Читать книгу Fundamentals of Financial Instruments - Sunil K. Parameswaran - Страница 23

Money is a financial asset because all forms of money in use today are claims against some institution. Contrary to popular perception, money is not just the coins and currency notes handled by economic agents. For instance, one of the largest components of money supply today is the checking account balances held by depositors with commercial banks. From the banks' standpoint, these accounts obviously represent a debt obligation. Banks have the capacity to both expand and contract the money supply in an economy. Currency notes and coins also represent a debt obligation of the central bank of the issuing country, like the Federal Reserve in the United States. In today's electronic age, newer forms of money have emerged, such as credit, debit, and smart cards.

Money performs a wide variety of important functions, thus it is sought after. In a modern economy, all financial assets are valued in terms of money and all flows of funds between lenders and borrowers occur via the medium of money.