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Money and Banking – Lecture 01 finance and banking



钱。 银行业。 金融。 金融系统。 金融市场。 金融机构。 金融工具。 货币理论。 货币政策。 通货膨胀。 商业银行。 投资银行。 中央银行。 宏观经济。 利率。 繁荣。 气泡。 金融危机。 房地产泡沫。 货币替代; 美元化。 风险。 教科书:Murray N. Rothbard 的“银行业之谜”。

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Money and Banking – Lecture 01

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Money and Banking – Lecture 01
finance and banking
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28 thoughts on “Money and Banking – Lecture 01 finance and banking”

  1. Banks do not 'lend' money. They buy and sell securities. It's been proven that a 'loan' is created from nothing when you sign the agreement. This is how the money supply is created. Banks do not act as intermediatary looking after you money. You lend the bank money when you open an account. There is no legal definition of a bank 'deposit'. Money in the form of a loan is never taken from one 'saver' and lent to a 'borrower' .
    97% of 'money' is digital numbers on a screen. Only 3% cash is in actual circulation. This is why it is easy for banks to create most of the money supply…..

  2. Thank you professor, thank you very much!!!!! You made the subject very easy and cleared many topics and terminology, special thanks to the individual recording the lecture

  3. Hello Professor, thank you for the lecrures.
    I'm an undergraduate student, want to study finance from home.
    Can you please tell what courses to start with?
    I have finished Microeconomics already.

  4. 2.6. Handy’s best-fit theory identified four variables:

    ๏ Leader

    ๏ Subordinates

    ๏ Task

    ๏ Environment.

    Handy said that each of these variables could be what he described as ‘loose’ or ‘tight’.
    A tight leader is very autocratic. Tight subordinates like being told what to do and want to avoid

    risk. They want repetitive tasks; tighter tasks are routine and well understood, relatively simple. And

    a tight environment would be one where, perhaps, time is short or there isn’t much resource to go

    around.

    ‘Loose’ would mean that the leader is very participative or democratic; subordinates want to

    participate and contribute to solutions. The tasks are novel, complex, high risk; the environment is

    one which is more generous in time and resources to allow complex tasks to be dealt with.

    Handy said that provided all four variables line up, either all loose or all tight, things will work fairly

    well. So an autocratic manager in charge of staff who want to be told what to do, doing routine,

    repetitive tasks in an environment which is rather constrained will tend to work. However, he said

    that once you get a crossover you are in trouble. If you put an autocratic leader in charge of highly

    trained subordinates who are used to contributing towards solutions or problems, and who are

    used to participation, and these people are given routine tasks with not much time to do them in,

    then it’s not going to work very well. The subordinates will not get on with their leader; the

    subordinates will not enjoy the task.

    So when it comes to “How shall we manage?”, Handy is saying it depends on the situation and the

    variables. The best way of managing is to make sure the leader, subordinates, task, and

    environments all match. Note that this is quite different from saying that tight is better than loose

    or loose is better than tight. What we are saying is that either will work provided the four variables

    match.
    2.7. Adair – action-centred leadership
    Adair is associated with action-centred leadership.
    How shall we manage? Well, according to Adair, it depends. On some occasions there may be a
    very urgent task and we have to reduce our concern for individuals and the group and concentrate
    on the task. Sometimes there may be crisis within a group; perhaps their leader has left, perhaps
    there is disagreement within it, and then the manager or leader should pay more attention to
    making sure that the group operates properly. Of course, sometimes the proper approach to
    leadership will mean concentrating on an individual and seeing to their needs, perhaps like giving
    advice or training.
    2.8. Entrepreneurship and intrapreneurship
    An entrepreneur is someone who is willing to make the effort and to take the risks to set up a new
    business. Generally these people have strong wills, determination and a belief that they are right
    and that the business opportunity they have spotted and are working on will be a success. They are
    not always easy to get along with and often have an abrasive management style. Also, although
    they are inspired by the excitement and challenge of starting a new venture they often become
    bored with day-to-day management and administrative tasks. Professional managers, not
    entrepreneurs, are often better a running a business once it is established.
    An intrapreneur is an employee who promotes innovation and new business ideas within an
    existing organisation. Intrapreneurs bear much less risk than entrepreneurs and investment capital
    is supplied by the company that employs them. However, intrapreneurs are different from
    traditional managers. For example:

    There is a growing trend for companies to encourage employee entrepreneurship to discover
    and exploit new goods and services. Particularly when a business is dealing with rapidly changing
    products and services (such as in IT, pharmaceuticals, entertainment) new employees might have
    better and more up-to-date ideas than established managers – who might be somewhat staid.
    The following can encourage intrapreneurship:
    ๏ Let it be known that spending time on new ideas is welcomed.
    ๏ Remove administrative and cultural barriers. For example, make it easy for employees to meet
    up with others to discuss and develop ideas.
    ๏ Give ownership. If employees have promising ideas let them present them to management
    and fully involve the employee in developing that idea.
    ๏ Embrace failure. Nothing ventured – nothing gained. Many employee ideas will lead to
    nowhere, but better floating ideas in the first place than having none.
    Examples of innovation that arose from intrapreneurship:
    ๏ DreamWorks (a film production company) provides staff with scripting courses then
    encourages them to present their ideas for new films to senior management.
    ๏ Google started as a search engine, but an employee had the idea to create Gmail.
    ๏ 3M – allowed employees to spend time on their own ideas. One discovered the technology
    that led to Post-It notes.

  5. 2. What makes a leader?

    Bennis suggested that great leaders have certain qualities. You might like to compare this list with

    the qualities of good managers you have known or good world leaders and politicians you know

    about.

    ๏ Integrity – that really means honesty.

    ๏ Dedication.

    ๏ Magnanimity – magnanimity is like generosity, particularly when you have won a battle;

    humility.

    ๏ Openness, so that people can trust you.

    ๏ Creativity, so that you can think of novel solutions to difficult problems.

    However, this list, sensible though it seems, does not really tell someone how to become a good

    leader nor will it help in the recruitment of potential leaders. Several theories emerged attempting

    to predict leadership or to help people achieve good leadership abilities.

    2.1. Trait theory

    One of the earliest theories is known as “trait theory.” Here the hope was that we could perhaps

    spot who will be a good manager through certain other traits that they might possess such as

    intelligence, initiative, self-assurance, even how tall the person was. This never really got very far; it

    was too subjective. For example, how would you balance intelligence versus charisma? Many good

    leaders are tall but then leaders such as Napoleon and many others were rather small and were

    perhaps overcompensating.

    Trait theory was really a dead end: it proved to be no good whatsoever by predicting who the good

    managers might be.

    2.2. Human relations approach

    Around 1935, Elton Mayo carried out a very important series of experiments at the Hawthorne

    plant of the Western Electric company.

    In one of these experiments he divided a department into two. Half of the workers were the control

    group, but for the other half he varied the lighting, sometimes making it better, sometimes worse.

    He then asked those workers what lighting they preferred and what suggestions they might have

    for improving it. Much to his surprise he discovered that whether or not the lighting was increased

    or decreased, the productivity of the people in the experimental group went up.

    The conclusion from this experiment was that by making these people feel special, by asking their

    opinions, by asking for suggestions, they were motivated i.e. the manager led people to be

    enthusiastic about their work.. Employees enjoyed being treated as individuals, as people, rather

    than simply being told what to do. This led to what was called a “human relations school” in

    recognition that there is more to good management than simply planning, organising, controlling,

    coordinating, and communicating.

    2.3. Style theory and contingency theories

    Style theory says that a manager’s or leader’s style determines leadership success. In particular,

    styles might have to change depending on who you are dealing with. In other words, good

    leadership is not a set way of behaving but is contingent on the circumstances.

    2.4. McGregor – theory X and Theory Y

    McGregor’s name is associated with Theory X and Theory Y. This can be regarded as a contingent

    theory of management.

    The Theory X manager assumes that people really don’t want to work, that they have to be

    watched very carefully, that they are lazy, that they only go to work with some reluctance because

    they have to earn money to live.

    The Theory Y manager believes that the workforce thinks that work is as natural as play, that they

    get enormous social rewards from going to work, that they get enormous interest from going to

    work, that they like being given problems to solve, and they like recognition.

    So how should we lead these people?

    McGregor recognised that there may be at the extremes these two sorts of people. It was called

    Theory X and Theory Y to be entirely neutral, not Theory Wrong and Theory Right. Basically he was

    saying that if you are put in charge of people who don’t like to work and who go there reluctantly,

    then perhaps the way you have to get the best work out of these people is to be very strict with

    them, to watch them carefully, to control them closely.

    If however you are a manager of people who have good qualifications, who are used to being

    asked their opinion, who have high technical skills, then by far the best way to motivate them is a

    much more participative approach.

    So motivation is effectively a matter of contingency. It depends whom you are trying to motivate.

    Different people are motivated by different managerial approaches.

    2.5. The Ashridge Management College model.

    This identified four types of leadership style, but remember these are only points in the continuum

    of management styles.

    Autocratic Tells
    Sells
    Consults
    Democratic Joins

    First and the most autocratic or dictatorial is “tells.” The manager simply tells the staff what to do.

    The manager does not even feel a need to have to explain why that’s what has to be done.

    A slightly more liberal approach is “sells.” Here the manager tells people what to do but then sells

    that idea to them, convinces or persuades them, or explains why it has to be done that way.

    Next, there is the “consults” style. Here the manager will ask staff what they think ought to be done,

    but then the manager will make the final decision. However, this is quite a participative style.

    Finally there is “joins” or joins with. This can be entirely democratic where the manager actually

    abandons management and asks people to vote on what should be done. This might be the sort of

    style adopted for deciding things like where should the summer outing be. However, many people

    regard this extremely democratic style of leadership as abandoning one of the important functions

    of management which is to direct and control.

  6. The word “social” recognises that we are not machines, that we are people, that we have an

    important social or human aspect to our characters. We will see that in the early theories of

    management, the social dimension was often rather understated.
    The idea of “controlled” is important. Basically one of the roles of management will be to set some

    sort of goals or targets and then to try to ensure that people achieve that.

    Finally, “collective”; the idea that in an organisation we should all be working together
    So, what then is leadership?

    Bennis makes a distinction between the term “manager” and the term “leader.”

    A manager is primarily concerned with administering the status quo. In other words, primarily

    looking after the existing business somewhat in the short term, and keeping an eye on the profit

    for the coming year. That’s not to say management is not an important activity. But best to think of

    a manager as having a time horizon of about a year.
    A leader is more concerned with innovation, will be looking at the long-term future of the

    organisation, will not be so concerned with matters of detailed control, but will be focusing on

    people, inspiring trust, asking “How can we improve, where should the business go, what should

    the business do?”.
    The leader can therefore be regarded as transformational – in other words, concerned with doing

    the right thing; whereas the manger is more concerned with transactional leadership – in other

    words, doing things right, but not necessarily questioning whether what we are doing and

    controlling is useful.
    Kotter said that leadership and management are two distinct and complementary systems and

    both are necessary.
    Transformational
    Transactional Leadership

    Leadership – change
    (Management)
    (Leadership)

    Creating agenda Establishing direction Planning and budgeting

    Developing HR Aligning people Organising and staffing

    Execution Motivating and inspiring Controlling and problem

    solving

    Outcomes Produces changes – often
    Produces predictability and
    order
    dramatic

    Management is about coping with complexity. Without good management complex companies

    and organisations tend to become chaotic. Good management brings order and consistency.

    Leadership by contrast is about coping with change. All change always demands more leadership.

    Companies manage complexity by planning and budgeting, by organising their staff, by

    controlling performance, and problem-solving.

    Leading an organisation, however, involves setting a direction, developing a vision of the future,

    developing strategies to achieve that vision, motivating and enthusing people to keep them

    moving in the right direction.

  7. You are just Amazing & genius lecturer! Very kind and generous too. I never attended my own lectures & classes but with your superb explanation and teaching skills I managed to understand almost everything and scored best result in my MSc Exam.

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