Scribd Logo
Upload

Welcome to Scribd!

  • Finance System

    Uploaded by

    Thanh Hằng Ngô
    6 views16 pages
    The document discusses the key components and functions of a financial system. It describes how a financial system allows funds to flow either through financial markets, where organizations issue securities to raise funds, or through financial institutions that raise funds and invest for profit. The overall financial system works to clear payments, pool and redistribute resources, facilitate transfers across different markets, manage risk, provide information to participants, and address incentive problems.

    Original Description:

    Original Title

    Finance_System

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The document discusses the key components and functions of a financial system. It describes how a financial system allows funds to flow either through financial markets, where organizations issue securities to raise funds, or through financial institutions that raise funds and invest for profit. The overall financial system works to clear payments, pool and redistribute resources, facilitate transfers across different markets, manage risk, provide information to participants, and address incentive problems.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    6 views16 pages

    Finance System

    Uploaded by

    Thanh Hằng Ngô
    The document discusses the key components and functions of a financial system. It describes how a financial system allows funds to flow either through financial markets, where organizations issue securities to raise funds, or through financial institutions that raise funds and invest for profit. The overall financial system works to clear payments, pool and redistribute resources, facilitate transfers across different markets, manage risk, provide information to participants, and address incentive problems.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    of 16

    Financial system Flow of funds Functions

    Financial system

    Gitman chapter 2

    1/16
    Financial system Flow of funds Functions

    Content

    Financial system

    Flow of funds

    Functions

    2/16
    Financial system Flow of funds Functions

    Financial system

    3/16
    Financial system Flow of funds Functions

    Financial system

    • What does a financial system do?


    Video

    4/16
    Financial system Flow of funds Functions

    The system’s participants

    5/16
    Financial system Flow of funds Functions

    Flow of funds
    • Funds flow directly from suppliers to demanders

    6/16
    Financial system Flow of funds Functions

    Private: pros and cons?

    • Cost?
    • Matching of needs?
    • Easy to monitor?
    • Specialization?

    7/16
    Financial system Flow of funds Functions

    Flow of funds

    • Funds flow through financial markets, or


    • Through financial institutions
    Video

    8/16
    Financial system Flow of funds Functions

    Through financial markets

    9/16
    Financial system Flow of funds Functions

    Through financial markets

    • Organizations who need funds issue securities to raise money


    • Debt securities
    • Equity securities

    10/16
    Financial system Flow of funds Functions

    Through financial institutions

    11/16
    Financial system Flow of funds Functions

    Through financial institutions

    • Financial institutions raise funds and invest to make a profit


    • Banks, finance companies
    • Insurance companies
    • Pension funds, hedge funds
    • ...

    12/16
    Financial system Flow of funds Functions

    The whole system

    13/16
    Financial system Flow of funds Functions

    Find an example for this

    14/16
    Financial system Flow of funds Functions

    Find an example for this

    15/16
    Financial system Flow of funds Functions

    Functions of financial system

    • Clearing and settling payments


    • Pooling resources and subdividing shares
    • Transferring resources across time and space
    • Managing risk
    • Providing information
    • Dealing with incentive problems

    16/16

    You might also like