Act as middlemen for buying and selling securities like stocks and bonds [2, 4].
These entities act as intermediaries between suppliers of capital (depositors and investors) and those who need capital (borrowers) [2, 3]. They play a critical role in the economy by providing liquidity, facilitating payments, and managing risk [1, 5]. Common Types of Financial Institutions financial institution
Protect individuals and businesses against financial loss in exchange for premium payments [3, 5]. Act as middlemen for buying and selling securities
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Manage deposits and provide loans to individuals and businesses [3, 4].
Because they are vital to the stability of the global economy, most financial institutions are heavily regulated by government agencies to ensure transparency, prevent fraud, and maintain a stable money supply [1, 5].