The introduction of Financial System.pptx

Financial System

1. Meaning of Financial System A financial system refers to a network of institutions, markets, regulations, and systems that facilitate the flow of funds and financial resources within an economy. It encompasses banks, financial institutions, stock exchanges, regulatory bodies, payment systems, and various intermediaries that help with the allocation of capital and resources, mobilization of savings, and management of risks in the economy. The financial system plays a crucial role in facilitating economic transactions and promoting economic growth.

2. Function of Financial System

3. Financial Institutions Financial institutions are organizations that provide financial services to individuals, businesses, and governments. These institutions include banks, credit unions, insurance companies, brokerage firms, investment banks, and other entities that facilitate financial transactions, loans, investments, and other financial activities. They play a key role in the economy by offering services such as deposit-taking, lending, investment management, insurance, and other financial products to help individuals and organizations manage their finances and achieve their financial goals.

4. Financial Market Financial markets are platforms where individuals, institutions, and governments buy and sell financial securities, commodities, and other assets. These markets provide a mechanism for participants to trade various financial instruments, such as stocks, bonds, currencies, commodities, and derivatives. Financial markets are essential for raising capital, managing risks, determining asset prices, and facilitating investments, contributing to the efficient allocation of resources within the economy.

5. Types of Financial Market as per nature

6. As per Maturity As per S eason

7. Financial intermediaries Financial intermediaries are institutions that act as a middleman between savers or investors and borrowers. They collect funds from savers and channel them to borrowers in the form of loans or other financial instruments. Examples of financial intermediaries include banks, credit unions, insurance companies, mutual funds, and pension funds. These intermediaries play a crucial role in facilitating the flow of funds between surplus units and deficit units in the economy, thereby promoting efficient allocation of capital and reducing transaction costs for both borrowers and lenders.

8. Financial Assets

9. Role of Financial System in economy