The role of the Financial sector
- Created by: Chloe_1709
- Created on: 07-12-18 13:39
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Finance about safe place for saving and lending. - risks are involved in lending
risk of lending is spread between different depositors + borrowers
The difference between high interest (borrowing) + low interest (saving) pays for bank services and the cost of carrying the risks involved
Credit creation is important in helping the economy grow
The process which banks expand their lending by a multiple of deposits received
Financial intermediaries: organisations channeling funds generated by savers towards borrowers
Money is a medium of exchange facilitating buying and selling + specialisation + eco…
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