The document discusses various aspects of the financial system including: 1) Savings from consumers are channeled into businesses through financial markets, allowing companies to raise funds for investments. This process links savings and investment in the economy. 2) Companies use both debt and equity financing to raise funds for daily operations and large projects. Debt financing involves borrowing through bonds while equity financing involves selling stock. 3) Financial markets include capital markets for stocks and long-term debt, as well as money markets for short-term debt. Various entities like banks and brokerages facilitate the flow of funds through these markets.

1. The Financial System, Corporate Governance, and Interest

12. Transfer of Funds From Investors to Businesses Figure 5.3 12

42. Yield Curves Figure 5.10 42