Economics
Other Financial Institutions
Other Financial Institutions refer to non-bank financial entities that provide financial services but do not fall under the traditional banking system. These institutions include credit unions, insurance companies, pension funds, and investment firms. They play a crucial role in the financial system by offering a diverse range of financial products and services to individuals and businesses.
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3 Key excerpts on "Other Financial Institutions"
eBook - ePubMonetary Management
Principles and Practice
- A. B. Cramp(Author)
- 2017(Publication Date)
- Routledge(Publisher)
Just how reasonable it is to concentrate attention on equilibrium positions is a question raising large issues into which it is inappropriate to delve very far here, because they are difficult if not impossible to solve. These issues centre around stock-flow problems that we have already encountered in various aspects. It is arguable that analysis of successive positions of full stock equilibrium in financial asset markets is of somewhat academic interest unless such equilibria are restored, following a disturbance, quickly in relation to the time horizon of interest for the particular analysis being undertaken. In this book, our primary focus of interest is on short and medium-term monetary and financial policies, implying a time horizon not exceeding, perhaps, 6–12 months. Empirical work on the length of the time lags involved in reaching desired (equilibrium) portfolio positions has been attempted, but the results to date are inconclusive, and it is not easy to be optimistic that this situation will change.In any case, before we can judge how far to press the re-assessment implied in the foregoing conclusions, it is desirable to return to specific consideration of the o.f.i.s in relation to leg 2 of the orthodox dichotomy, which sees o.f.i.s as pure intermediaries who cannot create credit flows, and whose activities do not (in contrast to the banks) add to the private sector’s asset stock ‘from the supply side’.On this point we may note first that we have already encountered one theoretically possible manner in which o.f.i.s can create credit in the rather restricted sense of a flow of loans that would not otherwise have been available. If the relative preferences of wealth-holders for M and N are more accurately depicted in Fig. 6:2 than in Fig. 6:3 , and if o.f.i.s can raise their deposit rates relative to those of the banks
eBook - PDF- Scott Besley, Eugene Brigham, Scott Besley(Authors)
- 2021(Publication Date)
- Cengage Learning EMEA(Publisher)
5. Related services—A system of specialized intermedi- aries offers more than just a network of mechanisms to transfer funds from savers to borrowers. Many intermediaries provide other financial services, such as check clearing services, insurance, retirement funds, and trust services. 3-4a Types of Financial Intermediaries In the United States, a large set of specialized, highly ef- ficient financial intermediaries has evolved. Although each type of intermediary originated to satisfy a particular need in the financial markets, recent competition, deregulation, and government policy have created such a rapidly chang- ing arena that different institutions currently offer financial products and perform services that previously were re- served for Other Financial Institutions. This trend has caused the lines among the various types of intermediaries to be- come blurred. Still, some degree of institutional identity persists, and these distinctions are discussed in this section. Commercial Banks. Commercial banks, commonly referred to simply as banks, are the traditional “department stores of finance”—that is, they offer a wide range of products and services to a variety of customers. Originally, banks were established to serve the needs of commerce, or business—hence the name “commercial banks.” Today, commercial banks, which represent one of the largest types of financial intermediaries, still represent the primary source of short-term business loans. Histori- cally, banks were the institutions that han- dled checking accounts financial intermediaries Organizations that create various loans and investments from funds provided by depositors. 63 CHAPTER 3: The Financial Environment: Markets, Institutions, and Investment Banking Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
eBook - PDFBasic Finance
An Introduction to Financial Institutions, Investments, and Management
- Herbert Mayo, , , (Authors)
- 2018(Publication Date)
- Cengage Learning EMEA(Publisher)
(The process of transferring funds through investment banking and the “secondary” markets in existing securities is covered in Chapters 3 and 4.) In terms of the amount of outstanding loans, commercial banks are the most important financial intermediary. Commercial banks, however, must compete with other intermediaries such as thrift institutions, life insurance companies, and money market mutual funds for the funds of savers. Attracting these savings is obviously impor-tant, since the individual intermediary can lend only what savers have lent it. The Role of Financial Markets and Financial Intermediaries C H A P T E R 2 Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. CHAPTER 2 The Role of Financial Markets and Financial Intermediaries 13 The bulk of this chapter provides a basic introduction to financial intermediar-ies. Emphasis is placed on commercial banks, their sources of funds, the types of loans they make, and regulation of the banking system. The subsequent sections consider life insurance companies and pension plans. And the chapter ends with money market mutual funds and money market instruments. Money market mutual funds offer individ-uals an alternative to the checking accounts, savings accounts, and savings certificates issued by banks and thrift institutions. By acquiring shares in money market mutual funds, individuals are able to invest indirectly in a variety of short-term securities. Since these securities are usually issued in large denominations, most investors have insufficient funds to purchase them.
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