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Comment by coffeemug | Hacker News Reader

What is the best book to understand the financial system is, how it works and why it is the way it is for a layman?

The Bank of England has two great introductory papers on money in the modern economy, they're about as easy as it gets when explaining quite a complicated system.

https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...

IIRC there was a book called "how the city works" which I read as a junior trader. That's a non technical interview of what kinds of roles there are in finance, explaining what all the different players do.

You probably mean "The money machine: how the city works"

https://www.amazon.co.uk/Money-Machine-How-City-Works/dp/014...

I agree, it's a good intro. Covers insurance too.

Yep

Is it this book? https://www.koganpage.com/product/how-the-city-really-works-...

Start with Investopedia articles. Here's one on currency pegs, and why most governments don't have free floating exchange rates.

https://www.investopedia.com/terms/c/currency-peg.asp

Also read about the "impossible trinity":

  1. Fixed exchange rate
  
  2. Free movement of capital
  
  3. Independent monetary policy

You can have at most two, but not all three at once.[0]

0. https://en.wikipedia.org/wiki/Impossible_trinity

Some of patio11’s blog posts are better, and more succinct, than most books.

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