Financial Institutions are all organizations whose principal activity is the management of financial resources or securities. Thus, mediation, providing or storage of financial resources, securities or various financial derivates.
The financial institutions include:
- Banks and branches of foreign banks
- Savings and credit cooperatives (credit unions) - provide deposits provide loans only to their members
- Investment companies and investment funds - operate on the principle of collective investment represent a higher risk, bring higher yields
- Pension funds - manage pension insurance
- Insurance companies
- building societies
- Persons or entities authorized to trade with securities
- The organizers of the capital markets (Securities market)
- Person or entities operating casinos, bookmakers, auctioning off enforcement, retail real estate, financial leasing, financial activities, foreign exchange trading, brokerage cash and non-cash remittances, savings or brokerage activities for the conclusion of an insurance or reinsurance contract
Financial institutions are subject to supervision and regulation at the national and international level. In the area of banking, Basel Committee on Banking Supervision deals with international standards issuing.
Globally, in the financial market there are many international financial institutions with commercial, regulatory and supporting character. Private capital providers are a special category of financial institutions (e.g. venture capital, Angel investor) that are not subject to supervision.
Use of financial institutions in practice: Each organization must use one of the services of financial institutions (in particular, banking, insurance) to ensure business transactions, procurement, acquisition and preservation of financial resources for its operation.