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Three Financiers Who ChangedThe Financial World
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The role of finance in our life
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Three major objectives of business finance
Obtain an adequate supply of capital
Conserve and increase the capital
Make profit from the use of funds
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Financial crisis
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Before the industrial revolution
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John Law (1671-1729)
Law was a Scottish
financier born in Edinburgh
Tried to heal French public
finance and to facilitate the
money supply through the
introduction of paper
money.
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Mississippi Company
Foursteps
Establishment ofthe Banque
Generale in 1716
Centralization ofcolonial
companies undera single
MississippiCompany
Law used theBank to increasethe money supply
Using the internalrate of return to
encourage holders
of coins to replacethem with bankingbusiness
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The outcome of the campaign and lessons of Law'sexperiment
2. The public felt betrayed and lost
confidence in the system.
3. The main consequence of the failure of
"Law System" was the suspicion that
France would not maintain paper money
throughout the eighteenth century, thus
delaying financial innovation for economic
development.
1. The system of Law entered into an
impasse, since the objective of maintaining a
low interest rate by increasing the money
supply is incompatible with the need to
reevaluate the tickets money other than
coins.
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Mutual fund
A mutual fund is a type of
professionally-managed typecollective investment scheme
that pools money from many
investors.
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Massachusetts Investors' Trust by L. ShermanAdams
1924:
Real trailblazer in the financial services industryToday, mutual funds invested $ 6.1 trillion in America alone.
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The invention of credit cards
The most commonmethod of payment
Total "plastic" debt of Americans
is $ 700 billion.
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Problems that must be solved
How to pay withoutcash?
What to do in order notto carry a pack of cardsfor each restaurant and
shop?
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First credit card
- Profit without charging
interest
- A $3 annual interest
- Focus on salesmen
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The achievements and inventions of these people
have changed our world forever. And though many of
their risky ideas were not implemented fully during
their lives with dignity, we have finalized their concepts
and use their inventions to this days.
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A little more to discuss
What is the finance for you?
Who is the "pioneer" in the world of finance for you ?
Credit card: convenience or a temptation?Do you see the continued progress of society in the
development of the financial sector?
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Thank you for your attention!