Financial Institutions

When raising capital, direct transfers of funds from individuals to businesses are most common for
small businesses or in economies where financial markets and institutions are not well developed.
Businesses in developed economies usually find it more efficient to enlist the services of one or
more financial institutions to raise capital. Most financial institutions don’t compete in a single line
of business but instead provide a wide variety of services and products, both domestically and
globally. The following sections describe the major types of financial institutions and services, but
keep in mind that the dividing lines among them are often blurred. Also, note that the global
financial crisis we are now going through is changing the structure of our financial institutions, and
new regulations are certain to affect those that remain. Finance today is dynamic, to say the least!