preview

The Functions Of Financial Institutions Within A Financial System

Better Essays
Discuss the functions of financial institutions within a financial system and give examples of financial services and products that are traded by these institutions.

A financial institution is something that has been established that contains financial trades for example investments, getting a loan or putting a deposit (ABP, 2001). Financial institutions get dealt with on day to day so almost everyone deals with it. Majority of the depositing, borrowing money, exchanging money contains and must be done through financial institutions.

The functions in financial system contains:
•Investment Banks

•Commercial banks

Insurance Companies

•Investments companies

One of the functions of the financial institutions is Commercial Banks. Commercial banks will accept deposits and provide very good security and make it suitable for their customers. This is just a normal role for the bank to give their customers money safe so that their customers don’t have to physically keep their belonging in their home or on them (APB, 2001). With having commercial banks there is no need to keep large amount of money in hand because the banks can handle it such as online banking, checks, debit card or credit card.

Another one is insurance companies, insurance companies protect themselves or their properties such as your phone, your vehicle or your house anything that you feel should be insured. Insurance use statistical analysis to protect what has been covered by the company, insurance
Get Access