Financial Markets

Group No.1: Module 1

Discuss the meaning of Financial System.

‘Financial system’ from these words itself can already generate a vague idea of what it
meant. It
is a system involving all money-related activities like obtaining, allocating, distributing and
utilizing money whether it be on hand or cashless transactions. Remember when you received
cash for the first time in your life and decided to use it to buy candy or junk food from the store?
That’s when you became part of the system so it is safe to say that almost everyone in the
world, working or not, are participants of financial system as long as they have a way of
obtaining money.

According to Mariano 2017, Financial System describes collectively the Financial

markets, the
Financial System participants and the Financial instruments and securities that are traded in the
Financial markets.

FINANCIAL
SYSTEM

LENDERS (THOSE WHO HAVE BOROWERS (THOSE WHO NEED

MONEY) MONEY

To illustrate:

Financial system is composed of institutions and markets. Its job is to act as the broker or
intermediary between those who need money (borrowers) and those who have money
(lenders).Brokering is done directly through the purchase of securities, bonds or share.
What is the importance of Financial system to our nation?

Basically, the importance of Financial System can be recognize through its function such
as fund acquisition, fund allocation, fund distribution and fund utilization that happened in
every nation. The financial system of an economy provides the means to collect money from the
people who have it and distribute it to those who can use it best. Hence, the efficient allocation
of economic resources is achieved by a financial system that allocates money to those people
and for those purposes that will yield the greatest return.

Group 1 Members:
Leonard Bryan Samson
Rhea Villeza
Daylyn D. Angeles
Maria Ayana Angela Balceda
Reniel Delfin Ortiz
Angelique Veto Falcon
Clarrisejoy Cadiz