Financial system and interimediaries Coursework Example | Topics and Well Written Essays - 750 words

fiscal system and interimediaries - Coursework ExampleFinancial institutions act as intermediaries and they determine the flow of funds. Financial regulators monitor the participants in the pecuniary system.Conditions. Banks will always want to know how the borrower intends to use the loan. They will also check on whether the economic conditions will enable the customers make enough income to comfortably repay the loan (Wells Fargo, 2015).Financial intermediator is a financial institution that connects individuals with surplus finances with individual with deficit finances. The individuals with excess finances be savers while those with deficit finances are borrowers. The savers give the money to a financial intermediary and the financial intermediary transfers the money to spenders through loans or mortgages. Examples of financial intermediaries include banks, private equity, venture hood funds, leasing companies, gift funds, insurance companies, financial advisers and brokers, collective investments schemes, building societies and micro-credit providers (Robert E.W et. al., 2012).A venture capital is a financial capital provider that provides financing to start-up businesses that suck in high chances to succeed. The venture capital makes money by owning equity in the financed business.A building society is a financial institution that is owned by members as a common organization. Building society of most banking services such as saving and loans especially on mortgages. The profits generated by the building society are distributed among members depending on their share ownership of the building society.A collective investment scheme is a professional arrangement that enables investors to collectively pool funds and have these monies managed by professionals. Collective investment schemes invest in a wide range of investment therefore spreading their risks. They can invest in bonds and quoted equity, real estate and in transport and