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Financial System

A financial system describes a country's financial institutions including commercial banks, insurance companies, and other nonbank financial institutions) and also financial markets (such as those in stocks, bonds and currencies). Also includes the financial infrastructure (for example, payments and settlement systems which can change as a result of new financial technologies.

Key roles of financial markets

A financial market is any exchange that facilitates trading of instruments, such as stocks, bonds, foreign exchange, or primary commodities such as oil and gas

To facilitate saving by businesses and households
To lend to businesses and individuals
To allocate funds to productive uses
To facilitate the final exchange of goods and services
To provide forward markets in currencies and commodities
To provide a market for equities and bonds

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