What is a Financial Institution?
Definition
A financial institution (FI) is a business entity that deals with financial and monetary transactions, such as deposits and loans.
Role in Finance
FIs intermediate financial transactions between savers and borrowers, facilitating the flow of funds within an economy.
Types of FIs
Common types of FIs include banks, credit unions, insurance companies, and investment firms.
Importance of FIs
FIs play a crucial role in economic stability by providing access to credit, managing risk, and facilitating financial transactions.
Regulation
FIs are subject to government regulations to ensure financial stability and protect consumers.
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