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Showing posts with the label value of currency

About financial support to some currency

https://gamesandtehories.blogspot.com/ Kimmo Huosionmaa There are two ways of giving financial support for some currency, another way is to give official support by using national banks, what would buy that currency, and that would give support for it. But another way is to make the same thing with normal business banks. In this case, the support buying for the targeted currency is made by normal private banks or some international companies, what has enough money for that kind of operations. But there is one problem with this kind of support. If the supporter is the central bank of some nation, there normally would be made the contracts that the supported nations central bank will buy that currency back to home because this would make stabilization for the number of currency, and that would keep the value stable. Because if there is too much currency in the markets, that would crash the value of the money. And this will be very problematic because if some currency has been du...

The banking reserve and financial policy

https://gamesandtehories.blogspot.com/ Kimmo Huosionmaa When governments make their contracts of the structure like roads and buildings they act like other actors. Almost every budget in the building industry is calculated a little bit over the real costs, because of the unexpected catastrophes or disturbing the production. There is calculated the loss of building material, what can be replaced with new elements, and if the accident happens in the building site, would that replacement pay the contractor.  But if there are no accidents, the money what is reserved for those replacements would leave to the bank accounts. Also, another reserve is made for repairings, but if there is no need for that the money would not be used. This would grow the money in the accounts, what are called the overbudgeting.  The governments are working like big companies in this area, and one of the things, where that money is used is the financial buffer, what makes possible t...