Business, Legal & Accounting Glossary
The financial system of any country is an arrangement of financial organization and financial laws in such a way that leads to the development of the economy. Like any other system in a country, the financial system takes care of the financial health of any country. Any decision regarding finances is passed through this system. Proper functioning of the financial system is an indicator of the financial health of any economy. Major components of any financial system are the central bank, financial ministries and few authorized financial agents.
The financial system of any country is regulated by individual regulators from various sectors like banking, insurance, financial markets and service sectors along with government playing a major role of a regulator. Ministry of Finance of any country along with government forms a major component of the financial system of any economy. They are responsible for looking after the financial matters of a country.
A global financial system or GFS has the same structure as any other financial system, the only difference lies that each component is internationally recognized. Major components of GFS are International Monetary Fund and Bank for International Settlements, apart from these, national agencies and government departments of major countries including central banks and finance ministries along with private institutions operate on a global basis.
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This glossary post was last updated: 27th March, 2020 | 1,402 Views.