Financial Sector

• What are financial institutions?

  Entities providing financial services
• How do financial institutions function in the economy?

  They act as intermediaries facilitating money flow
• What is a commercial bank?

  A financial institution offering various services
• What services do commercial banks provide?

  Deposits, loans, and transaction facilitation
• What is the role of central banks?

  Regulatory and monetary authority of a country
• What is one function of central banks?

  Overseeing the banking system
• What are credit unions?

  Member-owned financial cooperatives
• How do credit unions operate?

  On a not-for-profit basis for members
• What are the main functions of commercial banks?

  1. Accepting deposits
  2. Providing loans
  3. Payment services
  4. Wealth management
  5. Foreign exchange
  6. Credit creation
• What are the main functions of central banks?

  1. Issuing currency
  2. Regulating commercial banks
  3. Monetary policy management
  4. Lender of last resort
  5. Foreign exchange reserves management
  6. Promoting economic stability
• What are the main functions of credit unions?

  1. Encouraging savings
  2. Offering affordable loans
  3. Providing member benefits
  4. Supporting community projects
  5. Tailoring financial services
• Why do credit unions offer lower interest rates on loans?

  They operate on a not-for-profit basis
• How do credit unions differ from commercial banks?

  Credit unions are member-owned and not-for-profit
• What is one benefit of credit unions for their members?

  Profits are reinvested or distributed among members