Finance banking insurance
Banks, insurance companies and the financial institutes are aggregated under institutional investors. The institutional investor, unlike a single investor, is a large group of investors. These sophisticated investors generally make large investments. These investors follow different sets of rules in investments and returns. The institutional investors also carry out sub sections of finance sector. These are namely banking, insurance and financing. Various individual investors invest their money in these institutions. The institutes in turn invest the total amount in bigger investments such as stock markets.
Financing
The financing sector specifically deals with the management of funds belonging to or allotted to individuals or businesses. The financing sector comprises of many sub-institutes. There are financial markets that are inclusive of the bond market, stock market, Forex market, OTC market, real estate market and spot market. A bond market is the finance market where the participants or the investors sell and buy debts. In a stock market trading of stocks of particular companies take place. Bond market is the derivative of the stock market. Forex Market is foreign exchange market. In this the currency are internally exchanged or traded. ÃÂOTC market, means the over the counter finance. In this section the various financial trading instruments like bonds, stocks and derivatives are exchanged directly between two investors. The market where real estate properties such as houses, lands and buildings are bought and sold is known as real estate market's.
Other than these markets, there are various other finances available in finance sector. These are corporate finances, personnel finances and public finances. The finances that are offered for corporate and business purpose are known as corporate finances. Various managements such as employment contracts, retirement and other financial planning done for an individual are aggregated under personnel finance. Tax is the subsection of public finance.
In finance sector various institutes or individuals participate. These can be banks and insurance companies.
Banking
Banking is the collection of various activities taking part in a bank. A bank mainly provides financial services to its investors. The banks also lend money to under corporate and personnel loans. The banks make their profit from the interest rates applied on the lent amount. The difference between the interest on lent amount and deposited amount is the profit for the bank. There are number of services that are provided by the banks. The basic functions are to deposit and lend money with specific rate of interest. Other functions such as cashing out cheques, electronic transfers of cash, issuing debit cards, ATM cards and credit cards and providing safe deposit boxes are the additional services provided by banks.
Insurance
Insurance companies are one of the prime investors in the finance sector. Insurance is the kind of investments where financial risk management is done. Various individual investors invest their money in some or other form of insurance. This invested money is transferred to other entities as the cure of the loss. This way the insurance company also plays a major roll in the finance sector. It is beneficial for its investors as well as the employees in the company.
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