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Financial law is the body of legal rules regulating social relations, which arise in the course of formation, distribution and usage of money funds (financial resources) of the state and local authorities, business entities and individuals which are required for accomplishing of their tasks. This section also includes banking activities, laws specifying policy and procedures of foreign currency turnover, relations between banking institutions and their clients.
In financial economics, a financial institution an institution that provides financial services for its clients or members. Probably the most important financial service provided by financial institutions is acting as financial intermediaries.
First thing that people think of when hearing words financial institutions are banks. But banks are not even near to be the only financial institutions. Financial institutions are the firms that provide financial services and advices to its clients. The financial institutions are generally regulated by the financial laws of government authority. The variety of financial institutions reveals the complex requirements of both borrowers and lenders. Banks, building societies, investment trusts and pension funds are just a few of the organisations whose job it is to channel funds to those that require them.
These institutions operate in the short-term (money) market and the long-term (capital) market.
In the money market, the main activity centres around funds, which are lent for periods from as short as overnight up to about one year. The capital market focuses on money borrowed and lent for periods of five years or more.
Various types of Financial Institutions are as follows: Commercial banks, Credit unions, Stock brokerage firms, Asset management firms, Insurance companies, Finance companies, Building Societies, Retailers, Investment funds and mutual funds.
The services provided by the various types of financial institutions may vary from one institution to another. For example, the services offered by the commercial banks are – insurance services, mortgages, loans and credit cards. The services provided by the brokerage firms, on the other hand, are different and they are – insurance, securities, mortgages, loans, credit cards, money market and check writing. The insurance companies offer – insurance services, securities, buying or selling service of the real estates, mortgages, loans, credit cards and check writing.
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