Financial institutions

Financial institutions, otherwise known as banking institutions, are s that provide services as intermediaries of s. Broadly speaking, there are three major types of financial institutions:


 * 1) Depository institutions – -taking institutions that accept and manage deposits and make s, including s,, s, , and  companies;
 * 2) Contractual institutions –  and s
 * 3) Investment institutions –, , s.

Financial institutions can be distinguished broadly into two categories according to ownership structure:


 * Commercial Banks

Some experts see a trend toward homogenisation of financial institutions, meaning a tendency to invest in similar areas and have similar business strategies. A consequence of this might be fewer banks serving specific target groups, and small-scale producers may be under-served.

Standard settlement instructions
Standard Settlement Instructions (SSIs) are the agreements between two financial institutions which fix the receiving agents of each in ordinary trades of some type. These agreements allow to make faster trades since the time used to settle the receiving agents is conserved. Limiting the trader to an SSI also lowers the likelihood of a. SSIs are used by financial institutions to facilitate fast and accurate cross-border payments.

Regulation
Financial institutions in most countries operate in a heavily regulated environment because they are critical parts of countries' economies, due to economies' dependence on them to grow the money supply via. Regulatory structures differ in each country, but typically involve prudential regulation as well as consumer protection and market stability. Some countries have one consolidated agency that regulates all financial institutions while others have separate agencies for different types of institutions such as banks, insurance companies and brokers.

Countries that have separate agencies include the, where the key governing bodies are the (FFIEC),  - National Banks,  (FDIC) State "non-member" banks,  (NCUA) - Credit Unions,  (Fed) - "member" Banks,  - National Savings & Loan Association, State governments each often regulate and charter financial institutions.

Countries that have one consolidated financial regulator include: Norway with the, Germany with and Russia with.

Merits
Merits of raising funds through financial institutions are as follows:
 * 1) Financial institutions provide long term finance, which are not provided by ;
 * 2) The funds are made available even during periods of depression, when other sources of finance are not available;
 * 3) Obtaining loan from financial institutions increases the goodwill of the borrowing in the capital market . Consequently, such a company can raise funds easily from other sources as well;
 * 4) Besides providing funds, many of these institutions provide financial, managerial and technical advice and consultancy to business firms;
 * 5) As repayment of loan can be made in easy installments, it does not prove to be much of burden on the business.