The goal of the Thematic Unit ΛΧΡ511, “Financial Environment”, is to describe and explain the environment in which banks and other financial institutions operate. Next, the time value of money and the role of interest rates in the economy are explained by analysing the functions, properties and utility of money and the financial system as an intermediary between savers-lenders and spenders-borrower units.

It also explains the money supply and demand, as well as the role of the Central Banks and of commercial banks in shaping monetary policy. It also describes the functioning of money and capital markets. Finally, the institutional-regulatory framework of financial institutions is analysed.