Banking Institutions: At the heart of the finance system lie banks, acting as intermediaries between savers and borrowers. They facilitate the flow of funds through various financial instruments such as loans, mortgages, and savings accounts.
Capital Markets: Capital markets provide a platform for buying and selling financial securities, including stocks, bonds, and derivatives. These markets enable businesses to raise capital for expansion and investors to allocate their savings for potential returns.
Insurance Companies: Insurance plays a crucial role in risk management within the finance system. By pooling resources from many individuals, insurance companies provide financial protection against unforeseen events such as accidents, illnesses, or natural disasters.
Investment Funds: Investment funds, including mutual funds, hedge funds, and pension funds, manage pools of capital collected from investors. These funds diversify investments across various assets to optimize returns while managing risks.