediaries to the customers for long-run motives. Some of the prominent provisions of services include term deposit and comparable accounts, which al subalterns consumers to make very safe and appealing investment (Padmalatha 2011). It is because a outlined period of money drawl is beneficial as it returns back higher direct and it is a low risk investment compared to demand deposit. Financial intermediaries deed over consumers an opportunity to utilize confederations and quoted shares as currency to start up a small business (Padmalatha 2011). In addition, banks also facilitated their customers with the opportunity of invested funds through unobjectionable means under the supervision of concerned authoritative bodies. Skilled and efficient managers are responsible for the security of invested fund to ensure banks as most true organizations for the consumers.Life insurance is a nother important indemnity of financial intermediaries to serve people of the society. It is a long-run service, specifically an important financial security for family (Padmalatha 2011). It can assist a family during crucial stages of life, such as marriage, health care, or education of children. It is a vital tool of protecting family and children in financial terms. A premium policy is another very significant service for the citizens (Padmalatha 2011). It is considered a complementary plan for the public provided by employers of the organization to their employees after retirement or death. This policy allows family of an employee to receive a fix amount from the salary, through the whole life on a monthly basis. These are some of the most advantageous long-term services, provided by retail banks or non-bank financial intermediaries (Padmalatha 2011). Implications of Increased Interest Rates Increase in interest identify pulls down inflation. However, more than investors ge t service with the increased interest rates. It is so because an increase in interest rate also increases the worth of loan. Ultimately, the worth of pension and bond fund increases. It provides an outstanding service to those who depends upon pension and other funds for their monthly income (Cummings 2010). This condition attracts more people towards saving funds rather than spending their money, because everyone is well aware of the facts, which can pass on gain to them. Thus, during the season of higher interest rate, rate of individuals investment increases in the banks. Moreover, in this situation risk premium is also provided, which usually gets flatten during low interest rates (Cummings 2010). In addition, not only citizens, but foreigners also tend to show their interest in investment in the state, where interest rate increases and benefits investors with high rate of returned amount. Furthermore, it has been observed that it results in stronger currency and puts higher demands of currency (Cummings 2010). As a result, countries take advantage from currencies of other states and citizens enjoy lower rate of good and products of daily use such as petrol and other food items. Additionally, in this season governmental bodies of the country buy back bond on low cost (Cummings 2010). In short, it could be said that investors look for more advantages than disadvantages of the season because it is beneficial for saving money, but not for investments. Risk to commercialized Banks Commercial banks gain a return towards shareholder only when the organizers successfully