set of institutions that permit the exchange of funds.

Example of Financial System

Participants of financial system

ensure the financial system is stable

Three Components of Financial System

creating and transferring money.

any resource that is expected to provide future benefits

a liquid asset gets it value from contractual right claim.

Financial Instruments

short term debt instruments

long term debt and equity instruments

newly issued securities are being traded, the transaction is between issuing entity and investor

previously issued oustanding securities are being traded (transaction between investor to investor)

Accumulating Savings and Lending and Investing Savings

Marketing and Transferring Financial Asset

Is an asset that is not physical in nature, its value bears no relation to its form, Physical or otherwise.

Is a physical property, it can be touched.

are financial instruments that represents ownership over a company.

are financial instruments that represents indebtedness of an issuer to an investor.

a financial instrument that derives its performance from the performance of an underlying asset.

regulates the securities markets and is supposed to protect investors against mismanagement and fraud.

Is a private non-profit and non-stock organization created to provide and maintain a fair, efficient, transparent and orderly market for the purchase

Regulates the Financial Institutions engaged in providing Insurance activities.