What are the important services provided by the financial system in an economy?
Following services are provided by financial sector in an economy.
(a) It provides funds for investment.
(b) It gives an opportunity to save systematically and hence promotes savings.
(c) It gives consumption purpose loans to increase the standard of living.
(d) It keeps economy in equilibrium by keeping saving (leakage) equal to investment (injection).
(e) It also provides services like hedging and speculation. It is giving employment to so many people.
(f) It transforms short-term liquid savings into relatively long-tem illiquid assets and thereby increases income.
(g) It also ensures old age security via pension funds.
(h) It also increases the efficiency in utilization of funds.
No comments:
Post a Comment