Introduction We start the unit with an overview of financial systems, their functions and general structure. Then we investigate the nature and characteristics of the three major entities that compose financial systems. These are financial intermediaries, securities and financial markets. We will return to a more detailed investigation of each of these entities in later chapters. In our review of different countries, we restrict ourselves to large economies with well-developed financial systems, notably the USA, UK, France and Germany. Specifically, we take a US view and US terminology, therefore in Part I other countries are compared with the US system . Functions of financial systems Financial systems perform the essential economic function of channelling funds from units who have saved surplus funds to units who have a shortage of funds. The units who have saved can lend funds: they are known as lender-savers . The units with a shortage of funds must
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This note was uploaded on 09/23/2009 for the course BUSI 101 taught by Professor Wormer during the Spring '08 term at Acton School of Business.