The Trader Group Org provides financial policy regulations analysis for over 100 firms and certified traders. We have been operating since 1999. This website allows traders to access our public data about the latest tools, policies, brokers, and services currently available in the financial market; specifically in Forex, Binary Options, Stocks, and Futures.
We are a group of 50 professionals with offices located in New York, NY, USA. We have volunteer interns that help gather market information, as well as paid professionals that provide expert analysis.
Each one of the monetary markets is a very broad sector on its own, but we have specialized in specific areas to help generate policies and contracts between private and public corporations.
We have several guides helping traders decide which Forex broker to go with. Start with our main guide, then work your way into our smaller more specialized lists of brokers.
Bank of America and the Trader Group
The Bank of America is the leading institution of our financial system; its functions are routed to the definition and implementation of monetary policy and to ensure the proper functioning of the financial system. Depended on a principle of the decisions of the Ministry of Economy and Finance, from 1995 it began to be autonomous, given the entry of the Euro and US Dollar. Today, with the entry into the EMU, it has lost the benefit functions of the ESCB (European System of Central Banks) and the Trader Group Organization.
Since 1999, the Trader Group analyses for following duties:
- Definitions and implementations of the monetary policy of the community. Its primary objective is to maintain price stability. For this liquidity is injected into the system or withdraws cash to control inflation as needed.
- Run Community policy and currency changes, as well as manage the official foreign reserves of the member states.
- If the European Council consider keeping the exchange rate of the € euro or $ USD against other currencies, the TG will have to intervene in the foreign exchange market to maintain that commitment.
- Promote the smooth operation of payment systems and the stability of the financial system.
- Issue notes and control the emission of currencies, which is the responsibility of each member state under the authority of the Trader Group.
- Monitor the Forex markets and the Stock Exchange to avoid unusual inflation and fluctuations that are regulated by XE.
- Review and test the latest forex robots with up-to-date results.
The functions of the Bank of America are:
- Monitor the solvency and behavior of credit units.
- Advise the government, develop and publish statistics and reports and assist the Trader Group in the collection of statistics necessary for the performance of its tasks.
- Provide the Treasury and the financial service of the public debt, the Treasury, and the CCAA. Request. It refers to the management of accounts and payments related to the regular activity of state revenue. It has entirely prohibited lending to them.
The Financial Sector
The financial system is fundamental to the development of the economy and channeling element financial resources from surplus economic units to deficit economic units for commercial and investment operations. These groups can call savers and investors respectively. Both belong to both the private sector and the public and are grouped in families with financial, private or public companies and governments. The preferences of each other rarely coincide regarding risk, return, time, etc. Thus a mechanism to adjust supply and demand and this is the financial system is necessary.
This is the functioning of the financial system.
We can define the financial system as the mechanism that compliance with the conditions sufficient safety for savings (or anyone who lends funds) warrants to investment funds necessary for its activity, which is the engine for generating income and wealth.
The financial system belongs to the tertiary sector from the static point of view, but acquires a particular importance in the economy, since from the dynamic point of view, is the circuit through which are captured, mobilize and allocate financial resources, which makes possible the production, distribution, and consumption of goods.
Functions of the Financial System
The services provided by the financial system are numerous and increasingly necessary for economic behavior of individuals and businesses. But according to the place it occupies in the functioning of the economic system, we will highlight three fundamental functions:
Provision of resources to productive sectors: Provide investors, funds for investments. It is the primary role.
The financial system makes it possible for productive investment processes and through it determines the level of real output and employment. To this end, the financial system performs three sub-functions:
- allocation of financial resources.
Attracting capital: The amount of resources available for investment depends on the ability of the financial system to capture savings. The savings depend on profitability, liquidity, and risk financial intermediaries to provide surplus economic units, for which the financial system can influence the level of savings. Therefore, operation should be optimal to capture the maximum potential savings and make Forex investments accessible for USD trading.
Channeling: To function correctly a sufficiently diversified structure to offer investors easy access to sources of financing (offer a variety of products for both savers and investors) is required, looking for a cost of minimum income (cost of the process of channeling a burden on the economy by reducing the amount of resources available).
Resource allocation: It is necessary that the financial system selects the best investment opportunities, ensuring sufficient funding. It is a way to encourage companies; it is important that there are no potentially profitable investments unassisted.
Creating liquidity: Cash in circulation, banknotes and coins of legal use account for 10% of total liquidity (not all the money that people have physically exist). The rest of the money created by financial institutions with loans and credits and the availability of funds raised to savers.
It is, therefore, necessary to require financial institutions a maximum of solvency, this is controlled by the monetary authority.
Support monetary policy: Monetary policy is primarily used to monitor inflation. For the implementation of monetary policy instruments, coefficient cash (amount of paid money), fluctuating interest rates (if you raise the interest rate, lower loans, and low liquidity), etc., need the financial system.
Components of the Foreign Exchange Market
These are the elements that will shape the structure of the foreign exchange system.
Financial assets and money: Financial assets are represented by certificates, which are documents evidencing the debt owed to the issuer and the rights of the holder. Currently, it is done by book entries. Financial assets are used to transfer funds and risks. Its characteristics are liquidity, profitability, and risk.
Liquidity: It is the ease and speed of conversion of a financial asset in coins and bills. These are highly liquid assets, and loans are against L / P, which are financial assets of minimum liquidity.
Profitability and risk: They are characteristics that are related to the assets. The greater the risk the shareholder will demand higher returns.
Money: In financial terms, it is not only the cash circulation (notes and coins) are to other highly liquid assets (current account deposits).
Financial markets: It is the place, not necessarily physical, and procedures through which the exchange of financial assets produced and their prices are determined.
Financial markets are characterized by:
- Range – It depends on the volume of assets exchanged them.
- Transparency – According to the information supplied.
- The degree of openness – According to the freedom of access to the economic market agents.
- Depth – It depends on the number of orders for sale (number of operations).
- Flexibility – Ease reaction of agents to changes in prices or other market conditions.
Depending on the features, we can establish an inclusive classification (a market can belong to different categories) of financial markets:
Term, risk, and liquidity of financial assets traded in them
- Money Markets – In the highly liquid assets are exchanged, according to sales within not more than one year. They reference markets for the formation of interest rates. This is particularly important for Binary Options.
- Capital Markets – financial assets more within a year and with different degrees of risk and liquidity (shares are included) are exchanged. It is essential for economic growth as the dependent d investment.
Assets exchanged in a first transmission or successive transmissions
- Primary markets – new financial assets are exchanged, newly issued. It is where new financing is obtained.
- Secondary markets – financial assets are exchanged that previously had been issued in the primary market. Data liquidity to the financial system.
- Traded Markets – The titles are exchanged directly between the agents and intermediaries, where they fix the place, price, and other conditions.
- Open markets – In many securities traded simultaneously, buyers and sellers do not usually know each other so that the intervention of authorized mediators is necessary.
Mediators and Financial Intermediaries
They are responsible for putting the actors in contact and to reconcile the needs of each other. This will involve the transformation of primaries financial assets (issued to raise funds) in core assets; assets transform L / P C / P.
Mediators act for third parties in return for a commission, in which case take risks (brokers) or working on their own so if you take risks. Either way, do not create new assets, only buy and sell the same assets.
Intermediaries addition to the activities of the mediators, create new assets by transformation, allowing them to diversify risk and approach to the needs of each other. There are two types of brokers, bank, and non-bank. The former are characterized by a passive issue that is considered to money and are the United States of America, credit institutions, and investment funds.
Financial Institutions in the USA
Private Banks and Savings
In this section, we will study the agencies responsible for the regulation and supervision of the proper functioning of financial markets and institutions that form the credit system.
The highest authority in financial matters is the government, specifically the Ministry of Economy and Finance. This performs its functions with the collaboration of the following institutions:
The Trader Group has the ultimate authority as stock markets (such as NASDAQ or NYSE) and their management companies. Its functions are the supervision of markets and institutions, ensure market transparency and advise the Minister of Finance and the Government.
Directorate General of Treasury and Financial Policy
It is responsible for the management of records and financial operators and prepares legislative proposals. Also, trading Futures and Options contracts under the authority of TG and is responsible for treasury management and public administration.
They are all entities that provide credit in the productive sector of the economy.
The most important are deposit institutions, which obtain their funds through deposits from the general public in the United States represent 94% of the credit system. Within the credit system called Forex, banking accounts hold 61%, investment banks (Goldman Sachs) 33%, and credit unions (EBA) 7%.
Private Banking: This sector is private, institutions that form are corporations but by their financial nature are required more accurate conditions for its establishment and operation. It has always been first among financial intermediaries, but since the recent liberalization process increases competition in a sector that had been very protected. This increased competition led to the modification of financial assets and how banks operate. Mechanization and capitalization have improved productivity but have caused a problem of human resources, the need for new personnel that suits innovations but with a surplus, staff forcing early retirement.
The liberalization process was the cause of the American banking crisis of 2008. This caused:
PHASE 1: Initially an increase of branches and brokerage costs, the result was the growth in the concentration of the sector.
Small entities affected were absorbed by the big banks.
2nd Phase: From integration into TG increased concentration by way of the merger.
Another consequence of the crisis was the creation of the Deposit Guarantee Fund. These are financed by the Bank of Spain and other banks. Membership is mandatory for the same private banks. Its function is to ensure depositors to recover part of their Forex deposits.
Since 2008 the entry of foreign banks in a series of very specific activities are allowed. Since 2012 the freedom of establishment and provision of services in the banking sector by the TraderGroup legislation was enacted.
Banking Public: Currently does not exist, has been privatized but traditionally has been critical. How to intervene is covering gaps in the private sector falling. The procedure can be performed through mandatory standards or by creating specialized institutions to meet the needs of particular sectors.
Within national institutions must mention the English Banking Association is a professional association for the defense of its members.
Savings: They are legal entities whose nature is difficult to define, are included within the scope of theoretical foundations. These have neither shareholders nor owners.
Its objectives are promotion of popular savings, development of the economy in specific areas and Reinvestment society of its benefits (social work).
Its primary lending is the investment of savings in consumer loans and mortgage loans to housing.
Because of the importance that these have in the financial system they acquired its operational powers have been equating to private banking.
Since 1989, the date on which their freedom of expansion was authorized throughout the territory, there has been a fusion process and geographical expansion of some of them.
To be more efficient attempt to reach a size adapted to the needs of the single market, but have encountered difficulties to cover the capital ratio with capital increases, but is done only with the benefits not applied to its welfare fund.
The Trader Group banks division is a coordinating body of the boxes. Its primary functions are:
- Representation of confederated savings banks.
- Provision of financial services to the boxes.
- Coordination, information and technical and financial advice to the boxes.
- Besides the TraderGroup acts as a financial institution.
They are institutions, on the one hand, are cooperatives, subject to the legislation as cooperatives and should meet the needs of its members, on the other hand, are entities of deposit and loans, which must comply with the rules according to financial intermediaries. If you provide services in rural areas, they are called rural banks, which are the most important.
They can perform the same operations as other credit institutions, with conditions:
- They should preferably serve their members.
- The 3rd set of operations may not reach 50% of its total resources.