Financial Institution

In financial economics, a financial institution is an institution that provides financial services for its clients or members. Probably the most important financial service provided by financial institutions is acting as financial intermediaries. Most financial institutions are regulated by the government.

Broadly speaking, there are three major types of financial institutions:

  1. Depositary Institutions : Deposit-taking institutions that accept and manage deposits and make loans, including banks, building societies, credit unions, trust companies, and mortgage loan companies
  2. Contractual Institutions : Insurance companies and pension funds; and
  3. Investment Institutes : Investment Banks, underwriters, brokerage firms.

Read more about Financial Institution:  Function, Standing Settlement Instructions, Regulation

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