LESSON ONE : INTRODUCTION TO FINANCIAL MARKETS AND INSTITUTIONS 2
1.0. Nature of Financial system. 2
1.1. Financial instruments and services. 6
1.2. Importance of a Well Functioning Financial System.. 6
1.3 The Negative Impact of Small Financial Systems in Africa. 7
1.4. Financial System and Economic Development 9
1.5. Growth of Financial markets : Financial Repression and financial Deepening. 10
Key terms in financial markets : 12
LESSION TWO : FINANCIAL MARKETS. 13
2.0 Financial Market Defined : 13
2.1. Functions of financial markets. 15
2.2. Effects of an efficient financial market on the economy. 17
2.3. Broad Classification of Financial Markets. 17
2.4. Structure of Kenya’s Financial Market 20
2.5. Forms of Exchange in Financial Markets. 25
2.5. The need for financial intermediation (intermediation theory) 27
LESSON THREEE : FINANCIAL INSTITUTIONS. 29
3.0 Functions of Financial institutions. 29
LESSON FOUR: REGULATION OF FINANCIAL MARKETS. 32
3.1. The need for financial regulation. 32
3.2. Financial regulation in Kenya. 36
LESSON FIVE: KEY FINANCIAL INSTITUTIONS. 38
5.1 Commercial Banks in Kenya. 38
5.2. Factors That Have Led To Rapid Development of Commercial Banks In Kenya. 40
5.3. General Principles of Bank Management 40
5.3 Performance Evaluation of Commercial Banks. 45
5.4.1 Types of Retirement Plans.
5.4.2. Pension Schemes in Kenya.
5.4.3. Growth in Pensions in Kenya.
5.4.4. Regulation of pension funds.
5.4.5. The Role of Trustees in Pension Schemes.
5.4.6. Key challenges of pension funds in Kenya.
LESSON SIX : MONEY MARKETS AND INSTRUMENTS.
6.2. Uses of repurchase agreements.
6.4. Negotiable certificate of deposit
6.6. Euro commercial paper (or euro notes):
LESSON SEVEN : CAPITAL MARKETS
7.1. The Role of Capital Markets In An Economy.
7.2 The role of Capital Markets Authority ( CMA)
7.3. Participants in capital markets in Kenya.
7.4.1. Capital Market Terminologies.
7.4.2. Securities issued in equity market
7.4.3.The equities market may be divided into two :
LESSON EIGHT : THE BOND MARKET..
LESSON NINE : INTEREST RATES IN KENYA.
9.2. Determination of interest rate : theory of interest determination.
9.3. Term structure of Interest Rates.
9.4.2. Liquidity preference (or liquidity premium) theory.
9.4.3. Market Segmentation theory.
LESSON TEN : DERIVATIVES MARKET AND INSTRUMENTS.
10.0. Introduction and Definition.
10.1. Need to Develop a Derivative Market in Kenya
10.2. Elements of the Microstructure of a Derivatives Exchange
10.3. Derivative Market Instruments.
LESSON 11 : INTERNATIONAL FINANCIAL INSTITUTIONS
11.1.1. Requirements of I.M.F.
11.1.2. The major objectives of the IMF set by charter are
11.3. World Trade Organization (WTO)
11.4. International Finance Corporation (IFC)
