U.S.bank1

Saving, Investment,

and the Financial System

Chapter 13

By: Kyeong Whan Park (Parker)

Liwei Zhu

Su Yan

Yutian Wu

Jeremy Johnson

Understanding difference between saving,

investment, and the financial system

Financial Institutions

• Financial System- the collection of accounting processes and procedures that allow a business to keep accurate financial records, monitor accounts, prevent fraud and mistakes, and catch any discrepancies.

• Helps coordinate savers and borrowers of various financial institutions

• Financial Markets- any marketplace where buyers and sellers participate in the trade of assets such as equities, bonds, currencies and derivatives.

• Examples- the stock market, the bond market, the real estate market.

• Financial Intermediaries- financial institutions through which savers can indirectly provide funds to borrowers.

• Examples- Insurance Companies, Financial Advisors, Credit Union, Mutual/Investment trusts

• Benefits- Lower search costs, Economies, Spreading risk, and Convenience of Amounts.

Different Kinds Of Saving

• Private Saving- the amount of income that households have left after paying their taxes and paying for their consumption.

• Private Savings= Y-T-C

• Public Saving- the amount of tax revenue that the government has left after paying for its spending.

• Public Savings= T-G

• National Saving- the sum of a nation’s public and private savings.

• National Savings= Private Savings + Public Savings

Saving and investment

• Different type of Investments- ownership, lending and cash

equivalents.

• Examples of investments- Retirements and starting a business

• Savings examples - bank account

Budget deficits and surpluses

• Budget Surplus- a period when income or receipts exceed outlays or

expenditures.

• Budget deficit- an excess of government spending over tax revenue

• Budget Deficit= Government's Total Expenditures- Government’s Total

Income

• United States Federal Government's total income for the fiscal year 2012 is

$2.469 trillion while its corresponding expenditures amount to $3.796 trillion.

• This gives us a budget deficit of $1.327 trillion ($3.796 trillion of expenditures

minus $2.469 trillion of total income).

The market for loanable funds

Definition：the market in which those who

want to save supply funds and those who want

to borrow to invest demand funds.


we assume that the economy has only one financial market

• All savers go to this market to deposit their saving

• all borrowers go to this market to take out their loans.

• there is one interest rate, which is both the return to

saving and the cost of borrowing


The supply of loanable funds comes from people who have some

extra income they want to save and lend out. This lending can occur

directly, such as when a household buys a bond from a firm, or it

can occur indirectly, such as when a household makes a deposit in a

bank, which in turn uses the funds to make loans. In both

cases, saving is the source of the supply of loanable funds.


The demand for loanable funds comes from households and

firms who wish to borrow to make investments. This demand

includes families taking out mortgages to buy new homes. It

also includes firms borrowing to buy new equipment or build

factories. In both cases, investment is the source of the

demand for loanable funds.


The slope of the supply and demand curve

The Market for Loanable FundsThe interest rate in the economy adjusts to balance the supply and demand for loanable funds.

Policy 1: Saving Incentives

• Saving Incentives Increase the Supply of Loanable

Funds

Policy 2: Investment Incentives

• Investment Incentives Increase the Demand for

Loanable Funds

Browse & Compare Savings Accounts Description Monthly

Maintenance

Fee

Requirement to Waive the Fee Minimum

Opening

Deposit

Platinum

Select

Money

Market

Savings

An exclusive savings account with discounts and

more for top-tier customers. Must have a

Platinum Checking Package to apply.

$0 None $25

Package

Money

Market

Savings

Enjoy competitive rates and other benefits when

you team up your Silver or Gold Checking

Package with a Package Money Market Savings

account.

$0 None $25

Standard

Savings

Account

Our FDIC-insured Standard Savings account

features competitive rates and is ideal for first-

time savers and those with low account balances.3

$4 $300 minimum daily ledger

balance1 OR $1,000 average

monthly collected balance2

$25

Goal

Savings

Account

Get yourself on the fast track with

automatic transfers from your U.S.

Bank checking account. Goal Savings

is FDIC-insured and gives you an easy

way to save.

$0 None $0, with a minimum $25

automatic monthly

transfer from a U.S.

Bank personal checking

account, per statement

cycle4

View

Rates

Money

Market

Account

Our standard Money Market account is

FDIC-insured and provides

competitive interest rates and a low

minimum balance requirement. Plus,

you'll always have easy access to your

funds when you need them.

$10 $1,000 minimum

daily ledger

balance1OR $2,500

average monthly

collected balance2

$100 View

Rates

Elite

Money

Market

Account

When you keep your balances higher

with our Elite Money Market account,

you're rewarded with a higher rate of

return.

$10 $10,000 daily

minimum ledger

balance1

$100 View

Rates

Star Savers Club

Teach your kids to learn good money management

skills. Our FDIC-insured Star Savers Club account is

designed for children 17 and under.3

$0 None $25 View

Rates

Retirement Money

Market Account

Remove

Use this account to aid with your retirement plan. $0 None $100 or $25

automatic monthly

deposit

View

Rates

Intermountain Gas and U.S. Bank give time and

money to Paint the Town

The Financial Of US Bank

• Stock information

Financial information of US bank

References

• - Staff, I. (2016, October 24). Intermountain gas and U.S. Bank give time and money to paint the town. Retrieved from

http://idahobusinessreview.com/2016/10/24/intermountain-gas-and-u-s-bank-give-time-and-money-to-paint-the-town/

• - Product comparison. (2016). Retrieved from

https://www.usbank.com/ICWeb/productComparison.html?productCode=SAV,REA&icid=OTHI_17642&WT.mc_id=r

17642&original_ref=https%3A%2F%2Fwww%2Eusbank%2Ecom%2Fsavings%2F

• - Stocks, Rating, S., Cap, M., Type, S., Funds, I. M., Style, I., … data, O. reliable. Shareholders major USB US

Bancorp including fund and institutional. Retrieved from http://investors.morningstar.com/ownership/shareholders-

major.html?t=USB

• - Us bank stock. Retrieved from https://www.google.com/search?q=us%20bank%20stock&rct=j

• - Retrieved From https://www.usbank.com/en/annual_report/investor/resources/doc/USBank_AR14.pdf

U.S.bank1

Documents