In finance, the financial system is the system that allows the transfer of money between savers (and investors) and borrowers. A financial system can operate on a global, regional or firm specific level. Gurusamy, writing in Financial Services and Systems has described it as comprising "a set of complex and closely interconnected financial institutions, markets, instruments, services, practices, and transactions."
According to Franklin Allen and Douglas Gale in Comparing Financial Systems:
"Financial systems are crucial to the allocation of resources in a modern economy. They channel household savings to the corporate sector and allocate investment funds among firms; they allow intertemporal smoothing of consumption by households and expenditures by firms; and they enable households and firms to share risks. These functions are common to the financial systems of most developed economies. Yet the form of these financial systems varies widely."
Famous quotes containing the words financial and/or system:
“A theory of the middle class: that it is not to be determined by its financial situation but rather by its relation to government. That is, one could shade down from an actual ruling or governing class to a class hopelessly out of relation to government, thinking of gov’t as beyond its control, of itself as wholly controlled by gov’t. Somewhere in between and in gradations is the group that has the sense that gov’t exists for it, and shapes its consciousness accordingly.”
—Lionel Trilling (1905–1975)
“We recognize caste in dogs because we rank ourselves by the familiar dog system, a ladderlike social arrangement wherein one individual outranks all others, the next outranks all but the first, and so on down the hierarchy. But the cat system is more like a wheel, with a high-ranking cat at the hub and the others arranged around the rim, all reluctantly acknowledging the superiority of the despot but not necessarily measuring themselves against one another.”
—Elizabeth Marshall Thomas. “Strong and Sensitive Cats,” Atlantic Monthly (July 1994)