The document discusses the development of financial systems. It defines a financial system as allocating savings efficiently in an economy to ultimate users, either for investment in real assets or consumption, according to Van Horne. A financial system includes financial institutions, regulatory bodies, financial services, financial instruments, and financial markets that facilitate the flow of funds from savers to seekers of funds. It also functions to mobilize savings, facilitate investment, risk management, and economic growth.

1. DEVELOPMENT OF FINANCIAL SYSTEM
Dr. NGPASC
COIMBATORE | INDIA
Dr. N.G.P. ARTS AND SCIENCE COLLEGE
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2. Dr. NGPASC
COIMBATORE | INDIA
INTRODUCTION
Set of complex
Financial surpluses and financial deficit
Well-knit financial system
Savers and investors
Money, credit and finance Flow of funds
FS

3. Dr. NGPASC
COIMBATORE | INDIA
Flow of funds
Flow of Financial Services
Income and Financial Claims
Suppliers of
Funds (mainly
households)
Seekers of funds
(mainly business
firms and
government)

4. Definition
Dr. NGPASC
COIMBATORE | INDIA
According to Van Horne, "financial
system allocates savings efficiently in
an economy to ultimate users, either
for investment in real assets or for
consumption".

5. Dr. NGPASC
COIMBATORE | INDIA
Financial
Institutions Financial
System
Regulatory
Body
Financial
Services
Financial
Instruments
Financial
Markets

6. Functions of Financial System
Dr. NGPASC
COIMBATORE | INDIA

7. Questions
Dr. NGPASC
COIMBATORE | INDIA
1. Investment
2. Speculation
3. Gambling
4. Investors
5. Liquidity
6. Enterprising Investors
7. Conservative Investor

8. Questions
Dr. NGPASC
COIMBATORE | INDIA
8. Real Assets
9. Financial Assets
10. Factors affecting investment
11. Financial instruments
12. Financial markets
13. Financial services
14. Investment Alternatives

9. Questions
Dr. NGPASC
COIMBATORE | INDIA
1. Why did the investor decide to buy the stock?

10. Objective
Dr. NGPASC
COIMBATORE | INDIA
1. Investments are concerned with risk and return
2. Investments involve long term commitments
3. Investment objective is high risk and high return
4. Money market is for long term investments
5. Mutual funds are market intermediaries
6. Debt securities are mostly ownership based

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