4.4.1

• financial markets are platforms where buyers and sellers engage in the trade of financial assets
• financial institutions are organisations that facilitate financial transactions
• retail banks serve individuals with services like savings accounts, loans and mortgages
• commercial banks provide businesses with services such as business loans and overdrafts
• investment banks specialise in large and complex financial transactions involving companies and investors
• investment banks issue stocks and bonds to help firms raise capital - they also give advice on mergers
• pension funds manage retirement savings for individuals
• insurance companies offer risk management through insurance contracts
• private equity invest in private firms and help generate high returns
• savings accounts are offered by retail banks and provide interest on deposits
• pension funds provide long term saving plans for individuals
• assurance companies encourage regular savings with large payouts
• investment trusts allow savers to invest in diversified portfolio - so they can spread risk
• lending to businesses means to facilitate the transfer of funds from savers to borrowers
• retail banks lend to businesses by providing personal loans, credit cards and mortgages
• commercial banks lend to businesses by offering business loans and overdrafts
• capital markets lend to businesses by issuing bonds and shares so they can raise funds
• money markets lend to businesses by enabling short term borrowing and lending