ESTACIO, DIMPLE M.

BSBA FM 2
SAT/SUN
FIN 2

1. Discuss the meaning of Financial System. What is its importance to the Nation?
 A financial system is a set of institutions, such as banks, insurance companies, and stock
exchanges, that permit the exchange of funds. Financial systems exist on firm, regional,
and global levels. Borrowers, lenders, and investors exchange current funds to finance
projects, either for consumption or productive investments, and to pursue a return on
their financial assets. The financial system also includes sets of rules and practices that
borrowers and lenders use to decide which projects get financed, who finances projects,
and terms of financial deals.
 The financial system serves as an important source for bringing together the savers and
borrowers. It bridges the gap in between the one who has excess of funds lying idle with
them and one who are in need of them. The financial system enables in pooling of funds
from one person to another person across the economy

2. Discuss the role of BSP as manager of banks and of non-banks.

 The BSP extends discounts, loans and advances to banking institutions for liquidity
purposes. Financial Supervision. The BSP supervises banks and exercises regulatory
powers over non-bank institutions performing quasi-banking functions.