A financial system is a set of institutions, such as banks, insurance companies, and stock exchanges, that permit the exchange of funds. … Borrowers, lenders, and investors exchange current funds to finance projects, either for consumption or productive investments, and to pursue a return on their financial assets.

What are the 5 parts of financial system?

• Financial Institutions.
• Financial Markets.
• Financial Instruments (Assets or Securities)
• Financial Services.
• Money.

What is included in financial systems?

It encompasses all financial institutions, lenders and borrowers within a global economy. This system may include central banks, government treasuries, international monetary funds, major private international banks, money authorities and world banks.