Pascua, Lee

COABLK1D

1. Define Financial System.

- Financial system is a system that allow transfer money between savers and borrowers.
- Financial system I most important institution and functional vehicle for economic
transportation. Finance is a bridge between present and future whether and mobilization of
saving or effective and equitable allocation for investment.
- Supply funds to various sector and activities of economy in way promote fullest possible
utilization of resource without unnecessary interference with individuals desire.
- Provide link between saving and investment.
2. What are the components of Financial System?
- Financial Institution – these are organizations that offer financial services.
- Financial Market – the system that allows people to buy and sell goods and services to each
other.
- Financial Instruments – these are assets belonging to a person or company. This can include
cash, bonds, or other assets; such as property or items of of value.
- Financial Service – these are offered by financial institutions. These include such thing as
banking, loans, and mortgages, as wee as pensions.
- Financial Practice – a sort of guideline around how the financial institutions should operate
their services.
- Financial Transactions – these are the actual exchange of assets for goods or services –
paying for a new car, or a loan, for instance.
3. What are the Financial Instruments used in the Financial system?
- Cash
- Shares
- Bonds, which are contractual rights to receive cash.
- Securities, contracts that we give value to and then trade.
4. What is the Development of the Philippine Financial System?
- The Philippine financial system in the early 1990s was composed of banking institutions and
non-bank financial intermediaries, including commercial banks, specialized government
banks, thrift and rural banks, offshore banking units, building an loan associations,
investment and brokerage houses, and finance companies. Until, it reached up to the
Philippine banking system today. Republic Act 7653 governs the Philippine banking
today.The advancement of technology contributed to the irreversible changes in the
financial or banking system. For instance, the access devices, card-based products, prepaid
software products or network money.
5. What is the Structure of the Philippine Financial System?
- The structure of the Philippine Financial System is dominated by a banking systems. Bangko
Sentral (Central Bank) is the official central bank in the Philippines. The BSP monitors and
compiles various indicators on the Philippine banking system, that is composed of universal
and commercial banks, thrift banks, rural and cooperative banks. The structure of the
financial systems allows the option to take debts and bu bonds or stocks.
- Universal and commercial banks – represents the largest single group, resource-wise, of
financial institutions in the country. They offer the widest variety of banking services among
financial institutions. Moreover, to function a ordinary commercial bank, universal banks are
also authorized to engage in underwriting and other functions of investment houses, and to
invest in equities of non-allied undertakings.
- Commercial banks – an institution which accepts deposits, makes business loans, and offers
related services. Also, allow for a variety of deposit accounts, such as checking, savings, and
time deposit. Commercial banks offer services to individuals, they primarily concerned with
receiving deposits and lending to businesses.
- Thrift banking system – composed of savings and mortgage bank, private development
banks, stock savings and loan associations and microfinance thrift banks. Thrift banks are
engaged in accumulating savings of deposits and investing them.
- Rural and cooperative banks – the more popular type of banks in the rural communities.
Their role is to promote and expand the economy in an orderly and effective manner b
providing the people in the rural communities with basic financial services.