BANKING AFFAIRS

Detailed explanation-1: -Financial institutions and financial markets facilitate the functioning of the financial system through financial instruments. In order to fulfil the tasks assigned, they require a number of services of financial nature. Financial services are, therefore, regarded as the fourth element of the financial system.

Detailed explanation-2: -It breaks down the financial system into its six elements: lenders & borrowers, financial intermediaries, financial instruments, financial markets, money creation and price discovery.

Detailed explanation-3: -Financial systems are multidimensional. Four characteristics are of particular interest for benchmarking financial systems: financial depth, access, efficiency, and stability. These characteristics need to be measured for financial institutions and markets.