The financial system is a system of social and economic relationships involving the production, distribution, and consumption of goods and services. The financial system is an intricate web of institutions that includes banks, insurance companies, credit card companies, mutual funds, pension funds, investment firms, etc.
The components of the financial system are:
- Money - it can be fiat or commodity based;
- Banking - includes institutions like banks, credit unions, and savings institutions;
- Credit - includes loans, mortgages, consumer credit cards, business loans;
- Debt - includes bonds and other forms of borrowing such as auto loans or student loans.
The financial system is a set of institutions that facilitate the movement of capital and credit in an economy. It includes banks, insurance companies, investment firms, stock exchanges, central banks, and other institutions. The financial system also includes a wide variety of services such as credit rating agencies, depositories and payment systems.
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