What is a financial system?

A financial system is a network of financial institutions, markets, and intermediaries that work together to facilitate the flow of financial resources from savers to borrowers. At its core, a financial system facilitates the creation, allocation, and utilization of financial capital in an economy. The system plays a critical role in enabling individuals and businesses to access funding, manage risk, and conduct transactions. Key elements of a financial system include banks, investment firms, securities markets, insurance companies, and regulatory bodies. A robust financial system is essential for promoting economic growth and stability, as it helps allocate resources efficiently and effectively throughout an economy.

This mind map was published on 1 May 2023 and has been viewed 55 times.