The Six Core Functions Performed by the Financial System

Across time and space, the primary function of a financial system is to facilitate the distribution and deployment of economic resources in an uncertain environment. Reviewing financial systems through a functional perspective is significant in the arrangement and development of financial markets and products, banking and equity products and the insurance sector.  Brodie and Merton (1995) determined the most aggregated level of the single primary function of resource allocation to further distinguish the six basic functions performed by the financial system. These are the following:
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