Scribd
Upload
18 views2 pages

Financial System

Uploaded by

anamulhaqahmedshah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
18 views2 pages

Financial System

Uploaded by

anamulhaqahmedshah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 2

Financial System:

A financial system is a network of institutions, markets, and instruments that facilitate the flow of
funds and financial services to support economic activity, growth, and development.

A financial system is a network of institutions, markets, and services that allows for the exchange of
funds and capital. It's the foundation of an economy, allowing individuals, businesses, and
governments to manage their finances.

A financial system is a set of institutions, such as banks, insurance companies, and stock exchanges,
that permit the exchange of funds. Financial systems exist on firm, regional, and global levels.

Components of the Financial System:

1. Financial Markets:

• Stock markets (equity)

• Bond markets (debt)

• Commodities markets

• Currency markets (foreign exchange)

• Derivatives markets

2. Financial Institutions:

• Commercial banks

• Investment banks

• Insurance companies

• Pension funds

• Mutual funds

• Hedge funds

3. Financial Instruments:

• Stocks (shares)

• Bonds (debt securities)

• Derivatives (options, futures, swaps)

• Currencies

• Loans

• Deposits

4. Financial Services:

• Payment and settlement systems


• Asset management

• Investment banking

• Risk management

• Financial advisory services

5. Regulatory Bodies:

• Central banks

• Securities and exchange commissions

• Insurance regulatory authorities

• Financial intelligence units

Functions of the Financial System:

1. Mobilization of Savings: Channeling savings into investments.

2. Allocation of Resources: Allocating funds to productive sectors.

3. Risk Management: Providing instruments to manage risk.

4. Liquidity Provision: Facilitating buying and selling of assets.

5. Price Discovery: Determining prices of financial assets.

Objectives of the Financial System:

1. Economic Growth: Supporting economic development.

2. Financial Stability: Maintaining stability and confidence.

3. Efficiency: Minimizing transaction costs.

4. Transparency: Ensuring clarity and accountability.

5. Protection: Safeguarding investors' and consumers' interests.

A well-functioning financial system is essential for economic growth, stability, and prosperity.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy