Financial System

Question 1

Financial system

Answer 1

It is a system that facilitates the movement of funds or finance from persons who have surplus fund to persons who need them

Question 2

Comprising of financial sector

Answer 2

• financial institutions(CBN, ministry of finance)
• financial market (capital and money market)
• financial instruments (treasury bills, treasury certificate)
• financial bodies

Banks include - commercial and merchant banks and development banks

Non -banks - mortgage banks,pension funds ,insurance companies

Question 3

Roles of financial systems

Answer 3

• provision of financial resources to meet the borrowing needs of individuals ,households,enterprises and government
• the provision of adequate Facilities which aids the collection of funds or investment to save
• provision of the sound payment mechanism
• it acts as a bridge between savers and borrowers
• it formulates capital, investment and profit generation