This text provides a balanced coverage of the theory, institutional descriptions and policy, and incorporates the rapid evolution of the monetary and financial systems. Sections showing how technological advances have altered the financial landscape help focus on the increasing role of communications technology in the financial sector. Questions at the end of each chapter also allow students to immediately test their understanding of key issues. In addition, this edition has been updated to include sections which express the authors' considered opinions on unsettled issues. The questions at the end of each chapter have also been expanded.